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Europaudvalget 2015
KOM (2015) 0611
Offentligt

EUROPEAN

COMMISSION

Brussels, 10.11.2015

SWD(2015) 215 final

COMMISSION STAFF WORKING DOCUMENT

KOSOVO*

2015 REPORT

Accompanying the document

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN

PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL

COMMITTEE AND THE COMMITTEE OF THE REGIONS

EU Enlargement Strategy

{COM(2015) 611 final}

{SWD(2015) 210 final}

{SWD(2015) 211 final}

{SWD(2015) 212 final}

{SWD(2015) 213 final}

{SWD(2015) 214 final}

{SWD(2015) 216 final}

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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

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Table of Contents

INTRODUCTION....................................................................................................... 4

1.1. Context ............................................................................................................. 4

1.2. Summary of the report....................................................................................... 4

POLITICAL CRITERIA............................................................................................. 6

2.1.

2.2.

2.3.

2.4.

2.5.

Democracy ........................................................................................................ 6

Public administration reform........................................................................... 10

Rule of Law ..................................................................................................... 12

Human rights and the protection of minorities................................................ 20

Regional issues and international obligations ................................................. 27

NORMALISATION OF RELATIONS BETWEEN KOSOVO AND SERBIA...... 29

ECONOMIC CRITERIA .......................................................................................... 30

4.1. The existence of a functioning market economy............................................. 30

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

the Union ......................................................................................................... 35

EUROPEAN STANDARDS..................................................................................... 37

5.1. Internal market ................................................................................................ 37

5.1.1. Free movement of goods ................................................................... 37

5.1.2. Movement of persons, services and right of establishment............... 38

5.1.3. Free movement of capital .................................................................. 39

5.1.4. Customs and taxation ........................................................................ 40

5.1.5. Competition ....................................................................................... 41

5.1.6. Public procurement............................................................................ 41

5.1.7. Intellectual property law.................................................................... 43

5.1.8. Employment and social policies, public health policy ...................... 44

5.1.9. Education and research...................................................................... 45

5.1.10. World Trade Organisation (WTO) issues ......................................... 46

5.2. Sector policies ................................................................................................. 47

5.2.1. Industry and SMEs ............................................................................ 47

5.2.2. Agriculture and fisheries ................................................................... 47

5.2.3. Environment and climate change ...................................................... 48

5.2.4. Transport policy ................................................................................ 49

5.2.5. Energy ............................................................................................... 50

5.2.6. Information society and media .......................................................... 51

5.2.7. Financial control................................................................................ 52

5.2.8. Statistics ................................................................................................ 54

5.3. Justice, freedom and security .......................................................................... 56

5.3.1. Visa policy, border controls, asylum and migration ............................. 56

5.3.2. Money laundering.............................................................................. 58

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5.3.3.

5.3.4.

5.3.5.

5.3.6.

Drugs ................................................................................................. 58

Police ................................................................................................. 58

Fighting organised crime and terrorism ............................................ 59

Judicial cooperation in civil and criminal matters............................. 60

Annex I – Relations between the EU and Kosovo ............................................................ 61

Annex II – Statistical Annex ............................................................................................. 63

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1.1.

INTRODUCTION

Context

On 27 October 2015, the EU signed a Stabilisation and Association Agreement (SAA) with

Kosovo. This is a milestone on Kosovo's path towards a European future. The SAA

constitutes the first contractual relationship between the EU and Kosovo. It completes the

map of SAAs with all Western Balkan countries. The SAA provides a comprehensive

framework for closer political dialogue and economic relations between Kosovo and the EU,

including opening EU markets to Kosovo products.

Kosovo has demonstrated its commitment to the normalisation of relations with Serbia by

reaching a number of key agreements in August. Important decisions have also been taken to

pave the way towards the establishment of the Specialist Chambers. The new government has

also underlined its commitment to its goal of meeting all requirements for visa liberalisation.

1.2.

Summary of the report

As concerns the

political criteria,

the six-month political stalemate following elections in

June 2014 delayed key reforms. It ended in December, when the Democratic Party of Kosovo

(PDK) formed a coalition with the Democratic League of Kosovo (LDK) and minority

parties. In August, the Kosovo Assembly voted in favour of constitutional amendments to

establish the Specialist Chambers and a Specialist Prosecution Office, which are to prosecute

cases of grave trans-boundary and international crimes committed during and in the aftermath

of the conflict in Kosovo. The government also reached key agreements with Belgrade in

August. Both decisions required strong political commitment from the government.

There has been increased polarisation between government and opposition. Members of the

opposition have been involved in incidents of violence against the government, criticising it

for its recent decision on the Specialist Chambers, the dialogue agreement with Belgrade, and

the border demarcation agreement with Montenegro.

Many independent institutions and regulatory authorities are currently not operational or are

negatively affected by delayed appointments of board members. Both the government and the

Assembly need to urgently select board members for these institutions and determine

mechanisms for their accountability. Appointments need to be made on the basis of

professional qualifications and merit, not political patronage. The recent election of the

Ombudsperson was a positive development in this regard.

The government has increased its focus on reform of the public administration, which has

reached some level of preparation. Good progress was made in advancing the legal and

strategic framework. The continued politicisation of the public administration, however, is a

major concern. Accountability needs to improve across the administration through proper

oversight. Any overlap of responsibilities of government agencies should be avoided.

Parliamentary oversight of budget implementation should become more reliable and

transparent. Sound financial management across public institutions should be ensured.

Kosovo's judicial system is at an early stage of preparation. A package of amendments to four

core laws was adopted, taking a step towards the modernisation of the justice system.

This report covers the period from October 2014 to September 2015. It is based on input from a variety of

sources, including contributions from the government of Kosovo, the EU Member States, European Parliament

reports and information from various international and non-governmental organisations. As a rule, legislation or

measures which are under preparation or awaiting parliamentary approval have not been taken into account.

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However, the judiciary remains prone to political interference. Further efforts are required to

ensure independence in law and in practice, to prevent and fight corruption within the

judiciary, to recruit and train more qualified staff and to allocate adequate resources.

Kosovo is at an early stage of preparations in the fight against corruption. A comprehensive

and strategic approach is necessary to ensure real results in fighting the endemic corruption in

Kosovo. A track record of successful prosecution and convictions remains to be established.

The rare investigations into high-level corruption have so far not resulted in final convictions.

Kosovo is at an early stage of preparations in the fight against organised crime. Some

progress has been made in inter-institutional cooperation and information exchange among

law enforcement agencies on investigations. However, the number of investigations and final

convictions remain low. Asset confiscation is rarely applied. The focus on strategies and

action plans should not obscure the need for real results in fighting endemic organised crime

in Kosovo. Kosovo has stepped up its efforts to fight terrorism, but continues to face

challenges related to radicalisation.

The adoption of the human rights law package strengthened the institutional set-up and

clarifies the roles of various institutions. Increased political attention is needed, however, to

ensure proper implementation and addressing the lack of resources. In the area of freedom of

expression, Kosovo has some level of preparation. The legislative and institutional framework

remains fragmented and partly ineffective. The public broadcaster is vulnerable to political

pressure and lacks sustainable funding. Violence against women and women’s limited access

to property ownership hamper the full exercise of their rights. The protection of persons with

disabilities and persons belonging to minorities, in particular the Roma, Ashkali and Egyptian

communities, needs to be significantly strengthened.

Regarding the

normalisation of relations with Serbia,

Kosovo remained committed to the

implementation of the April 2013 'First agreement of principles governing the normalisation

of relations' and other agreements reached in the EU-facilitated dialogue. Key agreements

were finalised in August on energy, telecoms, establishment of the Association/Community of

Serb majority municipalities as well as the bridge in Mitrovicë/Mitrovica. The dialogue

achieved further concrete results in the fields of justice, civil protection integration, vehicle

insurance, customs collection and IBM. There were also constructive discussions to improve

cooperation in tackling migratory flows from Kosovo. The steps taken gave fresh momentum

to the normalisation of relations and should have a positive and concrete impact on the

everyday life of citizens in both Serbia and Kosovo.

As regards the

economic criteria,

Kosovo is at an early stage in developing a functioning

market economy. The persistent trade deficit reflects a weak production base and lack of

international competitiveness. Reliance on remittances and widespread informal economy

decrease employment incentives contributing to already low labour market participation and

high unemployment, which stands at 35.3%, rising to 61% among youth. Inefficient public

administration and an ad hoc approach to fiscal policy constitute significant fiscal risks.

Kosovo should strengthen the medium-term fiscal framework, improve the transparency of

public finance and shift budget expenditure towards growth. Kosovo should also speed up

privatisation and restructuring of public enterprises and improve bankruptcy and insolvency

procedures, as well as reduce reliance on customs duties by broadening domestic tax base and

modernising revenue collection.

Kosovo is at an early stage in achieving the capacity to cope with competitive pressures and

market forces within the Union. Major reforms are still needed to secure a stable energy

supply and reducing distribution losses, close the skills gap in the labour market, and channel

foreign direct investment and remittances into productive sectors.

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Kosovo is at an early stage of alignment with

European standards,

including in the areas of

public procurement, statistics and financial control. Legislative alignment in some areas is

high but implementation is weak. Some progress was made in the area of public procurement,

especially as regards the enforcement of a centralised public procurement system, but

concerns about corruption persist. As regards financial control, some progress was made,

especially in external audit. However, significant efforts are needed to implement public

internal financial control throughout the administration and in state-owned enterprises.

2.1.

POLITICAL CRITERIA

Democracy

Kosovo continued to consolidate the functioning of its democratic institutions. Following the

elections of June 2014, a new Assembly was formed and a new government took office in

December. The European Union's Special Representative in Kosovo and the European Union

Rule of Law Mission (EULEX) continue to implement their mandates. EULEX' current

mandate runs out in June 2016. In comparison to other years, the situation in the north of

Kosovo, inhabited predominantly by Kosovo Serbs, has improved during 2015. Kosovo has

made progress on integrating police and justice structures in the north and in August 2015

agreed, within the framework of the EU-facilitated dialogue with Serbia, to establish an

Association/Community of Serb majority municipalities. The Assembly successfully adopted

the constitutional amendments and legislation required for the establishment of Specialist

Chambers and a Specialist Prosecution Office to investigate allegations of international

crimes committed during and after the 1999 conflict.

Elections

The Kosovo Assembly has yet to undertake overdue electoral reforms. Kosovo's membership

of the Venice Commission can help in this regard. The Assembly also needs to initiate an

independent audit of political party financing and party electoral campaigning, as provided for

in the law on financing of political parties. In January 2015, well-managed municipal

elections were held, without incident, in Gračanica/Graçanicë, a Serb-majority municipality in

central Kosovo.

Parliament

The delay in establishing a new Assembly following the 2014 elections slowed down

Kosovo's reform process. Violent obstructions of recent plenary sessions by members of the

opposition have adversely affected the functioning of the Assembly. Such actions go against

European values. The Assembly needs to become more efficient and to comply with its own

rules of procedure. It should urgently appoint competent members to regulatory and

supervisory bodies to ensure the proper functioning of the state administration, on the basis of

merit based, transparent and non-political selection processes.

Six months after the parliamentary elections of June 2014, a new Assembly was formed on 8

December. The Democratic Party of Kosovo PDK (35 seats) and the Democratic League of

Kosovo LDK (33 seats) are in a governing coalition with the Serb Citizen’s Initiative 'Srpska'

(11 seats) and the non-Serb minority group '6+' (6 seats). With 85 out of 120 seats, the ruling

coalition has a comfortable majority. The ‘Vetëvendosje’ self-determination movement and

political party (16 seats) is the core of a small, but vocal, opposition.

Parliamentary work was effectively suspended from June until December 2014. However,

following the agreement on the new government, the Speaker was appointed and the

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Assembly began its work. It confirmed the new government and passed the 2015 budget in

December. It adopted its annual work plan in February. Several important laws, including on

the judiciary and human rights, were enacted, all of which was adopted under fast-track

procedure. This limited the possibility for parliamentary debate, which is a matter of concern.

Many of the Assembly's deliberations were marked by a polarised atmosphere between the

ruling coalition and the opposition, in particular on politically sensitive issues such as the

Specialist Chambers and dialogue with Serbia. Recent disruptions of plenary sessions by the

opposition, including by violent means, have adversely affected the functioning of the

Assembly and have undermined confidence in the willingness of the opposition to partake in

democratic debate. The Assembly is a key democratic institution and all parliamentary

members must allow it to fulfil its duties.

Parliamentary debate was further affected by the lack of regular plenary sessions and frequent

exceeding of time limits set under the rules of procedure. This was to the detriment of the

quality of parliamentary review. There were also violations of the rules of procedure by the

government arbitrarily withdrawing draft laws submitted to the Assembly. The regulatory

framework for the Assembly should be improved. The new Assembly should strengthen its

oversight of the executive and the legislative process and implement standards for

consultations with civil society. Parliamentary checks and balances over budgetary control

needs to improve. The Assembly should ensure follow-up on reports by the Office of the

Auditor General and the Ombudsperson. A mechanism should be put in place to ensure that

recommendations by the public finance oversight committee are implemented.

The Assembly should supervise independent institutions, regulatory authorities and agencies

more closely, based on a clear mandate and with suitable reporting and accountability

mechanisms. It should urgently address delays in the selection of board members for these

institutions and authorities, and determine mechanisms for their accountability. Appointments

need to be made on the basis of professional qualifications and merit, not political patronage.

The EU integration committee should be further strengthened to reflect its key role in

Kosovo’s efforts to advance on its European reform agenda. Better screening of draft

legislation is needed to ensure alignment with the

acquis.

The Assembly administration needs

to strengthen its technical capacity to support effective policy-making and improve scrutiny of

draft legislation.

Governance

The new government continued to implement EU-related reform priorities and delivered on

two major international commitments in August. The executive should ensure that legislation

and policies are implemented in practice. Good communication with the Assembly, including

regular replies to parliamentary questions and strong inter-ministerial coordination, are crucial

in this regard. While legislation on the Ombudsperson was improved, the government

undermined its effective functioning through continued failure to provide suitable premises.

The new

government

of Prime Minister Isa Mustafa (LDK) took office in December. The

formation of the coalition followed a prolonged stand-off between the PDK and an alliance of

parties led by the LDK. The break-up of this alliance enabled the PDK and LDK to reach a

power-sharing agreement and form a grand coalition supported by minority parties. The

government has 23 members, including the Prime Minister and three deputy prime ministers.

There are only two women in the government. Five ministerial posts are held by minority

representatives, three of which represent the Serb, one the Turkish and one the Bosnian

communities.

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The new government continued to implement EU-related reform priorities and remained

committed to the EU-facilitated dialogue with Serbia. The government programme focuses on

economic development, the rule of law, EU-related reform, education, science and culture,

and healthcare. With its agreements on the establishment of the Specialist Chambers and the

Association/Community of Serb majority municipalities, the government delivered on two

key international commitments in August 2015.

The government has faced significant challenges, including a spike in irregular migration by a

considerable number of Kosovo citizens early in 2015, a number of violent protests and

strikes, as well as violent attacks by the opposition in September and October 2015. The

dismissal of the Minister for Communities and Return as a result of statements made in

Gjakova/Djakovica led to a three-month boycott of the institutions by the Serb 'Srpska'

coalition partner. The appointment of a new Kosovo Serb Minister allowed for the return of

the 'Srpska' list to the government and the Assembly.

Limited cooperation between PDK- and LDK-led ministries has in some cases hindered

efficiency in making progress in key areas of governance. The government needs to meet

deadlines set out in its various strategies and work plans, with better coordination and

improved communication among coalition partners.

The government continued to implement European integration priorities. To support this

process and in anticipation of the Stabilisation and Association Agreement, the Kosovo

institutions have been involved in drafting the first National Programme for Adoption of the

EU Acquis. Kosovo has also been working on a monitoring and reporting system. The

National Council on European Integration has continued to meet and discuss the main

objectives and policy obligations of further integration with the EU. The executive

commissions in charge of the coordination and implementation of SAP Dialogue conclusions

continued to meet.

Efforts to further improve the capacity of

local government

have continued. The Ministry of

Public Administration is currently streamlining the number of job titles from around 8000 to

800. While these initiatives could bring about efficiency gains, their purpose and

implementation should be communicated better. There has been improvement in municipal

compliance with the law on local self-government. Municipal efforts need to continue to

increase transparency in decision-making and strengthen municipal assemblies' oversight.

The Serb-majority municipalities in the south submitted their budgets, which were approved

in line with those of other municipalities. They also took part in the agricultural census, which

the northern municipalities boycotted. Some southern Serb-majority municipalities face

budgetary difficulties, partly due to inaccurate population figures and political deadlock. In

April 2015, municipalities in the north adopted their budgets in line with Kosovo legislation,

which also included the numbers of employees in the health and education sectors.

On 3 August, the Kosovo Assembly adopted

constitutional amendments

allowing for the

establishment of the Specialist Chambers and the Specialist Prosecution Office. The

Constitution needs to be changed to ensure that the majority of Kosovo Judicial Council

members are elected by their peers, in line with Venice Commission recommendations.

Following Kosovo's membership of the Venice Commission (June 2014), two judges of the

Constitutional Court were appointed as Kosovo’s representatives. The Constitutional Court

operates with a quorum of seven judges; however, two appointments are currently pending.

The Assembly elected a new

Ombudsperson

in July 2015. The Assembly also adopted a

new Law on the Ombudsperson in May 2015, marking a significant step towards clarifying

the legal framework and strengthening the independence and impartiality of the institution. In

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practice, however, the government has undermined the capacity of the institution to carry out

its duties due to the failure to provide it with suitable premises. In 2014, the

Ombudsperson received 2 224 cases, 8.6 % more than in 2013. The Kosovo authorities

at central and local level have not committed themselves to consistently following up

on the Ombudsperson's recommendations. The Assembly's committee on human rights

and the Office for Good Governance under the Prime Minister's Office should re-

confirm and implement their commitment to do so.

Civil society

Some progress was made in improving cooperation between the government and civil society.

However, input from civil society needs to be systematically sought and followed up. The

government’s strategy for cooperation with civil society needs to be fully implemented and

monitored effectively. Additional measures should be taken to ensure that civil society

organisations are properly included in public consultations. Public funding for civil society

organisations has to be provided in a transparent way using clearly defined criteria.

An empowered civil society is a crucial component of any democratic system and should be

recognised and treated as such by institutions in Kosovo. The implementation of the

government's strategy for cooperation with civil society is monitored by the Council on the

Implementation of the Government Strategy for Cooperation with Civil Society. To date, the

Council has only managed to draw up its own work plan and set up four working groups. The

lack of appropriate participation by relevant ministries, insufficient resources and capacity

and an overreliance on donor-funding illustrate the absence of political will to genuinely

engage with civil society. More work is required to ensure consistent implementation of the

existing legal framework for cooperation with civil society. Consultation needs to be timely

and the selection of civil society representatives needs to be transparent.

The manner in which public funding is provided to civil society is non-transparent and

unregulated. The government should set standards and criteria governing public funding of

civil society organisations so as to instil transparency, accountability and credibility in the

process. Tax relief for private donations has been increased from 5 to 10 %, but the legal

framework for tax deductions remains ambiguous and is not harmonised with provisions in

the law on freedom of association.

Recent amendments to money laundering and anti-terrorism legislation have led to the

suspension of 14 NGOs, allowing for arbitrary decisions on suspensions.

While meetings of the Assembly presidency have been made accessible to civil society, the

Assembly’s declaration on partnership between it and civil society has yet to produce any

concrete results.

Civilian oversight of the security forces

There has been limited progress in the work of the parliamentary committee on internal

affairs, security and supervision of the Kosovo security forces. The administrative staff of the

committee ensured continuity in the oversight of the security sector during consecutive

assembly mandates, but the committee has yet to exercise proper parliamentary control and

oversight of expenditure. Close ties between individual parliamentarians and former Kosovo

Liberation Army members and Kosovo Protection Corps have hindered independent

assessments.

Amendments to the law on classified information and security clearance have improved the

vetting process. However, vetting is still done by the Intelligence Agency instead of a separate

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dedicated body. The Kosovo Security Council, which should have an advisory role on all

security matters, does not hold the regular meetings provided for by its mandate.

2.2.

Public administration reform

Kosovo has

some level of preparation

in the reform of its public administration.

Good

progress

was made on developing a comprehensive strategic framework for public

administration reform (PAR) and on improving legislation. For the first time, public

administration reform has received high-level political support and commitment. Given

Kosovo's ambitious reform agenda, continued strong political commitment is essential to

ensure implementation of reforms. In the coming year Kosovo should in particular:

→

effectively monitor implementation of the PAR strategic framework under the umbrella of

the wider development strategy, ensuring a clear link between PAR and economic

development;

→

improve accountability through a thorough review of all agencies and improve access to

administrative justice by addressing the backlog of administrative cases;

→

adopt a comprehensive public financial management reform programme.

Public service and human resource management

The law on the civil service governs the employment conditions of civil servants at the central

government and municipal levels.

Merit-based recruitment and promotion

are enshrined in

law in line with the principles of public administration, but not systematically implemented.

This is particularly so for senior civil servant positions and appointments to boards of public

entities, where political influence over appointments is a matter of concern. Non-majority

communities are still not adequately represented in public institutions. A major hindrance in

this regard is the continued non-recognition of diplomas issued by the University in

Mitrovicë/Mitrovica, which is the university attended by many students from non-majority

communities.

The civil service law also regulates uniform criteria for

dismissals.

It provides for disciplinary

measures, including appeal possibilities. Few recommendations of the independent oversight

board are implemented – rulings are not followed up. Administrative judges are

overburdened, often leading to delays in decisions. Many Ombudsperson recommendations

are not implemented, often without explanation.

The Ministry of Public Administration is responsible for central coordination of

human

resources management.

Resources within the ministry are very limited, preventing it from

effectively promoting the uniform application of legislation and principles across the public

administration. Professional human resources management is lacking due to politicisation and

limited capacity. The human resource management information system is not up-to-date. The

government should ensure that the system works properly.

The

remuneration system

of public servants does not ensure equal pay for equal work, even

though a standardised job classification has been in place since 2010. In practice, different

salary coefficients are applied to similar positions. Fairer remuneration is being held back by

the delay in job classification reform. However, the recently approved job catalogue should

help. A positive step was the temporary suspension of top-ups on salaries in September 2015,

to ensure a more regulated and merit-based approach.

Professional development

for public servants is insufficient. Systematic training is hampered

by lack of resources and suitable facilities of the Kosovo Institute for Public Administration.

Performance appraisals are provided for by law but in practice are treated as a formality.

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Kosovo has adopted measures and mechanisms to prevent corruption and promote

integrity

in the public service.

The approval of the Code of Ethics for civil servants in March 2015 is a

positive development and now needs to show practical impact. Public trust in institutions is

often undermined by corruption.

Policy development and coordination

The legal basis and institutional structures, including for European integration, are largely in

place to ensure a consistent

policy-making system,

but in practice policy planning is

fragmented and lacks prioritisation at government level. Sector strategies have rarely been

financially sustainable. As of June 2015, all strategies and policies have to contain a fiscal

impact analysis.

Some aspects of

inclusive and evidence-based policy and legislative development

are in

place. There have been major improvements in policy development, although policy-making

and legal drafting capacities, including capacity for alignment with the

acquis,

are still

insufficient. Inter-ministerial and public consultations are regulated, but timelines have often

been too short to allow for effective civil society input. The government should implement

minimum standards for effective public consultation. Regulatory impact assessments are not

used consistently, other than in a number of pilot areas.

Public scrutiny of government work

is in theory possible, since the government reports

annually on implementation of the key government strategic documents. The focus is however

on achievement of outputs rather than on the impact of government policies. No reporting is

done on the implementation of sector strategies. Parliamentary scrutiny of government work

is undermined by frequent changes in the government's legislative plan.

Accountability of the administration

The overall organisation of the state administration is not conducive to ensuring the

lines of

accountability.

The weak legal framework has resulted in over 70 government agencies with

overlapping responsibilities and a large number of non-constitutional institutions reporting

directly to the Assembly. The Assembly often lacks the powers and capacity to effectively

supervise their activities. Lines of accountability within institutions are weak and there is no

clear delegation of powers to middle management. Managerial accountability is not yet

ingrained in the administrative culture. (See

Financial control)

Internal and external mechanisms have been set up to protect the

citizens’ right to good

administration.

However, scrutiny by oversight institutions such as the Auditor General and

the Ombudsperson is severely limited by the state administration paying little heed to their

recommendations. The

right to access public information

is regulated in the law on access

to public documents. Over the past two years, the number of refused or unanswered requests

was low (only 5 % of the nearly 2 000 requests made each year).

No progress has been made on the

right to administrative justice,

as the law on general

administrative procedures is not yet adopted. The increasing backlog in resolving

administrative disputes is damaging public confidence in the court system. The

right to seek

compensation

is not yet effectively ensured due to fragmented legislation and lack of a

specific law on public liability.

Public financial management

Kosovo has so far focused on improving its public finances by addressing specific public

finance areas separately, without explicitly linking them and sequencing reforms under a more

comprehensive

public financial management reform programme.

However, following a

public expenditure and financial accountability assessment and other relevant assessments,

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Kosovo is now preparing a comprehensive strategy and action plan, to be adopted in early

2016. This should take into account the new public internal financial control strategy from

April 2015 and the new public procurement strategy, which is yet to be adopted.

The annual budgeting process is based on the ‘line-item’ approach. Public debt is still low and

sustainable, although domestic and international borrowing has been increasing.

Budget

transparency

is insufficient. In particular, budget information needs to be more reliable and

comprehensive to strengthen accountability. The presentation of key budgetary information in

an accessible way would generate trust with the general public and contribute to an improved

citizen-state relationship.

Service delivery to citizens and businesses

The government is committed to a

user-oriented administration.

However, the development

of a coherent policy is often undermined by a lack of coordination and common vision

between the responsible ministries. Development of e-services is slow due to lack of an

appropriate interoperability framework. Legislation on equal access to services exists, but

implementation is a challenge, particularly for citizens with disabilities.

Simplification of

administrative procedures

is yet to be ensured, pending the adoption of the law on general

administrative procedures.

Strategic framework for public administration reform

A new

public administration reform strategy

framework has been set up under the

umbrella of the 2015-2020 development strategy. It includes the 2015-2020 public

administration reform modernisation strategy and accompanying 2015-2017 action plan,

adopted in September. The strategy sets targets and measurable indicators, including fiscal

impact analysis, which is a clear step forward. The Ministry of Public Administration will

need sufficient human resources to ensure coordination and monitoring of its implementation.

The new framework also includes a strategy adopted in June 2015 on an integrated planning

system, coordinated by the Prime Minister's Office, and the new public financial management

reform strategy, which is under preparation.

Political support

and commitment has visibly increased in recent months, and the Ministerial

Council chaired by the Prime Minister is providing the necessary steer and coordination. The

monitoring and reporting framework is in place, but remains to be implemented. Sufficient

resources need to be allocated especially in the Ministry of Public Administration.

Financial

sustainability

needs to be ensured in the 2016 budget and in the medium-term expenditure

framework.

2.3.

Rule of law

Functioning of the judiciary

Kosovo's judicial system is

at an early stage

of developing a well-functioning justice system.

Some progress

has been achieved over the past year by adopting the package of four laws

(Law on Kosovo Judicial Council, Law Kosovo Prosecutorial Council, Law on Courts, Law

on State Prosecutor).

However, the administration of justice is slow and there is insufficient accountability of

judicial officials. Judicial structures are still prone to political interference. There are concerns

that disputed appointments and unclear mandates have undermined the activities of key

institutions such as the Kosovo Judicial Council, Kosovo Prosecution Offices, and the Office

of the Chief State Prosecutor

Rule of law institutions suffer from a consistent lack of funding.

In addressing the shortcomings outlined below, Kosovo should in the coming year:

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→

implement the justice package, including timely adoption of any secondary legislation;

→

step up financial and human resources to the judicial sector to ensure the proper

functioning of the judicial system;

→

ensure lawful and timely appointments in critical institutions, such as the Kosovo Judicial

Council and the Kosovo Prosecutorial Council;

→

further reduce the backlog of cases.

Strategic documents

The 2014-2019

strategic plan

for Kosovo’s judiciary, the 2014-2019 communication strategy

and the national strategy for reducing the backlog of cases are being implemented, addressing

substantial shortcomings in the judiciary.

Management bodies

Under the Constitution, the

Kosovo Judicial Council (KJC) and the Kosovo Prosecutorial

Council (KPC)

are responsible for ensuring the independence and impartiality of the

judiciary. Both councils have a mixed composition. In the KJC, five out of 13 members are

elected by the members of Kosovo’s judiciary and eight members are appointed by the

Kosovo Assembly. This results in strong political interference and jeopardises the

independence of the judiciary. This has not changed with the new law as it would require

amending the Constitution. At the KPC, five out of nine members were elected by

prosecutors, whilst the other three were non-prosecutors elected by the Council itself, and one

member was

ex officio

– the Minister of Justice. The new law sets out a new composition,

raising the number of members from nine to 13, ten of whom are to be elected by their peers

and three by the Assembly. Also under the new law, from 1 January 2016, the KPC will be

able to control its own budgetary resources. All meetings of the KJC and the KPC are open to

the media and the public. Both councils draw up and approve annual reports on their work, as

provided for by law, but their internal reporting mechanisms still need to be improved.

Applications have been received following vacancy notices published by the KJC and the

KPC in March 2015 for Kosovo Serb judges and prosecutors, both for courts in the south and

north of Kosovo, in accordance with the political agreement between Belgrade and Pristina.

Some positions were filled in July 2015, a significant step forward in the integration of the

judiciary in the north.

The KJC and the KPC experienced significant delays in approving strategic documents,

regulations and other decisions or acts. There is still not enough capacity to draft regulations

and take decisions in full compliance with the hierarchy of normative acts. There is a lack of

capacity within the KJC and the KPC to monitor the implementation of their decisions.

Independence and impartiality

Court Presidents are responsible for the management and operations of their courts. Both the

Constitution and laws still allow political influence over the judiciary, in particular over the

KJC and related to human resources matters. The activities of KJC and the KPC were

hampered by the post-electoral political crisis, notably the political pressure on the long and

drawn out process of nominating the Chief State Prosecutor. Amendments to the new laws,

adopted in May 2015 are in line with most EU recommendations. Additional amendments

including transitional clauses are needed.

There is no functional electronic case management system.

Allocation of cases

to judges is

regulated and carried out by the drawing of lots. Urgent cases are allocated to the presiding

judge. Sensitive cases are being allocated, but not always dealt with. The number of judges

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dealing with serious crimes remains low. The KJC, as the competent body to act in case of

threats to judges, should raise awareness among judges of existing protection mechanisms to

protect them.

Accountability

code of ethics

for judges, prosecutors and attorneys is in place. The KJC and the KPC are

responsible for

disciplinary proceedings.

Further provisions on disciplinary proceedings

need to be adopted, such as a law on the Office of the Disciplinary Counsel/Prosecutor

(ODC/ODP) and provisions on the judicial review of disciplinary decisions taken by the

Councils. The ODC/ODP initiated around 40 cases against prosecutors on disciplinary and

ethical grounds. The President of Kosovo, based on recommendations made by the KJC and

the KPC, dismissed from office one judge and one prosecutor. Five judicial administration

officers under suspicion of abuse of power were suspended and later dismissed. In addition,

one judge was suspended by the ODC due to allegations of taking bribes. Under applicable

laws, judges and prosecutors are obliged to

declare their assets

and gifts received, and report

any possible conflicts of interest.

Professionalism and competence

Under Kosovo’s Constitution, the President of Kosovo

appoints

judges and prosecutors for

an initial three-year term, at the proposal of the KJC and the KPC respectively. The entry

exam for judges and prosecutors is based on merit. The new laws foresee an obligatory initial

training for both judges and prosecutors after they have been appointed. The performance

evaluation

of prosecutors with a permanent mandate should be carried out by the KPC every

third year, but has experienced significant delays. The evaluation of judges is carried out by

the Commission for Evaluation of Judges and has proceeded as planned. To date, most judges

and prosecutors that were evaluated have passed; only one judge was not proposed for

permanent appointment. Merit-based performance criteria and an evaluation system within the

initial term of appointment, including at the end of the initial training, need to be adopted to

ensure professionalism.

Quality of justice

The Kosovo Judicial Institute (KJI) is responsible for initial and continuous

training.

However, the new laws give the KJC and KPC more responsibilities with regard to policy

planning and organisation of the training courses. Out of 29 candidates who graduated from

the initial legal education programme in May, 17 have been appointed as judges. The KJI, the

KJC and the KPC jointly prepare annual training curricula on the basis of a comprehensive

needs assessment. The curricula, which are divided into training modules according to

responsibilities of departments of courts and prosecutors’ offices, specify the areas to be

covered by training, including training on EU law. A new curriculum for court administrators

has been approved and relevant staff is being trained. Kosovo currently has 19.5 judges per

100 000 inhabitants. In total, there are 350 local judges and 33 EULEX judges.

The

budget

for Kosovo’s prosecution service and court system for 2015 is around EUR 28

million, excluding some other services, such as mediation and legal aid. The total budget

allocated to the justice system has increased to 1.7 % of the overall Kosovo budget. A

comprehensive overview of public finances allocated to the entire judicial system is however

still not publically available.

The Palace of Justice was inaugurated in March 2015, providing the necessary infrastructure

to allow for the administration of justice under the appropriate conditions. To date, the Palace

of Justice houses the Supreme Court, the Basic Court of Pristina, the Appellate Court, the

Appellate Prosecution and the Basic Prosecution of Pristina.

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There is no official court monitoring system in place.

E-Justice tools

remain under

developed.

Since 2008, a

mediation

system is operational, with seven regional mediation centres and 701

mediators licensed by the Ministry of Justice, 163 of which are active. The number of cases

has constantly increased – between 2012 and July 2015 the mediation system dealt with 2 598

cases. While notaries are dealing with more cases, their professional skills need to be

improved. Both the mediation and notary systems require further strengthening.

Efficiency

According to the Annual Report of the State Prosecutor, at the beginning of 2015, the State

Prosecutor had 120 706 cases pending. Correspondingly, according to the Department of

Statistics of KJC, at the beginning of 2015 the number of unsolved cases was 91 545.

Concerning the

backlog

(cases filed before 31 December 2011), 16 090 cases were completed

at the end of 2014 out of a total of 41 038. The number of backlog cases at the beginning of

2015 was 24 948, out of which approximately 3 000 cases were completed during the first

half of 2015.

Kosovo's courts now have a

clearance rate

of 84 % (up from 71 %) of cases resolved within

a year. There are no figures on the

disposition time

(i.e. the average time from filing the case

to a decision) in Kosovo’s courts. The success of Kosovo's judiciary continues to be

hampered by a high level of latent corruption and intimidation present in rule of law and

related public institutions. The time prescribed by law to investigate cases of organised crime

and corruption is too short resulting in courts not having sufficient information to come to an

informed decision.

Fight against corruption

Kosovo is

at an early stage

in the fight against corruption.

Some progress

has been achieved

over the past year, notably in improved cooperation between the Anti-corruption Agency and

the prosecution, and in requiring officials to declare property and gifts. However, overall

progress has been limited and strong political will and commitment is needed to tackle this

phenomenon properly. A comprehensive and strategic approach is necessary to ensure real

results in fighting endemic corruption in Kosovo. A track record of successful prosecution

and convictions would represent real progress. In addressing the shortcomings outlined below,

the government of Kosovo should pay particular attention in the coming year to:

→

prioritising handling of high-level corruption cases, especially in public procurement, with

a view to securing final convictions;

→

strengthening the cooperation between police and prosecution through joint investigation

teams on high-level corruption cases;

→

concluding the development of an efficient system to monitor the track record of case

handling from investigation to final court rulings;

→

revising the conflict of interest law and all related laws and regulations to bring in line

with European standards. In particular, categories of public officials should be clearly

defined and measures on preventing and sanctioning conflicts of interest and regulating

"revolving doors" need to be adopted.

Track record

Kosovo has not yet established a track record of

investigations, prosecutions and

convictions

in corruption cases. In 2014, the Anti-corruption Agency conducted

administrative procedures in a total of 304 cases, of which 56 were carried over from previous

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years and 248 were new. The rare investigations into high-level corruption have so far not

resulted in final convictions.

The failure to conduct effective

financial investigations

is closely linked to undue political

influence and limited capacity. Kosovo’s expertise in tackling complex financial

investigations and to effectively confiscate

criminal assets

is still limited. Undue

political

influence

on law enforcement and judicial bodies continues. Political authorities should

ensure that law enforcement bodies are fully empowered to act effectively and impartially

when investigating corruption allegations.

Ten political parties failed to submit their

party financing and electoral campaign

financing

reports during the local elections, but all parties did so for the general elections in

2014. So far, no irregularities have been detected. Auditors at the Central Election

Commission are not independent as they are selected by the Assembly. In order to prevent

conflicts of interest,

such auditing should be external.

Whistle-blowing

and

witness

protection

need to be properly implemented, including better regional and international

cooperation.

Declarations of assets

by senior officials are made public on the Anti-corruption Agency's

website and 98.3 % of senior public officials have reported their assets in 2015. Criminal

charges were raised against the 71 senior public officials, who did not declare their assets. In

2015 the Anti-corruption Agency selected 20 % of officials for a review of their property

ownership. This is a positive development but could be further improved by prioritising

corruption-prone positions.

Kosovo should consider measures allowing it to effectively investigate inexplicable wealth.

Institutional framework

The four main institutions involved in the fight against corruption in Kosovo are the Anti-

corruption Agency, an independent and specialised agency; the National Anti-corruption

Council, a consultative body chaired by the President of Kosovo; the National Anti-corruption

Coordinator, who is assigned by the Chief State Prosecutor; and the Directorate for

Investigation of Economic Crimes and Corruption within the Kosovo police. The Anti-

corruption Agency does not have full investigative powers: rather its role is in prevention and

preliminary administrative investigations, in line with international standards. There is a

general disconnect and lack of integration between the main anti-corruption bodies in Kosovo,

which suffer from overlapping mandates and an unclear division of tasks.

prevention,

the Anti-corruption Agency launched an anti-corruption awareness campaign

in December 2014. Citizens have been encouraged to report corrupt behaviour to rule of law

agencies, but more remains to be done. While civil society is involved in developing and

monitoring anti-corruption policy, consultation needs to be improved through regular,

transparent and constructive communication.

Public procurement bodies have largely failed to ensure systematic monitoring and review of

procurement decisions. It is essential that new competent board members are appointed to

professionalise and de-politicise the procurement system.

law enforcement,

a prosecutor was assigned to each basic court prosecutor’s office to

increase coordination and communication between the State Prosecutor and the Anti-

corruption Agency. Over 70 % of cases for which the Agency conducted preliminary

investigations were dropped, mainly because prosecutors did not find sufficient grounds to

continue investigations. The Agency's investigators need to increase the quality of their

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reporting, while prosecutors need to demonstrate the necessary capacity and willingness to

pursue cases.

More structured cooperation between law enforcement agencies was achieved with the

appointment of a National Coordinator against Economic Crime. The anti-corruption task

force with 30 investigators, eight prosecutors and five experts focusing on high-level

corruption and financial crime cases, should be further strengthened to improve inter-agency

co-operation. A positive step was the adoption of the standard operating procedure on

prioritising serious crime cases in 2014, which resulted in nine serious crime cases being

currently treated as priority, including on corruption and money laundering charges. Two of

these cases have been sent to court.

Legal framework

The legal anti-corruption framework has been consolidated with amendments to the law on

the financing of political parties and the law on the declaration, origin and control of the

property of senior public officials and the declaration, origin and control of gifts for all

official persons. The latter extended the list of persons obliged to declare their property and

lowered the threshold for the value of movable property to be declared from EUR 5 000 to

EUR 3 000 and has led to an increased number of declarations of properties and gifts. These

laws are in line with the relevant provisions of the criminal code, ensuring that corruption-

related offences are criminalised. In this way, Kosovo has aligned itself with the

acquis.

Kosovo’s law on conflicts of interest has yet to be revised. The scope of the law should not

exclude certain categories of public officials such as political advisers, but instead define

public officials in line with European standards. Equally, the law should indicate exact

circumstances in which public officials may take on additional employment and

appointments. Clear procedures to identify, manage and resolve conflicts of interest should be

established in the law. Relevant legislation needs to be harmonised accordingly, in particular

on the sanctioning regime, including disciplinary measures.

The regulatory framework for political party financing has undergone many changes. The

closing of various loopholes has improved the process. However, major challenges remain in

this area, namely shortcomings in the way rules are implemented, a lack of monitoring and the

absence of regulatory bodies. In general, the financing of political parties lacks proper control

mechanisms, which would improve transparency and limit misconduct by political parties.

Strategic framework

Kosovo is implementing its 2013-2017 anti-corruption strategy and action plan, under the

monitoring of the Anti-corruption Agency. However, inadequate financing and a lack of any

measurable impact indicators are seriously undermining results. Implementation of the 2014-

2018 strategy and action plan for preventing and combating the informal economy, money

laundering, terrorist financing and other financial crimes is on schedule. In addition, sector

action plans are in place to fight corruption in particularly vulnerable areas (customs, police,

tax administration etc.). A corruption risk assessment of the health, education, judiciary,

energy, and mining sectors was published in 2015.

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Fight against organised crime

Kosovo is

at an early stage

in the fight against organised crime.

Some progress

has been

made over the past year in inter-institutional cooperation and information exchange among

law enforcement agencies on investigations. Kosovo has also stepped up its efforts to fight

terrorism and the phenomenon of foreign fighters. Overall, the focus on strategies and action

plans should not obscure the need for real results in fighting endemic organised crime.

The number of final convictions and financial investigations remains low. Confiscations of

assets are rarely applied. In addressing the shortcomings outlined below, the government

should pay particular attention in the coming year to:

→

pursuing organised crime-related investigations with the aim of securing final convictions,

thus beginning to dismantle criminal groups active in Kosovo;

→

systematically applying tools for financial investigations and asset confiscations in order

to increase the number of permanent confiscations, and building up expertise at all levels;

→

fully developing an intelligence-led policing approach and collecting, harmonising,

analysing and using relevant criminal statistics, including through better inter-agency

cooperation.

Track record

The rate of convictions in cases against

human trafficking

remains low, despite Kosovo

being a source and transit country for trafficked women and children. Kosovo has worked

closely with Europol on the dismantling of migrant smuggling networks.

drug trafficking,

drug seizures and conviction rates remain low. A number of

investigations and arrests have been made as part of efforts to fight and prevent the spread of

terrorism

in Kosovo. Implementation of applicable laws, secondary legislation and

regulations on

money laundering and financial crime

is still insufficient, despite progress

on putting appropriate systems in place. There is a policy of systematic serious

financial

investigations,

but results are lacking. The rate of

confiscation and sequestration of

criminal assets

remains low. Statistics on sequestration and confiscation are still not

sufficiently harmonised between Prosecutorial and Judicial Council, the Agency for

Managing the Sequestrated and Confiscated Assets and other agencies. While the overall

estimated value of frozen and temporarily confiscated assets has increased, final court rulings

are necessary to make sure that illicit assets are confiscated permanently.

Events in Kumanovo (the former Yugoslav Republic of Macedonia) and the involvement of

Kosovo citizens in armed violence highlight the continued existence of

armed groups

in the

region, threatening regional inter-ethnic stability. With military-grade weaponry, military

training and command structures, such groups have the capacity to undermine stability. Their

involvement in organised criminal activities, such as arms smuggling, and the apparent

impunity with which they are able to operate across borders are serious concerns. The

government, law enforcement agencies and the judicial system need to take swift action to

dismantle these networks.

Institutional and operational capacity

Kosovo’s police has around 9 000 staff, which makes an overall of approximately 500

policemen per 100 000 inhabitants. Approximately 83 % of police staff are ethnic Albanians

and 13 % ethnic Serbs, with the remainder coming from other communities. Kosovo’s police

force is structured in a way that provides for a career path and evaluation mechanism and has

also adopted a code of ethics. The Kosovo Academy for Public Safety is responsible for basic

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and specialised training and offers a bachelor’s programme in public safety. The Kosovo

police has

specialised units

dealing with the various aspects of organised crime. The police

inspectorate is responsible for the prevention, detection, documentation and investigation of

criminal offences of police officers regardless of position or rank.

12 out of 15 positions for local prosecutors in Kosovo’s Special Prosecution Office have been

filled. However, the Special Prosecution Office does not have the required human resources to

cope with the expected workload in view of the planned handover of cases from EULEX.

Local prosecutors are dedicated but often do not have the necessary technical expertise,

especially as concerns investigations of war crimes. Cooperation between local and EULEX

prosecutors has improved.

Intelligence-led policing should be strengthened further, including with human resources and

managerial guidance. The new Kosovo police information system has yet to be used by all

levels of the Kosovo police, which would allow for improved risk analysis and proactive

operations. Kosovo is not a member of

Interpol,

though it applied in April 2015. It currently

participates in Interpol structures through UN intermediaries. Kosovo does not have a

cooperation agreement with

Europol.

Kosovo’s police has been involved, upon request of the

leading Member States, in three cross-border operations supported by Europol.

The Kosovo Forensic Agency and its DNA and serology laboratory have all the necessary

equipment and instruments to carry out DNA analysis, maintained and calibrated according to

international standards. The Kosovo Forensic Agency has an internationally accessible DNA

database, which enables research and electronic comparison of DNA profiles.

In December 2014, Kosovo’s police, custom authorities, Financial Intelligence Unit and the

Kosovo Prosecutorial Council signed a Memorandum of Understanding, agreeing on how to

improve cooperation and the exchange of data. Kosovo signed agreements with Albania on

cross-border cooperation and hot pursuit, while similar agreements have also been signed with

the former Yugoslav Republic of Macedonia.

Legal framework

There has not yet been any assessment of the alignment of Kosovo's criminal code with

European standards. An appropriate legal framework for witness protection is in place in the

form of the law on witness protection and the accompanying administrative instructions.

Legislation on the confiscation of proceeds of crime is mostly in line with the

acquis,

but

implementation remains poor. The law on the interception of telecommunications was

adopted in May 2015, setting out appropriate investigation measures to help identify and

prosecute suspects involved in serious criminal offences, with due respect for relevant human

rights. In January 2015, the Kosovo Assembly approved the law criminalising the joining of

armed conflicts outside of Kosovo, in line with the relevant UN Resolution.

Strategic framework

Kosovo's strategies and action plans to combat organised crime are largely aligned with EU

best practices. Kosovo produced a strategic organised crime threat assessment in 2013. The

assessment does not fully follow Europol's SOCTA methodology, but does provide the basis

for strategic decision-making and law enforcement. Training has been provided in 2015 on

the Europol SOCTA methodology.

To date Kosovo has implemented some 80 % of the action plan to accompany its 2012-2017

national strategy against organised crime. Additional national strategies and action plans are

in place on the prevention and combat of the informal economy, money laundering, terrorism,

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radicalisation and extremism, and terrorist financing, human trafficking, cybersecurity and

narcotics trafficking.

Fight against terrorism

Kosovo has been affected by the phenomenon of foreign terrorist fighters and radicalisation.

Kosovo has stepped up its efforts in the fight against terrorism. As well as the law on foreign

terrorist fighters, it also adopted a strategy and action plan on prevention of violent extremism

and radicalisation that may lead to terrorism. The phenomenon of foreign terrorist fighters

needs a dedicated approach by the intelligence and law enforcement community and a

coherent judicial policy towards offenders.

2.4.

Human rights and the protection of minorities

The legal framework broadly guarantees the protection of human and fundamental rights in

line with European standards.

Some progress

was made in this area, notably with the

incorporation of international standards into the legal framework, although Kosovo cannot

currently formally associate itself with international human rights instruments or

institutions. Implementation of human rights is hindered by a lack of resources and political

commitment, including at local level. The adoption of the package of human rights laws

strengthened the institutional set-up and clarified the roles of various institutions.

Shortcomings particularly affect the following areas:

• Gender-based violence and women’s limited access to property ownership significantly

hamper their full enjoyment of rights. Similarly, the rights of persons with disabilities

continue to be hindered by inadequate institutional support and health services, and poor

accessibility.

• Cases of verbal and physical assaults against lesbian, gay, bisexual, transgender and

intersex (LGBTI) persons are rarely investigated. This needs to change.

• Legislation and strategies on the rights of persons belonging to minorities and their

protection throughout Kosovo need to be rigorously implemented.

• Protection of cultural heritage, including cooperation between the Serbian Orthodox

Church and Kosovo authorities, remains problematic and legislation to address illegal

construction needs to be implemented and enforced.

Kosovo’s Constitution provides for the direct applicability in Kosovo of many

international

human rights instruments,

which form an integral part of its legal framework. Progress

continues to be made in aligning legislation with such instruments and Kosovo continues its

practice of ad hoc reporting.

On the

promotion and enforcement of human rights,

some progress has been made with

the adoption of the package of human rights laws (the laws on the Ombudsperson, gender

equality and protection from discrimination). This strengthened the institutional set-up and

clarified the roles of various civil and public institutions (e.g. the Ombudsperson's Office and

the Agency for Gender Equality). Proper implementation of these laws, including training and

establishing a judicial track record of discrimination cases, is crucial for the effective

promotion and enforcement of human rights throughout Kosovo. The human rights strategy

needs to be updated. Human rights issues need increased political and financial commitment

at all levels. Continued donor dependency of the government in this sector undermines

ownership and effective delivery.

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As regards the

prevention of torture and ill treatment,

no violations of internationally

recognised human rights standards have been formally identified during the reporting period.

Through amending the law on the Ombudsperson, Kosovo has aligned with the requirements

of the Optional Protocol to the Convention Against Torture, establishing the role of the

Ombudsperson as the National Preventive Mechanism, thereby strengthening its institutional

framework with regard to the human rights of detainees.

Within the

prison system,

there is overall good compliance with the UN Standard Minimum

Rules for the Treatment of Prisoners and European Prison Rules, while further efforts are

necessary to ensure adequate treatment of prisoners in solitary confinement and with regards

to aligning with these standards. The housing of prisoners awaiting trial and those convicted

for minor offences together with long-term prisoners remains a concern. The

Mitrovicë/Mitrovica Detention Centre which should only hold pre-trial detainees, still houses

convicted prisoners. Recommendations stemming from inspections at Kosovo Correctional

Service facilities by the Internal Inspectorate of the Ministry of Justice are not systematically

addressed. Serious concerns remain over corruption and contraband goods in detention

centres and some correctional centres, as well as on privileges afforded to certain high-profile

detainees. The government needs to urgently address this. Inadequate staffing levels, in

particular at the high security prison, remain a concern. There is also concern over the

politicisation of appointments to the prison service.

The development of

protection of personal data

is at an early stage. Kosovo has an

independent data protection authority – the National Agency for the Protection of Personal

Data (NAPPD) – that contributes to the implementation of EU standards in the area.

However, further strengthening of its capabilities including with qualified staff and financial

resources is necessary. The institutional and legal framework for data protection and access to

public information has to be established and regularised. Out of 38 municipalities, 35 now

have data protection officers. The NAPPD carried out an increasing number of inspections

and repeat inspections. A significant increase in the number of complaints from members of

the public suggests increased awareness.

Legal provisions are in place in the field of

freedom of thought, conscience and religion.

The Orthodox seminary in Prizren has expanded its membership and continues to function

well. Modalities on how to support the reconstruction of Serbian Orthodox Church sites, left

unfinished by the Reconstruction Implementation Commission, need to be agreed upon.

Interaction among religious leaders of all faiths has become more regular. Following the

recent decision by the Appellate Panel of the Special Chamber of the Supreme Court, there is

a need for intensified and renewed efforts to find a solution to the longstanding land dispute

between the municipality of Deçan/Dečane and the Visoki Dečani Monastery, to reduce

continuous tensions between the monastery, municipality and local community. There were

no reports of any serious incidents linked to the protection of historical and religious sites

under the responsibility of the Kosovo police. Continuing incidents of petty theft and

vandalism at religious heritage sites need to be followed up effectively. The authorities have

as a rule responded appropriately to such incidents, although a statement after an incident of

graffiti at the Visoki Dečani Monastery aggravated inter-communal tensions.

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Freedom of Expression

Kosovo has

some level of preparation

on the right to freedom of expression; over the past

there has been

no progress

in this area

There were no legislative developments on the

regulation of media ownership and transparency. No solution was reached on the sustainable

funding of the public broadcaster, leaving it vulnerable to political pressure and influence.

Implementation remains a serious challenge. The overall environment is not conducive to the

full exercise of freedom of expression. In addressing the shortcomings outlined below, in the

coming year, Kosovo should in particular:

→

ensure that cases of physical attacks against journalists and other forms of pressure are

thoroughly investigated;

→

ensure a sustainable financial solution for the public broadcaster and provide for

transparent information on media ownership.

Intimidation of journalists

Three serious physical assaults against journalists took place during the reporting period. A

total of 26 cases of attacks, threats and obstruction of journalists are under investigation. In

one case, the editor of a newspaper and chair of the Association of the Journalists were

physically attacked by the newspaper owner following the disclosure of non-payment of

newspaper staff’s salaries. In another case, a bomb was thrown at the premises of a Serb

online portal in Mitrovicë/Mitrovica North. A more systematic response, including public

denouncement, prompt investigation and timely adjudication, would strengthen the protection

of journalists. Investigations are slow and the record of final convictions low, with no

convictions in 2014.

Legislative environment

While freedom of media and expression are constitutionally guaranteed, and legislation on

libel, hate speech and defamation are in line with European Court of Human Rights case law,

effective implementation remains a challenge. The legislative and institutional framework in

this area remains fragmented and ineffective. Journalists’ right to conscientious objection and

the public’s right to reply and correction remain unregulated.

Implementation of legislation/institutions

Two members of non-majority communities were appointed, completing the board of the

Independent Media Commission (IMC). The IMC still failed to take decisions in good time,

undermining its targets for 2014, including timely preparation for the process of the digital

switchover. The IMC needs to complete secondary legislation in line with EU Directives and

more systematically monitor the content of audio-visual media. As a result of government

cuts across the board, the IMC is facing difficulties in meeting its financial obligations,

including for capital investment.

Freedom of expression online is not monitored by either the IMC or the Press Council.

Although this creates an ideal environment for online media, it also detracts from the privacy

of individuals, leading to many cases of alleged hate speech, libel and defamation.

Public service broadcaster

The public service broadcaster, Radio Television of Kosovo (RTK), is directly publicly

financed. The April 2015 deadline for adopting legislation to solve the funding issue was

missed. In the autumn of 2014, several protests were organised by the public broadcaster's

union, which accused the RTK of mismanagement, nepotism and corruption. In April, the

Assembly called on the Auditor General to carry out a detailed financial and performance

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audit of the public broadcaster. In July, the Assembly appointed four out of five members to

the RTK Board, amid concerns that they do not meet the required professional criteria.

Economic factors

The economic sustainability of the media is not ensured. Media ownership structures, in

particular for print and online media, remain unclear. The lack of a strong private advertising

industry makes private broadcasters dependent on international donors and very few are able

to operate without political party support. Many Serbian-language media outlets risk closure

because their advertising market is too small to be economically viable.

Professional organisations / professional conditions

The Association of Journalists of Kosovo, representing most journalists, has been very active

in condemning pressures and in advocating for rights. Journalists tend to have low wages and

often work without contracts, vulnerable to corruption and prone to self-censorship. The

independence of journalists and editors and the protection of professional standards in

journalism remain unregulated. Editorial codes of conduct at individual media outlets would

be helpful.

Freedom of assembly and association

is guaranteed by the Constitution and citizens have

been exercising it freely, including by staging protests against various levels of government.

There was no progress on

property rights.

The government’s Property Rights Coordinator

position has been vacant since January 2015. A strategy on property rights is being developed

which, once approved, may remove the need for a coordinator. The implementation of the

Law on Treatment of Construction without a Permit faces a number of problems whereby

documents required by law do not require proof of ownership over the land parcel when

submitting an application for legalisation nor is the relevant Ministry obliged to check land

registry records in the process of legalisation. Residents (in particular minority communities

and displaced persons) were not informed in time about the process of legalisation. Concerns

remain with regard to treatment of unpermitted constructions belonging to displaced persons

who have failed to apply, since such properties will be included in the demolition list.

Decisions by the Kosovo Property Agency (KPA) on applications to demolish illegal

constructions in private property have not been implemented due to a lack of financial

resources, seriously affecting the rights of internally displaced persons. There has been some

improvement on complying with legal obligations during expropriations. However, concerns

remain over language compliance and notification of vulnerable groups in the expropriation

process.

Kosovo needs to solve all conflict-related property claims. The Law on the Property

Comparison and Verification Agency is still pending. The Property Claims Commission of

the KPA has reached a decision in all cases, albeit with technical inconsistencies in some of

them. The KPA continues to clear illegally occupied properties south of the Ibër/Ibar river.

The strategy to regularise informal settlements is still pending. Some relatively limited

progress has been noted in addressing issues of social housing. Provision of social housing is

hampered by the failure of institutions at central level to adopt a three-year Kosovo-wide

strategy.

As regards

non-discrimination,

the adoption in May 2015 of the Law on the Protection from

Discrimination is a major step forward. The Ombudsperson now has a mandate to act as an

equality body. Hate crimes are proscribed in Art. 147 of the criminal code. The performance

of Kosovo institutions in processing and investigating cases of hate speech, targeting mainly

members of the LGBTI community and ethnic minorities, remains poor. The Kosovo

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Prosecutorial Council’s tracking mechanism needs to be extended to cover cases of all kinds

of discrimination, not only those based on ethnicity.

Kosovo's legal framework on

equality between women and men

improved through the

adoption in May of the Law on Gender Equality in accordance with international standards.

However, significant structural challenges remain and implementation will require serious

effort. The impact of the inter-institutional secretariat monitoring implementation of the

action plan on UN Security Council Resolution 1325 has until now been limited. The role of

the Agency for Gender Equality in policy-making needs to be enhanced. Women remain

under-represented in decision-making positions, including at municipal level. At national

level, the situation worsened, as only two ministers out of 22 are women and only two out of

14 chairs of parliamentary committees.

Every police station has a unit responsible for gender-based violence. Despite the recent

appointment of a national coordinator for domestic violence, no progress has been made on

combating domestic and gender-based violence. The absence of a system of regular data

collection across institutions undermines the ability to cross-track and monitor cases in

investigation and judiciary proceedings. Kosovo needs to evaluate the implementation of the

2011–2014 strategy and action plan against domestic violence before drafting a new one. The

anti-trafficking and domestic violence help-line should provide assistance to non-Albanian-

speaking victims, including ensuring similar services for residents in the northern

municipalities. The mandate of the National Council for the survivors of sexual violence

during the war was extended to address the need for comprehensive support for surviving

victims. Effective implementation of women’s rights to inheritance remains limited, despite

the existence of legal provisions governing this issue. Further efforts need to be made by

cadastral and registration officers on registration of all co-owners of property, including

women, in order to strengthen the protection of their rights.

On the

rights of the child,

the legal framework is in place but implementation is weak at both

national and local level. An assessment of the implementation of the 2009-2013 strategy and

action plan on children's rights needs to be carried out and results taken into consideration

when developing a new strategy. The successful development of policies depends on the

availability of sex and age-disaggregated data. A law on child protection should avoid

duplication of existing legislation on children's rights. Municipal Child Rights Co-ordinators

need capacity building and sufficient budget. Awareness-raising and training on rights of the

child need to continue and the Ombudsperson’s Office needs to increase its activities in this

field. Physical or any other form of humiliating punishment in educational and training

institutions is prohibited by law but not in other settings such as public spaces or family.

Increased awareness among judges and prosecutors led to a systematic reduction of pre-trial

detention periods for juveniles. However, the legal framework needs to be revised to

accommodate the UN Committee on the Rights of the Child recommendations on reducing

pre-trial detention to six months.

On the

integration of persons with disabilities,

Kosovo needs to improve the

implementation of the 2013-2023 strategy for the rights of persons with disabilities and its

2013-2015 action plan. Health services and support for the rehabilitation of persons with

disabilities remain insufficient and physical access to public institutions remains a challenge.

The unsubstantiated removal of more than 1 000 members of the deaf community from the

disability pension scheme is a concern. The availability of personal assistants for children

with disabilities needs to be ensured. The National Disability Council has so far failed to

promote the rights of persons with disabilities and needs stronger support from the

government's Office for Good Governance to enable it to exercise its coordinating role in

implementing the strategy and action plan.

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On the rights of

lesbian, gay, bisexual, transgender and intersex (LGBTI)

persons, the

package of human rights laws has addressed gaps in legislation on the protection of sexual

orientation and/or gender identity. Cases of verbal and physical assaults against the LGBTI

community are rarely addressed adequately by the authorities. Despite meeting regularly, the

advisory and coordinating group for the rights of the LGBTI community has yet to produce

concrete results. The government has started awareness-raising training for civil servants, law

enforcement officials, the judiciary, media and teachers. A pride walk to mark the

international day against homophobia took place for the second time in Pristina on 17 May,

with no incidents. However, Kosovo’s political leaders need to do more to raise awareness

and promote tolerance.

labour and trade union rights,

the General Collective Agreement signed in March 2014

is still not implemented due to lack of budget. This triggered a wave of protests across

different sectors. Implementation of the law on strikes remains unsatisfactory, due to a lack of

communication between strike organisers and the authorities. Representation of employees

within the Social and Economic Council is still challenged by the majority of trade unions and

amendments to the law on the Social and Economic Council need to clarify criteria and

procedures.

(See also 4.1.8 — Employment and social policies, public health policy)

procedural rights,

the suspected, accused persons and victims of crime in Kosovo enjoy

solid protection under the legislation (the Criminal Procedure Code, Law on Police, Law on

the Kosovo Police Inspectorate, Law on Crime Victim Compensation as well as the Law on

Free Legal Aid). They have the right to interpretation and translation, the right to information

about rights, the right to legal advice before and at trial and to legal aid, and the right for the

detained person to communicate with family members, employers and consular authorities.

There is a strong political will for fair implementation of these rules but more training is

needed to secure Kosovo citizen's procedural rights in practice.

Kosovo's legal framework for safeguarding and protecting

minorities

is comprehensive,

although implementation remains a challenge. The political impasse following the dismissal

of the Minister for Communities and Return in early February 2015 affected the functioning

of the ministry. Appointment of a new minister in April led to renewed commitment to

identifying a durable solution for the issue of Kosovo displaced persons in the region, notably

through an Inter-ministerial Commission on Returns. The Technical Working Group for the

Framework Convention on National Minorities was established but has only met once in June

2015. The Office of Community Affairs needs to take on a more robust role on minority

policy, including on matters dealt with by the technical working group and the post-2015

policy for Roma, Ashkali and Egyptians. The Consultative Council for Communities met

regularly and set up five sector-based working groups, but urgently needs increased funding

and support to function effectively and have its recommendations taken into account.

Kosovo needs to continue improving the employment of non-majority communities within the

Kosovo civil service and public enterprises. A permanent solution to the issue of acceptance

of diplomas of the University in Mitrovicë/Mitrovica must be found to enable members of the

non-majority communities to better integrate, including through employment in government

institutions. Significant challenges remain in access to services in official languages both at

the central and municipal level, including languages used by minority communities. The

Office of the Language Commissioner continued to carry out its duties in a satisfactory

manner in spite of limited financial and human resources, including through increased

cooperation with other institutions. The Office has yet to establish relations with the four

northern municipalities.

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Incidents at a football match between Serbia and Albania in October 2014 led to a short but

sharp increase in inter-ethnic incidents. While the overall security situation for non-majority

communities remains relatively stable, an increasing trend of incidents occurred targeting the

Kosovo Serb community residing in western Kosovo, with frequent thefts from homes

causing a heightened sense of insecurity within the affected community. Kosovo’s police and

judicial authorities need to develop a better understanding of what constitutes an inter-

ethnically motivated incident. Efforts are still needed to further stabilise and normalise inter-

ethnic relations. Incidents and crimes targeting members of minorities and their property

should be investigated and prosecuted thoroughly and promptly.

As regards the

Roma, Ashkali and Egyptian communities,

the 2009-2015 strategy and

action plan for the integration of Roma, Ashkali and Egyptian communities continued to be

implemented. The government must demonstrate commitment in practice to continue

developing and drafting credible, realistic and measurable post-2015 policy commitments. All

relevant stakeholders, including civil society and members of parliament representing the

three communities need to be involved and recommendations incorporated. 12 municipalities

adopted local action plans on the integration of the three communities. The learning centres

have played a positive role in reducing the school drop-out rates. The Roma, Ashkali and

Egyptian communities have the same access to healthcare services as other citizens and the

Ministry of Community and Returns sets aside budget for housing. Members of these

communities continue to face difficult living conditions, social exclusion and frequent

discrimination, while child labour and early marriages continue to be prevalent. Access to

labour market is difficult and informal employment prevails. Active measures to include these

communities in the job market need to be pursued. Progress has been made with regard to

solving registration problems for children and the government extended its assistance to the

registration process to over 600 displaced Roma, Ashkali and Egyptians currently in

Montenegro. In the absence of identity documents, Kosovo has yet to produce reliable data on

its Roma, Ashkali and Egyptian communities.

Authorities at local and central level did not do enough to facilitate return and reintegration of

refugees and internally displaced persons

(IDPs). Illegal occupation of residential,

agricultural and commercial property continues to affect the property rights of IDPs and

hinders returns. Municipalities are still not taking the initiative to collect and maintain data on

numbers and locations of IDPs and returnees. Greater commitment at local level is urgently

needed. Figures from the reporting period show some of the lowest number of voluntary

returns (around 800) since 2000. A lack of government commitment and funding, together

with poor economic prospects, create an environment less conducive to returns.

cultural rights,

cooperation between the Kosovo authorities and the Serbian Orthodox

Church within the Implementation and Monitoring Council (IMC) continues, although

meetings have become less regular and the Ministry of Culture has become less involved. In

the interest of sustainability, the government should plan for and allocate necessary funds for

the functioning of the IMC secretariat. The Religious and Cultural Heritage Unit of the

Kosovo police fulfils its mandate, in four regions, to protect Serbian religious and cultural

heritage sites with 205 officers. Ongoing challenges include improving communication with

the resident Orthodox clergy and the provision of sufficient equipment.

The Village Council of Velika Hoča/Hoçë e Madhe was established and a budget was

allocated, marking the first step of the implementation of the law. With limited municipal

capacity, central-level guidance continues to be needed to ensure full implementation of these

laws. There has been progress in implementing the Law on the Historic Centre of Prizren with

equipment and premises provided for the Cultural Heritage Council, although funds have yet

to be allocated. Incidents of illegal demolition of cultural heritage have continued. The task

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force set up last year to deal with illegal construction in Prizren, has been reinvigorated but

has to date not delivered concrete action. More efforts are needed to investigate violations and

sanction perpetrators. Concrete results in countering illegal construction, demolition and

adverse development are needed to demonstrate the Government's commitment to protecting

cultural heritage

Of particular concern was an attempt, through the introduction of a draft law on cultural

heritage, to undermine legislation deriving from the Comprehensive Settlement Proposal

(CSP), which establishes specific rights and privileges for the Serbian Orthodox Church

(SOC). The draft was quickly withdrawn but is expected to be soon introduced again. Kosovo

needs to demonstrate its commitment to respect legal provisions deriving from the CSP and

offer assurances to the SOC that its rights, privileges and identity will not be challenged.

2.5.

Regional issues and international obligations

In August 2015, the Kosovo Assembly adopted constitutional amendments and passed the

necessary legislation creating the conditions for the establishment of the Specialist Chambers

and Specialist Prosecution Office to follow up on allegations of

grave trans-boundary and

international crimes

committed during and after the conflict in Kosovo, as relating to those

reported in the 2011 Council of Europe Parliamentary Assembly report. The Chambers will

be subject to Kosovo law, but will be located outside of Kosovo. The Kosovo authorities

should now work on completing the regulatory framework.

Kosovo has set up a war crimes department within its Special Prosecution Office. However,

the department does not have enough prosecutors to carry out its current tasks, which would

increase when EULEX investigations and cases are handed over. The Kosovo police war

crimes investigation unit has received additional staff. However, the lack of investigators with

an ethnic Serb background, limited criminal intelligence analysis staff, a lack of language and

translation capacity and a lack of basic equipment such as vehicles and computers mean that

the unit cannot function properly. EULEX is supporting Kosovo in building up the capacity to

effectively take over war crimes investigations and prosecution. In most pending war crimes

cases, the suspects are ethnic Serbs residing mainly in Serbia. Given the political climate, the

local unit will not be able to deal with these cases independently. In the rest of the cases (166)

the suspects are ethnic Albanians and usually ex-KLA members. There is concern over the

capacity and willingness to investigate these cases.

The unresolved fate of

missing persons

from the conflicts of the 1990s remains a

humanitarian concern. As of August 2015, a total of 10 814 persons were still missing

according to the International Committee of the Red Cross. Of these, 1 670 cases relate to the

conflict in Kosovo. Ascertaining the fate of missing persons remains vital for regional

reconciliation and stability. The inter-ministerial working group on dealing with the past,

tasked with drafting the strategy on this issue, needs to be more active and produce concrete

results, with a special emphasis on victims groups and transitional justice. The governmental

commission on missing persons appointed municipal focal points. Pristina's dialogue with

Belgrade, through the working group on missing persons, chaired by the International

Committee of the Red Cross, has not made significant progress. The Pristina delegation to the

working group is currently incomplete and the new head needs to be appointed. Kosovo needs

to engage more pro-actively and provide information from its own sources. High-level

political support is needed to address the issue of the fate and whereabouts of missing

persons. Following the completion of the exhumation process at the gravesite located in

Rudnica, Raška (Serbia), human remains were identified and transferred to Kosovo.

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Kosovo’s Department of Forensic Medicine (DFM) does not, despite some progress, have the

capacity to meet the standards required for sustainable forensic practice, including in forensic

anthropology and toxicology. Coordination and cooperation between the governmental

commission on missing persons and the DFM needs to improve. Capacity needs to be

strengthened and staff from non-ethnic Albanian communities integrated.

The Commission and the DFM need to find a sustainable solution and allocate resources to

continue data entry in the ante-mortem/post-mortem database. The lack of progress on this

issue prevents the government from assuming its responsibility to establish, maintain and

manage the list of missing persons, in compliance with the law on missing persons. No

progress has been made regarding the unidentified human remains stored at the Pristina

morgue for which forensic action has been exhausted.

Regional cooperation and good neighbourly relations

form an essential part of Kosovo's

process of moving towards the EU. Kosovo participates in several regional organisations,

further to arrangements on regional representation and cooperation agreed with Belgrade in

February 2012. However, despite government efforts, Kosovo is still not represented in all

regional organisations, for instance the Southeast European Law Enforcement Centre.

A fresh impetus has been given to regional cooperation through the 'Berlin

process'

and the

Western Balkan six initiative, intensifying cooperation among the Western Balkan countries

and with the EU, notably regarding the

connectivity agenda.

In April, the Western Balkan

six countries reached an agreement on the core transport network and in June 2015 on

extending three Trans-European Transport Networks core corridors to the Western Balkans.

They also identified the priority projects along sections of these corridors to be implemented

by 2020. To ensure sustainability and achieve short term results, the countries agreed to

implement before the next summit in Paris a number of 'soft' measures such as aligning and

simplifying border crossing procedures, road safety and maintenance schemes.

Kosovo has further improved its relations with

Albania.

An agreement on mutual cooperation

was signed during Prime Minister Mustafa’s visit to Tirana in March 2015. The agreement

includes a wide range of protocols and memoranda on regional and cross-border cooperation

in a variety of sectors.

There are no official relations with

Bosnia and Herzegovina

as the latter does not recognise

Kosovo's independence. A reciprocal visa regime is in place.

Relations with the

former Yugoslav Republic of Macedonia

have remained constructive. A

memorandum of cooperation between the public prosecutors of both countries in combating

cross-border crime and terrorism was signed in late December. An agreement on the

encouragement and reciprocal protection of investments and a protocol on cooperation in the

field of diplomatic education were signed in Skopje in January. Following allegations of

involvement of Kosovo citizens in the attack on the border police station in Goshince

(21 April) and in the incidents in Kumanovo (9-10 May), the government of Kosovo

condemned the violence and called for territorial integrity to be respected. The government

also called for the full implementation of the Ohrid Framework Agreement.

A joint commission on border demarcation with

Montenegro

concluded its work in June

2015 and Ministers signed the border agreement during the August Western Balkans Summit

(Vienna), now pending parliamentary approval by both. There were no developments

concerning the constitutional recognition of the Montenegrin minority in Kosovo.

Kosovo has maintained very close relations with

Turkey.

Negotiations on a readmission

agreement are ongoing with a view to concluding it by the end of the year.

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NORMALISATION OF RELATIONS BETWEEN KOSOVO AND SERBIA

Kosovo and Serbia have remained engaged in the implementation of the agreements reached

in the dialogue, in particular the April 2013 ‘First agreement of principles governing the

normalisation of relations’. Work under the EU-facilitated dialogue has continued at technical

level throughout the reporting period. The high-level dialogue resumed in February 2015, and

four meetings attended by Prime Ministers Mustafa and Vučić were held in April, June and

August.

Key agreements were finalised on 25 August 2015. General principles/main elements on the

establishment of the Association/Community of Serb majority municipalities in Kosovo

through the adoption of its Statute were agreed. The text defines the legal framework of the

Association/Community, its objectives, organisational structure, relations with central

authorities, legal capacity, budget and financial support. It also provides the modalities/next

steps for its establishment. In the field of

energy,

two new Serbian energy companies (one

dealing with import, export and transit; the other with supply and distribution services) were

established in Kosovo. These companies are proceeding with their internal organisation

before being able to apply for licenses. An action plan detailing the implementation steps of

the

telecoms

arrangement was also approved. Kosovo and Serbia agreed to ask the European

Union to revitalise the

Mitrovicë/Mitrovica bridge

and its surroundings so that it can be

reopened to all traffic by summer/not later than June 2016. In line with the same timetable, it

was also agreed that the North Mitrovicë/Mitrovica municipality will revitalise its main street

(King Peter Street) by turning it into a pedestrian zone.

Progress has been made in other important areas. Following an agreement in February 2015,

the dismantling of the Serbian structures on justice is well-advanced. Serbia facilitated

applications of Kosovo Serb judges and prosecutors in the Kosovo judiciary. The proper

handling of cases in the Mitrovicë/Mitrovica Basic Court, where Serbian official statements

have at times interfered with the proceedings, requires a dispassionate environment.

Integration of Kosovo Serb

police and civil protection

personnel is nearing completion. An

agreement on

vehicle insurance

of June 2015, providing for the recognition in each other's

jurisdiction of Serbia and Kosovo's respective vehicle insurance, is being implemented. On

customs,

agreements were reached on the import of controlled goods into Kosovo, including

for medicines. In the context of the

liaison arrangements,

and following an agreement

reached in November 2014, all official visits are directly arranged by Liaison Officers.

Progress was also reached in the field of

cadastre:

a new archives building was opened in

Belgrade, where the scanning of documents pertaining to Kosovo is to be completed by June

2016. Following the Serbian Constitutional Court's rulings adjudicating that the form in which

some dialogue agreements have been transposed was unconstitutional, Serbia has adjusted its

regulatory framework related to these agreements, with the exception of freedom of

movement. The Constitutional Court's rulings on the energy and telecoms agreements are still

pending. Serbia needs to find legal solutions for the implementation of agreements that are

sustainable and can withstand legal challenges.

Implementation of other agreements has continued, albeit at a slower pace. On IBM, further to

the six interim facilities, two additional permanent

crossing points

were agreed, for which

Serbia has initiated the expropriation process on its territory. However, illegal crossing

roads/by-passes, in particular in the north of Kosovo, continue to be regularly used to smuggle

substantial amounts of goods. Additional measures need to be taken by Serbia to stop illegal

crossings. The processing of cases in the framework of the 2013 general modalities for

Mutual Legal Assistance

has been suspended between October 2014 and August 2015 by the

Serbian authorities. The handling of over 600 pending cases has resumed in September 2015.

On regional cooperation, Kosovo became a permanent participant in RACVIAC (the Centre

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for Security Cooperation) and joined MARRI (Migration, Asylum, Refugees Regional

Initiative). However, Serbia needs to remain committed to the continued implementation of

the agreement on representation and participation of Kosovo in

regional forums.

Serbia and Kosovo also participated in constructive discussions to improve cooperation in

tackling migratory flows from Kosovo early this year.

Overall, Serbia and Kosovo have remained engaged in the dialogue and committed to the

implementation of the April 2013 'First agreement of principles governing the normalisation

of relations' and other agreements reached in the dialogue. The steps taken gave fresh

momentum in the normalisation of relations and should have a positive and concrete impact

on the everyday life of citizens in both Kosovo and Serbia. Further progress in this area

remains essential for advancing the European future of both Serbia and Kosovo.

ECONOMIC CRITERIA

2013

N/A

3.4

30 (38.8; 26.9)

46.4 (23.7; 69.5)

-6.4

4.5

2014

N/A

0.9

35.3 (41.6; 33.1)

47.7 (24.2; 71.4)

-8

2.3

Key economic figures

Gross domestic product per capita (% of EU28 in PPS)

GDP growth (%)

Unemployment rate (female; male) (%)

Economic activity rate for persons aged 20–64:

proportion of the population aged 20–64 that is

economically active (female; male) (%)

Current account balance (% of GDP)

Foreign direct investment (FDI) (% of GDP)

Source: Eurostat

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.

The monitoring of these economic criteria should be seen in the context of the increased

importance of economic governance in the enlargement process. In order to improve their

economic governance, in 2015 the enlargement countries were asked to prepare Economic

Reform Programmes (ERPs), which set out a medium-term macro-fiscal policy framework

together with key structural reforms aimed at supporting the framework and boosting

competitiveness. The ERPs were the basis for country-specific recommendations jointly

adopted by the EU and the Western Balkans and Turkey in the Economic and Financial

Dialogue meeting on 12 May 2015.

4.1.

The existence of a functioning market economy

Kosovo is at

an early stage in developing a functioning market economy.

The pursuit of

economic reforms received a new momentum after the post-election impasse.

Some progress

was made, particularly on facilitating business creation, improving the legal system and on

financial sector stability. The persistent trade deficit reflects a weak production base and lack

of international competitiveness. An inefficient public sector and ad hoc fiscal policy

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decision-making constitute significant fiscal risks. Reliance on remittances and widespread

informal economy additionally decrease employment incentives resulting in low labour force

participation, especially among women, high unemployment rates, in particular among young

and unskilled workers. Kosovo should reduce reliance on customs duties by broadening

domestic tax base and modernising revenue collection.

In line with the ERP recommendations and in order to support long-term growth, in the

coming year Kosovo should pay particular attention to:

→

ensuring fiscal sustainability;

→

speeding up the privatisation and restructuring of publicly owned enterprises;

→

improving bankruptcy and insolvency procedures.

Economic policy essentials

The government's strategic documents show a strengthened commitment to pursuing

economic reforms. This should be translated into determined policy implementation and

an avoidance of ad hoc decision-making in economic policy.

The 2014 post-election

political impasse delayed the pursuit of sound economic policies, including the adoption of

the 2015 government budget.

Kosovo submitted its first Economic

commitment to fiscal discipline and improve

Reform Programme (ERP) to the

transparency of public finances by considering

Commission in January 2015. Together

establishing an independent fiscal council, or fiscal

with the new government programme, the

agency, with a clear mandate to preserve

ERP reflects a clear commitment to

sustainability of public finances, and reduce deficit

pursuing a stable fiscal policy and

bias, and by better coordination between

structural reforms to boost competitiveness.

government and parliamentary bodies responsible

Following the joint adoption of the ERP

for budgetary processes. Improve the budget

recommendations, the Kosovo government

process by legislatively strengthening the role of

has started launching ERP-based reforms.

the Medium Term Expenditure Framework and

A new EUR 184 million 22-month stand-

enshrine principles of cost-benefit analysis as the

basis of the policy planning process. Take steps to

by programme with the IMF has been

increase government deposits to the threshold

approved in July 2015. The programme

implied by the fiscal rule (4.5 % of GDP) to

aims at strengthening the credibility of

provide additional financing buffer."

public finances, in line with ERP

recommendation 1, further enhancing financial stability and boosting competiveness and

productive capacity.

Macroeconomic stability

ERP

recommendation

"Sustain

the

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The macroeconomic situation remained

stable but challenging, having been hit by

the political uncertainties in 2014.

Preliminary data shows that economic growth

in 2014 dropped to 0.9 %, below the ten-year

average of 3.5 %, as a result of political

impasse which caused delays in capital

investments. Economic growth was mainly

driven by private consumption (1.2pp

contribution to growth) resulting from higher

remittances and increased pensions and wages

in the public sector. Net exports continued to

weigh on GDP growth (-1 pp). Production

capacity is poorly developed. Trade and real estate activities continued to positively influence

growth while construction contracted. Preliminary results for Q1 2015 show further growth

slowdown, possibly influenced by the migration outflows at the beginning of the year.

External imbalances worsened slightly in

2014, despite the continued economic

recovery in Kosovo's main trading partners

and diaspora countries.

In 2014 the current

account deficit increased to 8 % of GDP, after

having fallen since 2011. This increase

resulted from weaker transfers to the

government from abroad caused by delays in

ongoing projects due to the political impasse.

Growing remittances (12.6 % of GDP in

2014) continued to offset the traditionally

high trade deficit (31.6 % of GDP in 2014).

The inflow of foreign direct investment (FDI)

amounted to 2.6 % of GDP, the lowest in the

last ten years, which averaged 6.7 % of GDP. The bulk of financial inflows was informal and

unrecorded (5 % of GDP). Kosovo's external debt remained relatively low at 31.6 % of GDP

in 2014 and is not a cause for immediate concern.

Employment is extremely low and efforts to improve labour market conditions have

been limited.

Moderate economic growth over recent years has not translated into a better

performance by the labour market. Kosovo has the lowest employment and activity rates in

Europe (26.9 % and 41.6 % respectively); this is due to a weak production base and low

competitiveness in human capital and labour costs. Reliance on remittances and widespread

informal economy additionally decrease employment incentives.

The unemployment rate increased to 35.3 % in 2014 from 30 % in 2013. Labour market

conditions are especially difficult for women. Only one in five women of working age were

active in the labour market and only one in eight were employed. Limited job opportunities,

especially for young people (61 % youth unemployment), are also putting a strain on social

cohesion and encouraging emigration. Financing for active labour market policies remains

fragmented and insufficient. Labour market statistics have remained inadequate and more

harmonised data is needed in order for Kosovo to be able to make informed policy choices.

ERP Recommendation 2:

"Address immediate

fiscal risks with necessary measures aimed at

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Inflation is mainly dependent on import

prices, specifically food and energy

prices.

The consumer price index inflation

in Kosovo has been on a downward trend

since 2011, reaching 0.4 % on average in

2014 and declining further to -0.7 % by

July 2015.

The execution of the 2014 budget was

characterised by lower-than-expected

revenues and ad hoc pre-election

spending increases.

The 2014 budget was

the first budget to be subject to the new 2

% of GDP deficit fiscal rule. As a result of the April 2014 government increase in salaries,

pensions and benefits, current expenditures accounted for a higher proportion of total

spending at 71.3 % in 2014 compared with 63.5 % in 2013. In addition, the caretaker

government committed roughly 32 % of the overall capital spending in the next four years to

highway construction, thus further limiting fiscal space in the following years. Overall

expenditure underperformed by 11 % compared to the plan. This decrease was due to delays

in public investments.

Budget revenues underperformed by 12 %; this

is due to lower-than-expected growth and the

postponement of some one-off transfers. Kosovo

needs to take further measures to improve

revenue collection in line with ERP

recommendation 3. The overall fiscal deficit

stood at 2.5 % of GDP, higher than the fiscal

rule threshold of 2 %. Considering however the

exceptions allowed by the rule, the 2014 budget

can be considered to be in conformity with it.

The breach of fiscal rule was in any case only

avoided due to under execution of capital

spending.

Total public debt continued to increase,

reaching 10.6 % in 2014. An increasing

ERP Recommendation 3:

"Modernize revenue

proportion of this comes from domestically

collection to reduce reliance on customs receipts by

improving

property

tax

collection

and

issued treasury bills. Kosovo has a

strengthening the legal framework for collection of

relatively low level of public debt.

tax and municipal tax arrears. Revisit local

However, given its reliance on short-term

government grant financing scheme to incentivise

domestic financing and loans from

better collection of municipal revenues. Further

international financing institutions and its

broaden tax base by introducing the planned

inability, in the absence of a credit rating,

mandatory health sector contributions, and reassess

to issue international debt, prudent fiscal

planned tax exemptions."

policy is crucial for Kosovo. Government

deposits, maintained as an emergency source of financing, fell steadily to 1.8 % of GDP at the

end of 2014, substantially below the 4.5 % threshold suggested by the fiscal rule.

Due to the post-electoral political deadlock, the 2015 budget was adopted only in December

2014 and it was based on overly optimistic revenue projections (18.3 % rise compared to

2014 budget execution). In the July mid-term budgetary review both revenue and expenditure

targets were adjusted, now standing, still ambitiously, 14.1 % and 11.5 % higher than the

reducing unsustainably high current expenditures

while preserving growth enhancing capital

spending. Develop a legal framework for

maintaining a sustainable public wage bill and

strengthen targeting and means testing of transfers.

Ensure planned increases in agricultural subsidies

are directed exclusively at productivity increasing

initiatives. Advance public administration reform

with special attention on improving productivity

and reducing costs. Take further steps in

strengthening

public

finance

management

practices."

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2014 budget execution. By July 2015, revenues grew by 9.3 % compared to the same period

in 2014 thus lagging behind the plan. To increase revenue, the government has introduced

changes to excise duties and the VAT system applicable from 1 September 2015.

Successful reforms in the customs administration directed at better goods evaluation and

fighting smuggling yielded a 7.4 % increase in border revenues compared to the first seven

months in 2014. Spending is also lagging behind the budget plan, again mainly due to

underperformance of capital spending. Without further improvements in revenue collection or

additional expenditure cuts, satisfying both the fiscal rule deficit and capital spending targets

will be difficult.

The fiscal rule and the law on public finance form the backbone of public finance

management in Kosovo. However, their enforcement and monitoring mechanisms need to be

improved. Repeated ad hoc fiscal decision-making, with a large fiscal impact is the main risk

to fiscal sustainability. Budget planning procedures have not been transparent and coordinated

so far, and budget spending programmes are not joined up with the government's long term

priorities. The launch of a central procurement system and better checks on contracting

procedures at the local level are welcome steps, but more needs to be done to meet ERP

recommendation 2.

Interplay of market forces

Overall, very limited progress was

achieved in the privatisation and

ERP Recommendation 4: "Advance

restructuring

liquidation

publicly

owned

and restart the privatisation of non-essential

enterprises.

No new privatisations took

Publicly Owned Enterprises (POEs). Take steps to

place. The privatisation agency remained

improve the efficiency and corporate governance of

dysfunctional and its credibility was further

strategic POEs. Address the lack of quorum of the

tarnished amid political controversy and

board of Privatisation Agency of Kosovo (PAK)

corruption allegations. The privatisation

and accelerate privatisation of Socially Owned

agency still does not have a new, credible,

Enterprises still in PAK's portfolio."

independent and functioning board; its

merit-based management selection procedures and anti-corruption mechanisms need to be

strengthened in line with ERP recommendation 4. The unresolved status of property rights

and lengthy legal proceedings in dealing with financial claims on privatised assets hinder the

privatisation process and delay disbursement of privatisation revenue held at the central bank.

Among centrally-managed enterprises, only two, the Kosovo Energy Corporation and Post

and Telecommunications Kosovo, continued to generate a profit in 2014. Government

influence on price controls for utilities and postal and telecommunications services has

continued.

Market entry and exit

Some progress was made in simplifying

ERP Recommendation 5:

"Address the

underlying causes for high costs of bank-based

business registration, but insolvency

financing, reduce the duration and cost of

procedures still present an obstacle.

The

insolvency procedures by adopting the new

establishment of one-stop shops in 2014

bankruptcy law and further improve contract

has reduced the time needed for company

enforcement with a view to increase overall

registration down to three days. However,

financial intermediation in the economy."

the announced online registration has still

not been fully implemented. Numerous obstacles to market entry remain: a weak and

unaccountable administration; insufficient access to finance; an underdeveloped infrastructure

(especially in electricity supply); a deficient rule of law; extortion practices; a widespread

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informal economy; and insufficient academic and professional/vocational education. Weak

insolvency procedures still hinder market exit and delay payments to creditors. A draft law on

bankruptcy needs to be approved in line with ERP recommendation 5.

Legal system

Despite some progress made on the legal rules governing business, their implementation

has remained insufficient.

Very weak institutional capacity for legal enforcement combined

with widespread corruption continued to hinder the business environment. The judicial system

suffers from poor accessibility, inefficiency, delays and a growing backlog of unresolved

cases (400 000 in July 2015). The politically influenced appointments of judges and

prosecutors limit the independence of the judiciary. More work is needed on reviewing the

civil code on business lawsuits and practices and on developing register (cadastre) databases,

in line with ERP recommendation 8.

Financial sector development

Financial sector stability was maintained and credit growth picked up pace.

The steady

credit growth in Kosovo's banking sector rebounded in 2014 (4.2 % increase) and continued

to grow in 2015. Kosovo's financial system remains dominated by the banking sector (69.5 %

of the total financial sector assets). The stability of the banking sector was strengthened, with

the proportion of non-performing loans fully covered by bank provisions falling to 7.1 %

(July 2015). Private loan enforcement agents established at end 2014 contributed to the NPL

decline. The improved profitability of banks in 2014 (131.1 % rise in profits) further

strengthened their capital buffers to 19 %, which is substantially above regulatory

requirements. Although total lending grew, a still relatively low loan-to-deposits ratio (74.3

%) means that there is ample room for stronger banking activity. Average loan interest rates

fell below 10 % for the first time, but have remained above the regional average.

The insurance sector is dominated by non-life insurance companies. The cost of car insurance

is artificially high, due in part to Kosovo not being a member of the 'green card' system, but

also to it not having fully liberalised third party liability insurance prices.

The Central Bank of Kosovo continued to improve the SWIFT infrastructure for international

payments which is accessible and used by all banks. Since February 2015, banks in Kosovo

have been using IBAN for international payments.

4.2.

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

Union

Kosovo is

at an early stage in achieving the capacity to cope with competitive pressures

and market forces within the Union. No progress

was made on improving the quality of

education, which is a key driver for improving long-term growth and competitiveness.

In line with the ERP recommendations and in order to support long-term growth, in the

coming year Kosovo should pay particular attention to:

→

securing a stable energy supply and reducing distribution losses;

→

closing the skills gap in the labour market;

→

channelling foreign direct investments and remittances into productive sectors.

Human and physical capital

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No progress was made in improving the quality of education.

Increases in public spending

on education (up to 4.4 % of GDP in 2014

with 4.6 % planned for 2015) have so far

ERP Recommendation 7: "Improve

the quality of

been used almost entirely to cover salary

education by continuing to roll out teacher

increases. More funding should be directed

licencing and training as well as improving quality

to other aspects of education reform, as

assurance and strengthening related incentives;

referenced in ERP recommendation 7. The

improve access to pre-primary and primary school

establishment of the Agency for Vocational

education; accelerate modernisation of vocational

Education and Training and Adult

education, continue improve quality of higher

Education (VET) should help to address

education and improve focus on aligning the

the evident skills mismatch in the labour

education system so as to make it more responsive

to the labour market. Assure the timely

market.

Nevertheless, the unemployment rate

among vocational graduates is 71 %.

Insufficient funding, a low level of

cooperation between vocational schools and businesses and delays in implementing policies

remain major concerns.

operationalisation of the recently established Public

Employment Service and its effectiveness in

lowering the high unemployment rate."

Kosovo made some progress on improving physical capital, but road investments clearly

dominate over energy efficiency and water distribution.

In 2014, total investment

continued to fall, reaching 26.2 % of GDP. Government capital spending agenda is dominated

with road building, namely the construction of the Route 6 highway to Skopje. ERP

recommendation 6 deals with ways of improving the assessment of major infrastructure

projects.

Lack of reliable energy supply is still seen

as one of the biggest obstacles to

investment growth. Investments in the

electricity network have improved network

stability and reduced technical losses.

Construction has started on the new 400kV

transmission interconnector to Albania and

the district heating project at the Kosovo B

power plant. Negotiations with the only

bidder for the construction of the new

modern power plant are stalled.

ERP

Recommendation

"Strengthen

government oversight and consider setting up an

advisory body to contribute to the assessment of

future major infrastructure projects, including their

fiscal impact and make sure they align with the

regional agenda on connectivity (core network).

Advance towards securing a reliable energy supply

while ensuring the compliance with the EU

environmental standards in the production of

energy."

Almost all incoming foreign direct investment went to the non-tradable sector, in particular

real estate and financial intermediation. However, a EUR 409 million contract for investment

in the Brezovica ski resort was signed in April. Work is due to start in the following months

and is expected to provide around 3 000 new jobs.

Sectoral and enterprise structure

ERP Recommendation 8:

"Continue to improve

the business environment and continue with the

clearing of court backlogs, strengthening capacities

of judicial system, and developing cadastre

databases. Advance measures to tackle informality

in line with the strategy for the prevention and fight

against informal economy, including incentives to

reduce undeclared work. Reduce the administrative

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Kosovo’s private sector continues to be

burden for business by implementing the Better

fragmented and unable to benefit from

Regulation Strategy and the Law on Permits and

efficiency gains, as micro-, small- and

Licences. Develop measures to provide targeted

medium-sized enterprises account for

support for SMEs and to widen their access to

99 % of total employment.

Although still

finance. Step up the fight against corruption and

efforts to improve public procurement, by

above its regional peers, the share of

enhancing administrative capacity, increasing

agriculture in Kosovo’s GDP fell to

efficiency and effectiveness of the Public Review

11.4 %, compared with 14.1 % in 2009,

Board, and implementing central procurement."

while the share of services rose from 47 %

to 49.2 % of GDP. Shifts in the employment structure away from agriculture and towards

services are evident. This is in line with expected developments as part of Kosovo’s transition

towards a modern services-oriented economy.

The structure of operating enterprises is dominated by trade (29.9 % of operating enterprises),

followed by accommodation and food services (11 %) and industry (10.4 %, up from 5.2 % in

2013). Productivity gains are limited by poor access to broader markets and a lack of

investments in new technologies. Kosovo should improve its business environment, in line

with ERP recommendation 8.

State influence on competitiveness

There was no progress on developing institutional capacity to check state aid and

subsidies are still being provided without a proper strategy and evaluation.

Publicly

owned enterprises in the energy, transport and waste/water sectors continued to be subsidised.

New subsidies and direct payments to agriculture were introduced. These need to be more

closely linked to increasing productivity. Tax and customs exemptions were introduced for

certain sectors (agriculture, IT), but without a clear impact assessment.

The authorities continued to establish economic zones and industrial parks. However, this was

done without a national plan (which was a legal requirement) and without transparent

disclosure of tax and customs incentives approved to companies.

Economic integration with the EU

The EU is Kosovo’s biggest trade and investment partner. However, Kosovo’s export

capacity remains limited.

Kosovo’s economy is still relatively unintegrated in global trade

flows, with a trade openness of 71.1 % of GDP. However, the value of Kosovo’s goods trade

with the EU has been rising continuously since 2008, standing at 41.2 % of overall trade in

2014.

In spite of that increase, Kosovo’s total trade volume with the EU remains very limited (EUR

98.08 million in exports and EUR 1.08 billion in imports in 2014), reflecting the low

competitiveness of its products and other structural obstacles hindering this potential. The

Central European Free Trade Agreement (CEFTA) countries remained Kosovo’s second

largest trade partner (29.6 % of total trade).

ERP Recommendation 9:

"Facilitate trade by

amending the Customs Code and adopting new

legislation on customs enforcement of IPR."

ERP Recommendation 10:

"Adopt a holistic

approach to Foreign Direct Investment that anchors

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EU countries are the biggest foreign

supportive policies in a strategic framework and

investors in Kosovo (35 % of overall

focus on removing existing obstacles. Increase

investment). The planned entry into force

investor protection by developing an investor after-

of Kosovo’s Stabilisation and Association

care program and establish an investor grievance

Agreement with the EU is expected to

mechanism."

further incentivise economic ties with the

EU countries. Kosovo will, however, need to continue with reforms in order to facilitate trade

and foreign direct investment, in line with ERP recommendations 9 and 10.

5.1.

EUROPEAN STANDARDS

Internal market

5.1.1. Free movement of goods

Kosovo is at an

early stage of preparation

in the area of free movement of goods.

Some

progress

was made in the last year. In the coming year, Kosovo should in particular:

→

improve inter-institutional coordination to ensure that legislation is enforced;

→

further improve quality infrastructure, strengthen market surveillance capacity and increase

consumers’ awareness of their rights.

The Ministry of Trade and Industry (MTI) has made gradual progress in implementing the

strategy on free movement of goods that it adopted in February 2013.

horizontal measures,

as regards

standardisation,

1 064 European standards have been

adopted as a standard reference in the reporting period. The cooperation agreement concluded

with the Albanian Standards Body is the way for Kosovo to adopt European standards.

Kosovo’s Standards Agency needs to be consolidated as an institution, and expand the online

sales of standards (e-Commerce function).

In 2014 Kosovo adopted several regulations and administrative instructions, to put in place a

system of

conformity

assessment. The MTI also authorised several conformity assessment

bodies. Harmonisation with EU rules and the use and enforcement of conformity assessment

needs to be strengthened.

As regards

accreditation,

in November 2014 the General Accreditation Directorate was the

subject of a full European Cooperation for Accreditation peer evaluation. This is a crucial step

towards the signing of the European multilateral agreement for accreditation of test

laboratories. The recommendations are being implemented.

metrology,

the Agency for Metrology still lacks capacity. The laboratories for time,

frequency, length and force are not operational due to lack of equipment. Kosovo is fully

aligned with the Directive on Non-Automatic Weighing Instruments. Since 2014, laboratory

activities have increased in the areas of mass, flow and volume, electrical measurement,

precious metals and thermometry. The quality system imposed by the applicable ISO

standards must be implemented and awareness-raising improved. In general, the laboratories’

operational capacity needs to increase to meet the necessary quality standards.

market surveillance,

market inspectorates carried out 1622 inspections resulting in 145

corrective measures (fines and confiscations). A Regulation on Establishment and

Functioning of the Rapid Exchange of Information System on Dangerous Products is at a very

early stage of implementation. Communication and coordination mechanisms between those

responsible for market surveillance need to be improved and enforcement strengthened.

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As regards

consumer protection,

further efforts are needed. While a number of awareness-

raising activities have been carried out, people are not sufficiently aware of their rights as

consumers. Between September 2014 and September 2015 307 consumer complaints were

submitted to the Department of Consumer Protection; 125 were resolved in favour of the

consumer, 110 were found ungrounded and 72 have not yet been reviewed.

Some administrative instructions were adopted on the classification, labelling and packaging

of chemicals. There is no evidence on alignment with the Registration, Evaluation,

Authorisation and Restriction of Chemicals (REACH) Regulation yet.

5.1.2. Movement of persons, services and right of establishment

Kosovo is at an

early stage

of preparation in the free movement of persons, services and the

right of establishment.

Some progress

was made, particularly on financial services. Thorough

and transparent auditing and accounting are crucial for the development of a sound financial

services market and the economy at large, especially small and medium-sized enterprises

(SMEs). In the coming year, Kosovo should in particular:

→

further align the law with the EU services and professional qualifications directives;

→

further harmonise existing regulations and procedures with EU practice, particularly in the

area of corporate accounting and auditing.

As regards the

movement of persons,

no new agreements were concluded on the movement

of workers and the coordination of social security systems.

freedom to provide services,

Kosovo is at an early stage of alignment with the services

directive. A database on trade in services has been set up in the MTI to support ongoing trade

negotiations on services liberalisation within the Central European Free Trade Area.

postal services,

Kosovo has to a large extent aligned its legislation with the

acquis.

However, universal service delivery is hindered by political difficulties in Serb-majority

municipalities. In spite of some reductions in the weight limit for reserved services in

previous years, these are still not in line with the

acquis.

International postal services are

provided to all postal administrations except Serbia, due to lack of an agreement.

mutual recognition of professional qualifications,

alignment with the

acquis

is at an

early stage. A Kosovo-wide framework on regulated professions still needs to be adopted.

Kosovo should step up its efforts to align legislation with the services directive and the

professional qualifications directive. To do this, Kosovo should draft a list of minimum

training requirements for regulated professions to be included in its legislation and an action

plan for harmonising professional qualifications legislation with the

acquis.

The Central Bank of Kosovo continued to review existing

financial services

legislation,

including laws on insurance, micro-finance institutions and non-banking financial institutions.

Alignment of these laws with the

acquis

needs to be ensured. Kosovo is still not part of the

‘green card’ system so additional vehicle insurance is required for most foreign vehicles

entering Kosovo. Under the future Stabilisation and Association Agreement (SAA), Kosovo

must ensure development of the insurance sector based on fair competition practices and a

level playing field. Amendments to the current banking regulations on mortgage loans, on real

estate appraisal and on capital adequacy were adopted in February 2015, further but not fully

aligning with the

acquis.

The standardised approach to credit risk and the basic indicator and

standardised approach for operational risk according to Pillar I of the Basel II Regulatory

Framework are in force. The central bank is working on further adoption of Basel capital

standards and the capital requirements directive and capital requirements regulation. The

financial services market remains at an early stage of development.

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company law,

some administrative measures were adopted in July 2015, providing a basis

for the reduction of business registration fees. The law outlining the role and responsibilities

of the Kosovo Business Registration Agency has still not been adopted.

As regards

corporate accounting and auditing,

an amendment to the draft law on

accounting, financial reporting and audit still needs to be adopted. The capacity of the

institutional audit oversight structures needs to be strengthened considerably; enforcement

remains weak and substantial efforts are needed to ensure the development of reliable and

efficient financial reporting, in line with EU practice. Kosovo still needs to align its rules with

international accounting and financial reporting standards.

5.1.3. Free movement of capital

There is

some level of preparation

in this area.

Some progress

was made on free movement

of capital. Capital movements remain largely free, with no restrictions on foreign ownership

or investment in the financial sector, and the central bank’s capacity to supervise the sector

remains sufficient.

Movement of capital

remains largely free in Kosovo. The draft law on general insurance,

covering such issues as minimum capital requirements, solvency requirements and other

issues related to proper risk-based supervision requirements for insurance companies still

needs to be adopted. Increased efforts are needed to achieve tangible results in the fight

against economic and financial crime.

There was limited progress on the issue of acquisition of real estate, including the purchase of

land, by foreign citizens. Provisions in the relevant laws, implementing acts and

administrative practices are still an obstacle to equal treatment. Other difficulties, e.g. in

registering property, need to be addressed.

As regards the

payment system,

regulations on issues including payment instrument

statistics, the bank account standards numbering system and international payments were

approved in 2014. The Central Bank of Kosovo continued to reinforce supervision of payment

systems and improve the SWIFT infrastructure for international payments, following its

connection to SWIFT in December 2013. In February, Kosovo started using the International

Bank Account Number (IBAN) system for international payments. Further efforts are needed

to continue alignment with the

acquis

in payment services.

5.1.4. Customs and taxation

Kosovo is

moderately prepared

in the area of customs and at an

early stage

in taxation, with

some progress

made in both areas. It took some initial steps towards merging the customs

and tax administrations and upgrading internal controls. Customs legislation is largely

compliant with the EU’s customs code. In the coming year, Kosovo should in particular:

→

implement customs legislation in line with EU practice;

→

strengthen the Kosovo tax administration’s internal IT platform, its internal performance

controls and the fight against corruption;

→

step up the fight against the informal economy and tax evasion and prevent any undue

influence on the work of their institutions.

The

customs

service has further improved its legislative, administrative and organisational

capacity. The first steps towards merging the customs and tax administrations into a single

revenue agency have been taken. Despite an overall fall in imports, the 2014 reorganisation of

the customs administration resulted in an increase of 3.9 % in the collection of revenues

compared with 2013 and new systems reduced the scope for corruption. The merger of

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investigation units also brought positive results. Kosovo Customs operate throughout Kosovo,

although to a limited extent in the north. In 2015, Kosovo applied to join the Common Transit

Convention and signed bilateral agreements with Albania on trade facilitation, including

common transit, and on cooperation in criminal customs matters with the United Kingdom.

The exchange of pre-arrival electronic information with regional customs administrations is

working well. Nevertheless, inconsistencies between the customs and excise code and the

criminal code continue to hinder the fight against customs crime. The informal economy and

smuggling across the border/boundary lines continue to harm the economy. Following an

agreement in the Pristina-Belgrade dialogue, two new co-located crossing points have been

agreed.

taxation,

Kosovo has started to implement the 2014-2018 strategy and action plan for

preventing and combating the informal economy, money laundering and financing of

terrorism. The tax administration has continued to improve its human and administrative

capacity. Progress has been made in introducing electronic services including online tax

returns, verification and payment system and business registration centres (one-stop shop).

There was no progress in modernising the administration’s internal IT platform and its

procedures. The capacity to enforce tax collection in northern Kosovo remains extremely

limited. The existing backlog of complaints against the customs and tax administrations was

finally dealt with and, as a result, the Independent Review Board dealing with such cases was

abolished in December 2014.

5.1.5. Competition

Kosovo is at an

early stage

in the area of competition. There was

no progress

in this field as

the Kosovo Competition Authority (KCA) faced substantial challenges to its investigative and

decision-making capacity. In the coming year, Kosovo should in particular:

→

ensure that pending appointments are made to the Kosovo Competition Commission

(KCC), that staffing, facilities and training for the KCA are appropriate, and that enforcement

restarts as soon as possible;

→

approve the amendments to state aid legislation and start to enforce it without delay.

As regards

antitrust and mergers policy,

secondary legislation to implement changes to the

February 2014 law on the protection of competition is still lacking.

The KCA is still not operational, lacking a quorum since November 2013 due to delays in

replacing five members of the KCC whose terms of office had ended. The KCA has thus not

been able to carry out its duties as new investigations have to be approved by the KCC board,

and very little enforcement is taking place. Instead, it has concentrated on advocacy and

providing opinions on other bodies’ initiatives. Although the budget has been approved, the

KCA still lacks staff and adequate premises, internal controls and information systems.

Cooperation between the KCA and other regulatory authorities needs to be strengthened.

The current law on

state aid

requires further amendment to bring it into line with European

standards, in particular to ensure the independence and impartiality of the State Aid

Commission. The activities of the State Aid Office were limited to the distribution of

notification forms to potential aid granters. The Office, currently established as a department

of the KCA, is understaffed and does not have the capacity to screen existing aid schemes.

5.1.6. Public procurement

Kosovo is at an

early stage

in this area. Effective implementation remains a major challenge

and procurement is particularly vulnerable to corruption.

Some progress

was achieved,

especially in enforcement of a centralised public procurement system. However, considerable

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efforts are still needed to use public procurement efficiently. It remains essential to

professionalise and de-politicise the system and make it transparent and accountable,

including the appointment of senior management. In the coming year, Kosovo should pay

particular attention to:

→

strengthening the capacity and ensuring the proper functioning of public procurement

bodies, in particular through the timely appointment of competent members of boards;

→

further aligning public procurement legislation with the

acquis;

→

improving implementation of public procurement processes through enhanced use of

competitive tender procedures, centralised purchasing, and development of e-procurement.

Institutional set-up and legal alignment

Kosovo’s

legal framework

is largely in line with the

acquis

and other public procurement

principles, but does not cover all areas. The law on public procurement is broadly aligned

with the directives on classical procurement and to some extent on utilities. The law on

concessions and public-private partnerships is largely compatible with EU legislation.

However, rules on defence and sensitive security procurement have yet to be drafted and the

law on public procurement still gives preference to domestic bidders.

In 2014, Kosovo developed a

strategy

and action plan for the years 2015-2020 for the

development of the public procurement system which has not yet been approved by the

government.

The

public procurement administration

in Kosovo is in place and consists of three main

bodies: the Public Procurement Regulatory Commission (PPRC), responsible for the overall

development, operation and supervision of the public procurement system; the Procurement

Review Body (PRB), an independent administrative review body examining all allegations of

breaches of the public procurement law; and the Central Procurement Agency (CPA), in

charge of central and coordinated purchases. Concerns remain about capacity limitations,

corruption investigations and the process of appointments to the board of the PRB. Only three

of the five members of the PRB board are in place, which seriously restricts its activities,

including reviews of high value and complex procurement. Implementation capacity needs to

be strengthened at all levels to ensure enforcement.

Implementation and enforcement capacity

The

public procurement market

stood at 8.9 % of gross domestic product (GDP) in 2014, a

slight decline over the last three years. In 2014, 11 362 contracts for a total value of close to

EUR 389 million were awarded. Of these, almost 73 % were awarded using an open

procedure, a significant 17 % decrease. High value contracts account for 63 % of all contracts

and the average number of bids per tender increased to 6.1 in 2014, compared with 5.2.

Effective implementation and enforcement is a major challenge, largely due to weak planning

and corruption. Almost 30 % of contract notices were cancelled, pointing to a need to improve

procurement planning. Risks and shortcomings exist at all stages of public procurement. The

legal provisions on evaluating contract performance, the effectiveness and efficiency of public

procurement proceedings, and contract management are in place, but implementation capacity

needs to be reinforced. Ways and means to increase value for money should be explored.

Some important steps have been taken to enforce a centralised system of procurement. In

February 2015, a list of common items, including six categories that must be procured

centrally, was approved for the first time since the CPA’s establishment.

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Monitoring

of public procurement is insufficient. The

ex post

monitoring performed by the

PPRC is still confined to non-systematic, occasional checks of completed procurement

contracts. Only a small share of concluded procurement contracts is monitored. Last year, the

PPRC started

ex ante

monitoring of contract notices sent by contracting authorities for

publication, a positive contribution to preventing irregularities which should be expanded.

A central public procurement portal is in place. To increase transparency and promote

efficiency in public procurement, the websites of all public procurement institutions need to

be improved and the procurement plans of public bodies could be published. Kosovo plans to

introduce e-procurement and is currently developing information and communications

technology infrastructure and a contract management information system, with support by

international donors. Appropriate sequencing of the steps, including the necessary legislative

amendments and capacity building, needs to be determined and implemented.

As regards the authorities’

capacity to manage public procurement,

the law provides for

obligatory training for public procurement officers. Training courses and exams are offered by

the Kosovo Institute of Public Administration with the involvement of the PPRC. However,

the certification system and capacity to manage public procurement still needs to improve.

There is a lack of rules on

integrity and conflicts of interest,

insufficient enforcement to

identify and address corrupt and fraudulent practices, and lack of a risk indicator system. The

perception of corruption in public procurement remains prevalent in Kosovo. There are

statutory disciplinary procedures but concerns about their implementation remain. The

integrity of and cooperation between all public procurement bodies need to be strengthened.

Efficient remedies system

The

right to legal remedy

is stipulated in the laws on public procurement and concessions.

The public procurement law is in line with the

acquis

provisions on contract annulment and

penalties, although in practice this is not frequently used. On remedies, in 2014, the PRB

received and processed 537 appeals. Of these, 161 cases were returned for re-evaluation,

while in 104 cases the review panel decided to cancel procurement. The highest proportion of

irregularities continues to be in the evaluation of bids and irregularities in tender dossiers.

implementation capacity,

the PRB is understaffed and the quality and transparency of its

decisions leaves room for improvement. Discrepancies between expert review assessments

and actual decisions undermine stakeholders’ trust in the system. Cooperation between

different institutions in this field, notably between public procurement, anti-corruption, audit

and other law enforcement bodies needs to be enhanced.

5.1.7. Intellectual property law

Kosovo has

some level of preparation

in this area.

Some progress

was made in the area of

intellectual property rights. In the coming year, Kosovo should in particular:

→

develop a legislative framework to implement obligations under the future SAA;

→

step up efforts to ensure the enforcement of intellectual property rights;

→

appoint the director and address the existing backlog of applications at the Industrial

Property Agency.

the Law on Copyright and Related Rights was

amended and further aligned with the

acquis.

It now requires implementing provisions on

private copy schemes and digital piracy, which are essential for enforcement. The task force

against piracy and counterfeiting set up by the government has continued with awareness-

raising. It seized several thousand counterfeit goods and brought several criminal cases to

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court. The process for negotiating fees between collective management organisations and

broadcasters was re-launched in 2015 but no agreement has been reached yet.

industrial property rights,

amendments to the laws on patents and trademarks were

adopted in August 2015, further aligning them with the

acquis.

The Industrial Property

Agency’s administrative capacity was strengthened by allocating and training some

permanent and temporary staff. However, the director of the agency still needs to be

appointed. There is still a backlog of industrial property rights applications although there has

been progress in the processing thereof. The Intellectual Property Council met in March 2015,

but cooperation between institutions and law enforcement still needs to improve. Kosovo also

needs to increase awareness among holders and users of intellectual property rights.

As regards

enforcement,

Kosovo Customs has carried out operations against goods that

breach intellectual property rights, many in response to requests by rights holders. In 2014,

the total number of interventions by Kosovo Customs stood at 304, and the value of goods

seized at EUR 4.7 million; 280 of these interventions were based on responses to requests for

action by rights holders. However, greater efforts are needed to ensure enforcement, including

accessible and effective legal measures that can be undertaken by rights holders and greater

administrative coordination between the institutions involved. The police still do not have a

unit specialised in intellectual property rights. The draft law on customs measures still needs

to be adopted and aligned with the relevant EU regulation.

5.1.8. Employment and social policies, public health policy

Kosovo is at an

early stage

of preparation in this area. There has been

no progress

employment, social and health policies. In the coming year, Kosovo should in particular:

→

implement the 2014-2020 employment sector strategy, monitor the results and ensure that

the new employment agency becomes operational;

→

enforce the law on labour and legislation on health and safety at work. Implement

inspection legislation and provide the Labour inspectorate with appropriate resources to fulfil

its mandate.

employment policy,

the 2014-2020 employment sector strategy is in place, but

implementation is lagging, pending adoption of the action plan and the allocation of funding.

Data from the labour force survey for 2014 show that unemployment increased to 35.5 %

compared to 30 % in 2013. Labour market participation has seen a slight increase but remains

very low at 41.6 % (40.5 % in 2013). Labour force participation and employment rates for

women remained unchanged between 2013 and 2014 at around 21 % and 12.5 %. Informal

employment remains high. There was also an increase in the number of long-term

unemployed, from 68.9 % in 2013 to 73.8 % in 2014. Youth unemployment increased from

55.9 % to 61.0 %. The share of young people (between 15-24), who are not employed, not in

education and not in training, fell from 35.3 % in 2013 to 30.2 % in 2014.

The Public Employment Service helped to find jobs for 3 % of registered jobseekers and

organised training for 2.5 % of registered jobseekers, of which 38 % were women. The budget

allocated for active labour market measures for 2015 has increased by 224 %. However, the

funding for employment services and training and re-training remains insufficient and

fragmented across several entities. The lack of funding prevents the implementation of the

announced plan to merge services in the new employment agency.

social policies,

Kosovo still needs to amend the

labour law

to align it with the

acquis

(e.g. employment contracts, working hours) and implementation remains unsatisfactory.

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Effective implementation of the law on

health and safety at work

is still needed as concerns

labour inspectors, to prevent deaths and injuries. In 2014, 63 workplace accidents were

reported, of which nine were fatal (during the first six months of 2015, 26 accidents with five

fatalities) but incidents are under-reported. The Labour Inspectorate needs to target the

informal part of the construction sector more efficiently. The number of inspectors should

increase as only 50 cover implementation of laws on labour and on health and safety at work.

social dialogue,

the implementation of the General Collective Agreement, which lays

down the rights and obligations of employers and employees, is still pending. Amendments to

the law on the Social and Economic Council, still being drafted, need to provide clear

membership selection criteria and procedures. The council needs to strengthen its capacity to

improve the quality of social dialogue. Bi-partite social dialogue hardly exists.

As regards

social inclusion,

Kosovo needs to ensure that municipalities have sufficient

resources to deliver the social services under their responsibility.

social protection,

the first round of licensing of individual social and family service

providers has been completed and the second phase of licensing legal entities/organisations

has started. In 2014, four new minimum standards for social and family services were

adopted, increasing the number to 16. However the decentralisation of social services has still

not been implemented by municipalities and allocation of funding from the central budget is

still needed to ensure effective decentralisation. Budget constraints have delayed the

introduction of the new pension scheme.

equal opportunities,

the law on gender equality has been adopted but implementation and

enforcement of legislation needs to be improved to address high unemployment among

women and under-representation of women at all levels of decision-making. Insufficient

maternity leave provisions undermine efforts to tackle discrimination against women in the

workplace, especially in the private sector. The Agency for Gender Equality has not assessed

the implementation of the programme for gender equality (2008-2013).

On public health policy,

the first phase of the Health Information System (HIS) has been

completed and continued to be implemented. However, public health spending remains

among the lowest in the region. This hinders implementation and enforcement of sector

reforms and policies. For example, the 2014-2020 action plan to implement the health sector

strategy still needs to be adopted, the law on health insurance needs to be implemented,

implementation of the HIS needs to be completed to allow reliable collection of health data,

the health insurance fund needs to be set up and the 2013-2015 rare diseases action plan needs

to be implemented. Out-of-pocket payments continue to impede access to healthcare for all,

including vulnerable groups. Child mortality remains among the highest in Europe. The health

law needs to be amended following the adoption of the law on the health insurance fund.

The law on

tobacco control

needs to be enforced. The

communicable diseases

infrastructure

and reporting system need to be further developed. On

blood, tissues, cells and organs,

the

law on transplantation of tissues and cells needs to be implemented. Concerning

patients’

rights in cross-border healthcare, pharmaceutical, mental health, drug abuse

prevention, health inequalities and cancer screening,

no progress was made.

Insufficient funding for the health sector still hampers its ability to meet basic needs for

maternal and child health, public health and

nutrition,

with a risk of stunting among children.

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5.1.9. Education and research

Preparations in education and research are at an

early stage.

There has been

no progress

this area over the last year. The quality of education needs to be considerably improved. In the

coming year, Kosovo should in particular:

→

improve quality of education at all levels and improve access to quality education for

marginalised groups, especially children with disabilities, Roma, Ashkali and Egyptian

children;

→

ensure the autonomy and independent operation of higher education institutions and adopt

a new law for higher education based on international standards;

→

strengthen research and innovation capacity through reform of higher education

institutions and increase investment in research, both in the public and private sectors.

education,

the Kosovo curriculum framework and core curriculum need to be

implemented. The National Teacher Licensing Council developed a professional teacher

development system with performance evaluation mechanisms but the decision to allow an

across-the-board salary increase for all teachers is not in line with the reform principles

approved by the Ministry of Education and undermines the performance-based approach to

teacher policy. In April 2014, Kosovo participated in the Programme for International Student

Assessment (PISA) for the first time and results will be published in December 2016.

According to government data, total public spending on education is 4.4 % of GDP.

Rates of school enrolment are comparable with countries in the region, with the exception of

access to pre-school education or early childhood education. Only 4.5 % of children attend

pre-school education (age 0-5). 74% of children aged 5-6 attend pre-primary education.

The government continued actions to prevent early school leaving, particularly for children

from the Roma, Ashkali and Egyptian communities. However, implementation of legislation

on responding to non-enrolment and early school leaving needs to be further improved.

Kosovo continued work to provide access to quality education for children with disabilities

but the current rate of training is insufficient to meet the target of reaching all teachers within

a reasonable timeframe.

The current Vocational Education and Training (VET) system is not in tune with labour

market needs. A few VET programmes possess the required standards to receive accreditation

by the National Qualifications Authority. The VET school network needs to be rationalised

and the VET provision needs to be revisited.

The higher education system in Kosovo has been affected by the lack of a clear strategic plan,

which would be needed to avoid duplication and ensure the added value of study programmes.

The operation of higher education institutions in Kosovo is not transparent, particularly as

regards to recruitment procedures, which are weak and very vulnerable to politicisation at all

levels and sectors of education. The education sector remains a high-risk area for corruption.

Although the Kosovo Accreditation Agency has become a full member of the European

Network for Quality Assurance in Higher Education, its reputation has been significantly

tarnished both inside and outside Kosovo after key members of its senior management were

arrested on suspicion of corruption.

Difficulties in the implementation of the Pristina-Belgrade dialogue agreement on higher

education diplomas need to be overcome for full implementation in 2016.

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Kosovo continues to participate in the Erasmus+ programme for cooperation in higher

education and youth sectors. Cooperation is important to help enhance competences and skills

in staff and students, as well as employability of youth.

Kosovo has taken limited action to develop its

research and innovation

capacity. The

capacity of universities in Kosovo to undertake research work is extremely limited, which

negatively affects the quality of post-graduate programmes and innovation. The budget for

research remains insufficient as the level of investment in research is still below 0.2 % of

GDP. The law on scientific research activities is not being implemented due to a lack of

funding. The link between research and business remains weak. Kosovo participates in the EU

research and innovation programme 'Horizon 2020' but the number of projects evaluated

successfully and receiving funding is very small.

5.1.10. World Trade Organisation (WTO) issues

Kosovo’s preparations remain at an

early stage

and

no progress

was made in this area.

Kosovo is not a member of WTO and has taken no formal steps to join.

5.2.

Sector policies

5.2.1. Industry and SMEs

Kosovo has

some level of preparation

on industry and SMEs.

Some progress

was made in

this field. In the coming year, Kosovo should in particular:

→

follow up on the recommendations of the ‘Small Business Act’ assessment;

→

introduce regulatory impact assessments to reduce the administrative burden on SMEs.

As regards

industrial policy

and

SMEs,

the implementation of Kosovo’s 2013-2017 private

sector development strategy and the EU’s ‘Small Business Act’ are advancing slowly.

Communication between ministries and executive agencies needs to improve. To reduce

administrative burden on SMEs, the government needs to introduce regulatory impact

assessments. Strategies and action plans in this field need to be timed and monitored. The

Kosovo Investment and Enterprise Support Agency is operational and but not yet fully

staffed, so its impact is still limited. Although full online company registration has not yet

been introduced, the process for registering individual businesses and companies is quick (1-3

days). Nevertheless, the main obstacles to SME development and further growth are access to

finance, weak legal enforcement of contracts and business regulations, administrative barriers,

unfair competition from the informal sector, inefficient judiciary and corruption.

5.2.2. Agriculture and fisheries

Kosovo has

some level of preparation

in agriculture and rural development and in food

safety, veterinary and phytosanitary policy.

Some progress

was made by further

strengthening the institutions responsible and increasing the budget. In the coming year,

Kosovo should in particular:

→

improve land consolidation;

→

transfer inspection responsibilities to the Kosovo Food and Veterinary Agency;

→

set up the internal audit unit in the Agriculture Development Agency.

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agriculture and rural development policy,

the government has continued to increase

spending on agriculture. The volume of direct payments has almost doubled compared to

2014 and now stands at EUR 23 million. Similarly, the amount allocated to agricultural

investment grants stands at EUR 20 million. However, there are insufficient staff to ensure

proper monitoring and prompt payment. The Agriculture Development Agency’s Internal

Audit Unit has not been set up.

Further efforts are needed to tackle illegal changes of agricultural land use, which continue to

be an obstacle to implementing the law on spatial planning. Not enough is being done to

implement land consolidation to rationalise land holdings, establish a transparent market in

land and enforce sanctions.

Reliable agricultural data are a basic requirement for sound policy decisions. There are still

discrepancies between Eurostat’s and national statistics. The first agricultural census was

finalised in 2015.

Implementation of the law on organic production is weak, and the establishment of a

functioning supervisory authority and a commission on organic production is still pending.

Kosovo lacks minimum standards and cross-compliance measures in the areas of food safety,

animal health and welfare and the environment. The volume of illegal logging is still too high

for sustainable forest management.

As regards

food safety

and

veterinary

sectors, progress has been made in securing co-

financing and a location for a rendering plant for processing and disposing of animal by-

products. However, a package of laws (the food law, veterinary law, sanitary inspection law

and livestock law) has not yet been finalised. The annual inspection plan has been approved,

but the multiannual inspection plan for animal diseases is out of date.

Responsibility for inspection, which should have taken place by 1 January 2015 (already three

years late) has still not been transferred from municipalities to the Kosovo Food and

Veterinary Agency. There have been few developments in improving and systematising data

management for animal identification, movement and registration.

Illegal trade, particularly in animals from Serbia, continues to be a problem. The process of

upgrading food processing establishments to EU standards should continue.

In the

phytosanitary sector,

although the law on plant protection was amended, the plant

disease surveillance programme has not yet been set up. Further updates are needed to the list

of plants and plant products.

5.2.3. Environment and climate change

Kosovo remains at an

early stage

of harmonisation with the

acquis.

No progress

was made

on environment and climate change and in the coming year, Kosovo should in particular:

→

set up an environmental monitoring network for air and water;

→

establish systematic strategic planning on climate action.

Legislation to address increasing environmental challenges in Kosovo has not yet been fully

harmonised with the

acquis

or implemented. As regards

horizontal legislation,

environmental impact assessments and strategic environmental assessments need to be better

implemented, especially locally. Public participation and consultation need strengthening.

The

air quality

monitoring system is equipped, but still not fully operational. Although there

are advanced analytical laboratories, the lack of regular maintenance and calibration of the

monitoring equipment jeopardises the accuracy of monitoring. Data collection and processing

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is manual, with no automatic system to inform the public in real time. In addition, the Kosovo

Environmental Protection Agency’s air quality reports contain no inventory of air polluters

and pollution from the main sources is not adequately measured (in particular from the

Kosovo A power plant). Air quality plans for the biggest urban agglomerations are needed.

waste management,

the Ministry of Environment and Spatial Planning should step up

efforts to finalise a master plan for waste management and increase opportunities for

investment in this sector. Basic waste management definitions and concepts such as recycling

and recovery of different waste streams are not sufficiently supported by current legislation,

limiting opportunities for private sector involvement. Both investment funding and the

capacity of municipalities and operators to implement the 2012 law on waste remain very low.

The high number of illegal landfills needs to be addressed urgently.

water management,

an inter-ministerial water council chaired by the Prime Minister was

set up in early 2015. Kosovo lacks a water policy strategy, investment plan and strategy, and a

disaster risk reduction strategy. There is no progress in setting up river basin authorities or an

independent water management authority. The water resource monitoring and record system

remains incomplete for underground, surface, drinking and bathing water. Maintenance or

stolen and vandalised measuring equipment is an issue. Monitoring of the quality of drinking

water has improved but further quality control measures compliant with EU standards are

needed. A quality control system for bottled water has not been set up. On infrastructure, the

need for investment to improve efficiency is considerable (leakages are estimated at around

75 % of piped water). The recommendations from a dam safety study have yet to be

implemented. As a result of the introduction of checks, revenue collection has improved but is

still low. Recent droughts have highlighted the need to urgently reduce free water supplies

and develop alternative water resources. Regional water companies need to improve water

resource management and prepare drought management plans.

nature protection,

there has been very little progress in implementing the

acquis.

The

management plan for the "Sharri" park has been prepared but measures to combat illegal

construction activities in this park have stalled. There is very little progress in starting to set

up the Natura 2000 network of protected areas. Institutions in this area remain weak. Any

further development of hydropower should take place in conformity with EU legislation.

industrial pollution and risk management,

two integrated permits have been issued,

while three applications are currently under review from the total of 30 operators found to fall

under the industrial emissions Directive.

No progress was made on

civil protection

(floods, draughts, forest fires and other

environmental disasters).

A draft framework strategy on

climate change,

comprising a low emissions development

strategy and an adaptation strategy, has yet to be adopted. It should be made consistent with

the EU 2030 framework. Significant efforts are also needed to integrate climate action into all

relevant sector policies and strategies. Kosovo is at an early stage of transposing and

implementing the climate

acquis.

Even if there was some progress in the preparation of a

country-wide greenhouse gases (GHG) inventory report for 2013, significant efforts are

needed to align Kosovo with the EU monitoring mechanism regulation, and ensure that

Kosovo's capacity is enhanced. By-laws on substances that deplete the ozone layer, on

fluorinated greenhouse gases and on consumer information and CO2 emissions from new cars

were adopted but no practical measures are being implemented. An ad hoc decision by the

government to allow the import of second hand vehicles (over 10 years old) will have an

adverse impact on carbon dioxide emissions and air quality.

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Administrative capacity

in the environment and climate sectors remains weak. The

government adopted a decision to establish the National Council on Climate Change in

August 2015. Effective inter-ministerial co-operation to enable adoption and implementation

of low-carbon growth policies is further needed. Significant further efforts are needed to raise

awareness on environmental issues.

5.2.4. Transport policy

Kosovo is at an

early stage

of preparation in transport policy.

Some progress

was made in

with the adoption of the 2015-2025 multimodal transport sector strategy. In the coming year,

Kosovo should in particular:

→

strengthen its regulatory institutions and ensure their independence;

→

continue reforms in the railway sector;

→

step up efforts to improve road safety.

Kosovo agreed to a priority list of 'soft measures' in transport presented at the Western

Balkans 6 Vienna Summit and will ensure that they are all fully implemented before the WB6

Summit in June 2016. On

trans-European transport networks,

Kosovo continued to

participate in the South East Europe Transport Observatory (SEETO). Kosovo played an

active role in the Western Balkans 6 connectivity agenda by endorsing the agreement on the

regional core transport network in Brussels in April, the agreement in Riga in June on the core

network corridors and on the list of projects to be implemented by 2020 at the Western

Balkans 6 Summit in Vienna and by establishing the National Investment Council.

road transport,

the strategy and action plan for road traffic safety was adopted in

September 2015. However, the law on road traffic safety still needs to be approved. Kosovo

has still not aligned its legislation with the

acquis

on market access, the profession of road

transport operators and digital tachographs. The maintenance budget for motorways is still

insufficient to ensure regular maintenance.

rail transport,

the Rail Regulatory Authority is operational, but there was no progress on

strengthening its capacity. The regulator’s independence needs to be ensured as regards the

licensing process and market regulation. There has been no new entrant in the railway

transport market during the reporting period. The decision of the regulator to revoke the

licence issued in March 2014 to a private operator was found unlawful by the Basic Court in

Pristina. The civil aviation and railway accident and incident investigation body is not

operational. Upgrading the railway infrastructure is at an early stage of implementation.

air transport,

the incorporation of the first-phase requirements for the European Common

Aviation Area Agreement into domestic legislation is nearly complete, pending alignment of

the labour law with the

acquis

on working time. The Kosovo Civil Aviation Authority is still

not part of the Safety Assessment of Foreign Aircraft programme as no board members have

been appointed since September 2013. There was no progress on implementing the law on the

air navigation services agency. Implementing legislation still needs to be adopted to ensure

professional air navigation and safety services. The air navigation service provider does not

meet the safety and financial criteria required for certification.

As regards

intermodal

transport, the 2015-2025 multimodal transport sector strategy and its 5

year action plan have been approved by the government in October 2015.

5.2.5. Energy

Kosovo remains at an

early stage

of legislative alignment with the

acquis

but there was

some

progress

in the energy area. In the coming year, Kosovo should in particular:

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→

start implementing the

acquis

on security of supply and make a final decision as regards

new generation capacity and decommissioning the Kosovo A power plant;

→

continue to strengthen institutional capacity for the energy market, in particular

safeguarding the regulator’s independence, appointing its full board, ensuring its financial

stability, and setting up transparent mechanisms to adjust energy prices.

→

strengthen the capacity of the Nuclear Safety and Radiation Protection Agency, and

identify a temporary storage facility for radioactive waste.

The energy sector continues to face problems, even if some progress was made. Power

stability improved and cuts are now infrequent, although the situation deteriorated due to last

year’s explosion in the hydrogen laboratory of the Kosovo A power plant. Those units which

were severely damaged by the explosion are now operational.

security of supply,

investment and maintenance continue to improve the reliability of the

power transmission system and reduce transmission losses. Whilst distribution losses

dropped, combined commercial and technical losses are high at 28.46 %. Two laws regulating

the oil sector, including on obligatory petroleum reserves have still not been adopted. Current

oil stocks are estimated to be only four days. There is no progress in the Energy Community’s

dispute settlement procedure about customs duties on imports of petroleum products.

While there was substantial progress with Serbia in terms of relations between transmission

companies, little progress was made, until the August 2015 agreement, on the parts of the

2013 agreement that provide for the establishment of a Serbian power supply company in the

north. The parallel management that Serbia installed at the Gazivode/Ujmani hydropower

plant continues to interfere in its operation, with a risk of flooding.

As regards the

internal energy market,

the third energy package has not yet been transposed.

Negotiations with the single bidder for building the new lignite power plant are ongoing and

the offer still needs to be evaluated. No progress was made on decommissioning Kosovo A or

refurbishing Kosovo B. Kosovo is highly unlikely to meet its Energy Community Treaty air

quality obligations, and has not prepared the necessary emissions plan.

There was no progress either as regards account unbundling or phasing-out cross-subsidies

between different categories of customers. In January, the power company Kosovo Electricity

Distribution and Supply Company (KEDS) and the public supplier Kosovo Electricity Supply

Company (KESCO) were legally unbundled. No progress was made on market opening and

customer switching a legal obligation as a member of the Energy Community from 1 January

2015. The operability and independence of the Energy Regulatory Office (ERO) have long

been undermined by political interference, low administrative capacity, a lack of human

resources and a 17 % budget cut. The ERO board currently has only two out of five members,

meaning that it cannot legally assume many of its responsibilities. The government has not yet

designed a mechanism to support vulnerable customers.

The existing

renewable energy

policy framework, authorising and licensing procedures have

yet to produce results or even remotely approach Kosovo’s renewable energy target of 25 %

by 2020. Kosovo is still not in line with the 2009 renewables directive and has no mechanism

to monitor progress in reaching its 2020 targets. Any further development of hydropower

should respect EU environmental legislation. There was no progress in meeting the

requirements for the use of biofuels in transport.

The law on

energy efficiency

is not aligned with the

acquis.

The directive on energy

performance of buildings is not being implemented. Kosovo still has not set up its own energy

efficiency fund. The combined heat and power project at the Kosovo B power plant started

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operating in November, resulting in lower costs to households, reduced environmental

pollution and a more secure supply for Pristina residents. The Kosovo Agency for Energy

Efficiency is understaffed and has no capacity to monitor, evaluate and verify progress

towards targets. There was progress in municipal energy efficiency planning, but local

capacity needs strengthening.

nuclear safety and radiation protection,

the law on protection from ionising and non-

ionising radiation has still not been adopted. The staff of the regulatory agency has increased

but its licensing and inspection capacity remains poor. Funding for the agency is insufficient

for it to implement its mandate, in particular licensing, public health and safety aspects. There

is no radiation monitoring (for example of potential depleted uranium sites). There is no

control of radioactive waste and no radiological emergency plan. Kosovo should identify a

temporary radioactive waste storage facility while work continues to find a permanent site.

5.2.6. Information society and media

Kosovo has

some level of preparation

in this area.

Some progress

was made, in particular in

electronic communication and information and communication technologies. However,

Kosovo needs to continue efforts to complete the legal framework. In the coming year,

Kosovo should in particular:

→

ensure appropriate capacity, resources and independence of telecoms and media regulators;

→

implement, as a matter of urgency, the digital switchover and develop a solution for

sustainable funding of the public service broadcaster.

electronic communications and information and communication technologies,

the

Regulatory Authority of Electronic and Postal Communications (RAEPC) has completed the

secondary legislation based on the 2012 law on electronic communications. Kosovo has

continued efforts to use excess infrastructure capacity of the public service operators

(railways, energy and road infrastructure) for electronic communications. The three mobile

operators launched 4G services in December 2014. Mobile telephony penetration reached 95

% of active users. Overall internet penetration increased from 9.18 % in 2013 to 10.51 % in

2014.

RAEPC has not seen any improvements in its financial and organisational independence. This

year the regulator has auctioned a new frequency band for the use of telecommunications

operators. It is in the final stage of reviewing offers. A national computer emergency response

team, set up in 2014, still lacks trained staff.

At the end of August 2015, Kosovo and Serbia agreed the Action Plan to implement the 2013

Brussels telecom arrangements, including arrangements for the allocation of a 3 digit dial

code for Kosovo by the International Telecommunications Union (ITU).

information society services,

Kosovo adopted a new IT strategy. The Information

Society Agency is now fully operational and serving as the central government entity for e-

government services and infrastructure.

audiovisual policy,

Kosovo failed to meet the internationally agreed June 2015 deadline

for the digital switchover, on which the law was adopted only in July. The Independent Media

Commission was very late in adopting a strategy for digitalisation which leaves important

issues undefined. Consequently, the preparation of necessary implementing legislation will

also be delayed. Technical preparations are still at an early stage. Kosovo needs to ensure that

the digital switchover process is carried out in full transparency.

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Since Kosovo is not a member of the ITU, its frequencies are under the authority of Serbia.

The public service broadcaster RTK remains dependent on state financing from the Kosovo

budget, which undermines its editorial independence. In 2014, the public broadcaster’s union

organised a string of protests accusing management of nepotism, corruption and bias in favour

of one political party. RTK’s management responded by dismissing two leaders of the union,

who were reinstated by a decision by the Labour Inspectorate. Kosovo has failed to meet its

legal obligation to ensure RTK’s financial independence within the required timeframe.

5.2.7. Financial control

Kosovo is at an

early stage of preparation

in this area.

Some progress

was made in the past

year, especially with the adoption of the strategy and action plan for public internal financial

control (PIFC) and in relation to external audit. However, lack of systematic implementation

of managerial accountability and delegation of responsibilities within organisations hampers

further development of PIFC. Significant efforts are needed to implement PIFC at all levels of

the administration and in publicly owned enterprises. In addition to addressing the

shortcomings outlined below, in the coming year Kosovo should in particular:

→

start implementing the activities set out in the 2015-2017 PIFC strategy and adopt the

revised implementing legislation for PIFC;

→

ensure systematic follow-up to external audit findings and recommendations.

Public internal financial control

The government adopted a public internal financial control

strategy and action plan

for

2015-2019 in April 2015. The strategy provides for the setting up of a PIFC Council to

monitor and report on the implementation of the strategy on an annual basis.

The

Central Harmonisation Unit

(CHU) is carrying out its duties as provided for in the law

on public finance management and accountability. It needs to strengthen its capacity for

training and capacity building among its 13 existing staff. The CHU provides an annual report

to the government on progress on the introduction of PIFC, based on responses to self-

assessment questionnaires, which is also considered by the Assembly Committee on

Oversight of the Public Finances. It is, however, not followed up by conclusions or

recommendations, neither by the government nor the Assembly.

The legal framework regulating

financial management and control

is largely in line with the

model of the Committee of Sponsoring Organisations (COSO) Internal Control Framework

and the guidelines of the International Organisation of Supreme Audit Institutions

(INTOSAI). Further amendments to the law on public financial management and

accountability and its implementing legislation are foreseen. Managerial accountability and

the delegation of responsibilities within organisations is neither well regulated nor

implemented coherently. Risk management is misunderstood to be a compliance exercise

rather than a management tool and is rarely applied. Neither financial commitments nor use of

financial resources are systematically kept within budget. The

centralised budget inspection

function still needs to be regulated in line with PIFC requirements.

The law on

internal audit

is partially compliant with international standards for the

professional practice of internal auditing. 85 (out of 96) organisations required by law to set

up an internal audit function have done so. A national scheme for the certification of internal

auditors is in place. All auditors have undergone training for international certification and 67

(out of 149) have been certified with EU financial support. In order to ensure sustainability,

Kosovo needs to allocate sufficient funds for certification and continuous professional

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training. All institutions with an audit function have an audit charter and perform audits

according to strategic and annual audit plans. The implementation of audit findings and

recommendations varies, however, depending on the skills of auditors and their management.

External audit

On the

constitutional and legal framework,

the National Audit Office's (NAO) role is

recognised by the Constitution. A new law on the NAO is being drafted which should define

more clearly the functional, operational and financial independence of the General Auditor, in

line with the INTOSAI standards.

institutional capacity,

the NAO is led by an acting Auditor General since November

2014. A candidate selected by the President was not approved by the Assembly and the

President has not yet restarted the process. The NAO office is fully staffed with 146 posts, of

which 120 are audit posts. Training is provided systematically, both on the job and externally.

A certification programme for regularity audit is in place and implemented based on the

international standards of supreme audit institutions (ISSAI).

The NAO has improved the

quality of audit work

by adopting a financial audit manual in

line with INTOSAI standards over the past year. It continues to annually update its regularity

audit and performance audit manuals in line with the ISSAI standards. A quality management

framework is in place. A specific audit support department with six staff carries out quality

assessments in addition to the quality control, which his part of the audit processes.

The

impact of audit work

needs to be further improved. The annual activity report is

discussed by the Assembly Committee for Oversight of the Public Finances, but there is no

systematic parliamentary follow-up to the audit report. The NAO makes all its reports

available online and proactively informs the media about important reports.

Protection of the EU’s financial interests

As regards

acquis

alignment,

protect of the EU’s financial interests remains weak. Under

Kosovo’s criminal code, fraud relating to EU funding is a crime. The Ministry of Finance is

responsible for supporting anti-fraud and anti-corruption activities in public administration

institutions and for raising awareness of fraud in general. A special regulation is in place that

sets out the responsibilities and duties of ministries in this regard.

Kosovo does not yet have an

anti-fraud coordination service

(AFCOS) or AFCOS network.

No regular reporting system or risk assessment tools have been developed. Policy documents,

such as a strategy and action plan to prevent and combat fraud for the protection of the EU’s

financial interests, have yet to be developed.

With regard to

cooperation with the European Commission,

Kosovo has taken initial steps

to cooperate with Commission investigators during their on-the-spot missions in the past year.

There are still no clearly determined basic procedures for reporting irregularities and

suspected fraud cases, and an irregularity management system needs to be set up.

Protection of the euro against counterfeiting

Concerning

acquis

alignment,

the legislation establishes the competent authorities and

procedures for dealing with counterfeit money. Medals and tokens similar to euro coins have

not yet been regulated.

Technical analysis

of counterfeit money, including euro banknotes

and coins, is mainly performed by the forensic agency within the Ministry of Internal Affairs.

The Central Bank of Kosovo does not have a specific department devoted to this analysis but

provides guidance on what to do about counterfeit money to the financial institutions licensed

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by it. There are no formal

cooperation agreements

with the European Commission and the

European Central Bank.

5.2.8. Statistics

Kosovo is

at an early stage

of aligning its statistics with European standards in some sectors,

whereas in other sectors some level of preparations is visible. However, Kosovo faces

difficulties in implementing its own legislation in the area.

Good progress

was made in a few

areas, most notably in the implementation of the agricultural census. Nevertheless, the

Agency of Statistics (KAS) faces substantial shortages in terms of administrative capacity that

prevent it from producing on-time, accurate statistics relevant for evidence-based policy-

making. The production of essential macro-economic and business statistics remains limited.

In addition to addressing the shortcomings outlined below, in the coming year Kosovo should

in particular:

→

ensure sufficient human and financial resources in the budget to allow the statistical

agency to fulfil its mandate;

→

make more sector statistics available: e.g. macroeconomic and business statistics, statistics

on energy and income and living conditions.

statistical infrastructure,

the legal framework is broadly in line with the European

Statistics Code of Practice. The law on official statistics still needs to be amended and the

implementation of the existing provisions requires improvement. KAS is the main producer

and coordinator of statistics and in 2015 it introduced a web-based dissemination database,

thereby improving the accessibility of data. However, its administrative capacity and lack of

financial resources hampers the timely production of statistics and it prevents the agency

from taking full advantage of international support. All agency staff, but especially newly

recruited staff, need additional training, both on quality issues and on statistical methods and

tools. The current premises of KAS do not allow for optimal work and use of modern

technology. Data transmission to

Eurostat

should be improved. As regards classifications

and registers, not all the latest versions of different classifications are in place. While the

introduction of the European classification of economic activities (NACE Rev.2) in the

business register has been completed, consistency problems have been encountered. The

statistical business register needs to be updated and the quality of the data improved.

On macroeconomic statistics

partial implementation of the European System of Accounts

2010 started in 2014. The KAS currently compiles annual national accounts and started

publishing quarterly national accounts in December 2014, but further development of short-

term statistics is necessary to improve quarterly accounts. Supply-use tables and input-

output tables, are not produced nor are regional and sector accounts or fiscal notifications.

Statistics on the balance of payments are compiled by the Central Bank of Kosovo and are

broadly in line with the

acquis.

Government finance statistics are published annually. KAS

started publishing the Harmonised Index of Consumer Prices in January 2015 and further

work is required to increase compliance with EU standards.

Structural

business statistics

(SBS) and some short-term statistics are partially in line with

the acquis, but the availability of short term statistics is limited. Industry and construction

statistics are broadly in line with the SBS Regulation, while statistics on the service sector

need to be developed. No data is produced on construction activities as the KAS has no data

on building permits and more staff is required to provide additional quality short-term

statistics. PRODCOM (list of products of the European Union) statistics have not yet been

introduced. Tourism statistics are partially compliant with the acquis. Research and

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development, innovation and information and communication technology statistics are not

produced on a regular basis.

Most

social statistics

other than demographic statistics still need to be produced, in line with

the acquis. A pilot survey on income and living conditions (SILC) is being conducted.

Resources should be provided for SILC to become a regular survey. Some social protection

statistics are produced but the unemployment scheme needs to be added and the quality of

administrative data needs to be improved. An annual labour force survey is carried out but

the labour cost index, structure of earnings data and job vacancy statistics are still not

produced. Public health and crime statistics are not yet in line with the acquis.

agricultural statistics

an agriculture census was held in November 2014, albeit without

the participation of the four northern municipalities. The preliminary results were published

in February and final results are not yet available. Agricultural price indices and economic

accounts for agriculture are produced on a regular basis, while milk and dairy and slaughter

statistics are still not. The farm structure survey was carried out as part of the 2014

agriculture census and the 2013 agriculture household survey. Supply balance sheets and the

agriculture labour index are not yet produced.

Energy statistics

cover parts of the regulation on energy statistics. Some annual energy data

and energy prices are provided to Eurostat but further improvements are needed. The lack of

energy efficiency statistics continues to be an obstacle to reporting on energy savings.

environment statistics,

waste and water statistics are already collected but statistics on

environmental protection expenditure, material flow balances and air emissions accounts are

not yet produced.

5.3.

Justice, freedom and security

Kosovo is

at an early stage

in the area of justice, freedom and security, but has made

some

progress

over the past year. The authorities managed to successfully address and bring down

the significant rise in migration flows seen earlier this year. However, strong political

commitment is needed to tackle the underlying push factors of irregular migration.

Despite some operational improvements, final convictions resulting in permanent confiscation

of assets obtained through crime are still rare. The number of arrests, seizures and court

verdicts for drug trafficking remains low. The investigative capacity of the police is generally

good, but the implementation of intelligence-led policing concepts needs to be further

improved. Kosovo is actively involved in international and regional police investigations;

however, its formal cooperation is limited due to status-related reasons.

In the coming year, Kosovo should pay particular attention to:

→

fully implementing the intelligence-led policing approach, including by making full use of

the potential of the National Centre for Border Management;

→

systematically applying tools for financial investigation and asset confiscation, enhancing

the capacity and expertise of police, prosecution and judges;

→

pursuing organised crime-related investigations with the aim of securing final convictions,

especially in the fight against drug trafficking and human trafficking, and in dismantling

migrant smuggling groups.

5.3.1. Visa policy, border controls, asylum and migration

As regards

visa policy,

in line with the European Union Schengen Visa Code and with the

expansion of consular missions, Kosovo managed to decrease the number of visas issued at

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border crossing points. A total of 943 visas were issued from September 2014 to July 2015, of

which only six were issued at border crossing points. Citizens of 88 countries currently need a

visa to enter Kosovo.

An improved version of the Civil Status Registration System (CSRS) was launched in July, in

line with the adopted revised legislation. Civil status certificates are issued after checking the

CSRS data against the civil registry books. In August 2015, Kosovo started digitalising the

civil registry books returned from Serbia in order to electronically link and match them with

CSRS data. The process should be completed by mid-2016.

There was little action on the development plan for the National Centre for

Border

Management

(NCBM). Based on the new law on inter-agency cooperation, a joint

intelligence, risk and threat analysis unit was set up in the NCBM and a strategic threat

assessment for integrated border management (IBM) produced. Within the new structure,

clearer communication is needed on intelligence requirements, from central to regional and

local level.

Joint patrols were carried out with Albania, the former Yugoslav Republic of Macedonia and

Montenegro. A joint cooperation centre was opened in January with the former Yugoslav

Republic of Macedonia. The technical work on delineating the remaining nine kilometres of

the border with Montenegro was completed and Ministers signed the agreement in August

2015, which now needs parliamentary ratification by 2/3 majority. All six interim IBM

crossing points with Serbia are operational and two more were agreed in principle. Technical

agreements on the exact location and construction of permanent IBM crossing points were

reached. There have been improvements in checks on documents. The detection rate of

offences at the borders has increased across the three IBM agencies (Kosovo police, Kosovo

Customs and the Kosovo Veterinary and Food Agency) due to improved risk analysis and

subsequent operational actions. The Kosovo police has not yet put in place a maintenance

contract for the EU-funded border management IT system; this hinders progress on effective

border control.

Since June 2014 Kosovo has been a full member of the Migration, Asylum, Refugees

Regional Initiative to further promote security, stability and regional cooperation in this field.

Unlike some of its neighbours, Kosovo has not been seriously affected by the refugee crisis.

Though it has increased, the number of

asylum claims

filed in Kosovo is still limited. Kosovo

received 98 asylum claims in 2014 and 53 from January to August 2015. The majority of

asylum applicants came from Syria. Asylum-seekers are referred to the asylum centre for the

duration of the procedure, where they enjoy freedom of movement and have access to all

basic services. Most asylum-seekers choose to continue their journey before their claim has

been decided. So far Kosovo authorities granted subsidiary protection to only one person in

2015 (one in 2014, three in 2013). The detention centre for foreigners was made operational

in June 2015, providing for a more effective return policy. The accommodation centre at

Pristina airport is also operational.

Kosovo has aligned most of its legislation with the

acquis

and international standards in this

area. Availability of interpreters has been ensured. However, effective mechanisms to identify

countries of origin and profiles of people in need of international protection need to be

implemented.

December 2014 to March 2015 saw a significant increase in irregular

migration

from Kosovo

via Serbia into the EU. This was mirrored in a corresponding increase of asylum seekers from

Kosovo. The number of asylum applications lodged by Kosovo citizens increased to 37 905 in

2014 (from 20 215 in 2013). From January to June 2015, 62 860 Kosovo citizens applied for

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asylum in the EU. This number has decreased significantly since May 2015. Still, Kosovo

must address the high number of manifestly unfounded asylum applications lodged by its

citizens in the EU. Kosovo undertook some effective short-term measures to curb irregular

migration early in 2015. Reinforced checks on buses in Kosovo, stringent checks of licenses

of bus companies, awareness-raising and Serbian border control measures at the border with

Hungary resulted in a significant decline in irregular migration. The EU-sponsored dialogue

with Serbia on irregular migration led to closer cooperation with Belgrade in this area.

Kosovo must ensure effective long-term policies to prevent further spikes in irregular

migration. Measures are also needed to tackle the underlying causes of emigration, in

particular high unemployment, especially among young people. The 2013 migration profile,

providing analysis and data for policy guidance on migration, was adopted in March 2015; the

2014 profile is expected to be approved by end-2015.

Many of the migrants who left Kosovo have since been returned. A functioning

readmission

process is in place and the acceptance rate from Kosovo is high (97 % in the first half of

2015). Kosovo readmitted 4 610 people in 2014, of whom 3 352 were forced and 1 258

voluntary returnees. In the first half of 2015 Kosovo readmitted 12 330 people, of whom a

majority (6 834) were voluntary returnees and 5 496 forced. Kosovo has signed readmission

agreements with 22 countries. Further readmission agreements, including with Turkey, are

currently being negotiated and Kosovo should encourage their swift conclusion.

The regulation governing the

reintegration

fund has been amended, providing for broader

access of returnees, who are economically particularly disadvantaged, to reintegration

services. Central processing of repatriated people is largely efficient and emergency

assistance is provided to those in need. The Reintegration Case Management System has

improved. An increased number of returnees has benefited from employment schemes and

start-ups of businesses. Agreements with local companies have been reached to further

increase this number. The long-term integration of returnees, through access to education,

employment and healthcare, remains a challenge. Kosovo needs to ensure that the budget of

the reintegration fund is spent, making full use of the resources available to support

reintegration. The capacity of municipalities to efficiently manage reintegration at local level

should be further increased.

5.3.2. Money laundering

The action plan for the national risk assessment on money laundering and combating financial

terrorism was mostly implemented on time. With regard to the criminal offence of money

laundering, Kosovo’s legal framework is largely in compliance with the Vienna and Palermo

Conventions. However, certain gaps, for instance on the declaration of assets by senior public

officials and on market manipulation, remain.

Cooperation between the Financial Intelligence Unit in the Ministry of Finance and key

bodies in the anti-money laundering chain needs to be further enhanced. Better co-operation

and interaction with in particular police and prosecution is vital. The anti-corruption

department within the Kosovo Special Prosecution Office should be strengthened to tackle

more anti-money laundering cases, in cooperation with the EU Rule of Law Mission,

EULEX. There has been an increase in the number of anti-money laundering cases forwarded

to the prosecution. Nevertheless, there have been few convictions to date. Cooperation

between the prosecution and police should be strengthened. Kosovo should make an effort to

align its legislation and practices to the FATF recommendations.

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5.3.3. Drugs

The Kosovo police directorate for investigating trafficking in narcotics has paid some

attention to prevention and supply reduction in implementing the strategy and action plan

against narcotics. Operations, including house raids, led to the dismantling of some criminal

groups. Further implementation of intelligence-led policing is nevertheless necessary.

Kosovo cooperates with the European Monitoring Centre for Drugs and Drugs Addiction, but

has yet to appoint a national focal point or an operational drug observatory. Special attention

needs to be paid to raising public awareness of the consequences of drug abuse. A new

training programme on the dangers of drug abuse has been developed for Kosovo police

community safety officers and selected teachers. Addiction treatment services and methadone

therapy services were set up in five hospitals and two prisons, strengthening drug abuse

prevention and harm reduction strategies. Kosovo continues to be used mainly for transit and

storage of heroin and cannabis (skunk), but drug seizures remain low.

5.3.4. Police

The Kosovo police continues to be perceived as the most trusted rule of law institution in

Kosovo. Cooperation between the Kosovo police and Europol is currently facilitated by an

EU Member State official working within EULEX. The Kosovo police has already

contributed to successful joint investigations supported by Europol, including the large-scale

destruction of a Europe-wide migrant smuggling network in March. Kosovo applied to join

Interpol in April.

Cooperation between the independent police inspectorate (PIK) and the Kosovo police

Professional Standards Directorate continue to be good. In 2014, the PIK received 1 304

complaints and information, on the basis of which 132 cases were sent to the prosecution

service. Criminal indictments were filed against 28 suspects and are being processed in the

competent courts.

The integration of former Serbian Ministry of Internal Affairs Units officers into the police

led to unrest when others who had not been integrated into the police protested against their

non-selection. Additional staff were allocated to war crimes investigations within the police,

but investigations remain largely non-operational. Continued efforts remain necessary on

witness protection.

5.3.5. Fighting organised crime and terrorism

Track record

Kosovo needs to build a track record of fighting organised crime, including confiscation and

sequestration of assets and final conviction of perpetrators, but there is little concrete evidence

of this so far. In 2014, the estimated value of frozen and temporarily confiscated assets was

more than EUR 30 million, while the value of permanently confiscated assets, managed by

the Agency for Managing the Sequestrated and Confiscated Assets, was a total of EUR 128

298, covering 29 assets.

The police arrested a substantial number of people who had either joined terrorist groups in

conflicts abroad or intended to do so. During 2014, the directorate against terrorism

investigated and filed charges in several terrorism-related cases and conducted two

operational plans and 484 raids in different regions.

During 2014, 9.3 kg of heroin, 21.1 kg of cocaine and 722.8 kg of marijuana were

confiscated, and 17 criminal gangs were identified and disrupted.

Institutional and operational capacity

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To boost the police’s capacity to effectively tackle organised crime, police officers were

trained on advanced investigation techniques for hate crime, airport security check points and

strategic assessment and tactical tasking and coordination. More financial investigations were

conducted compared to previous years and nine financial experts were trained and certified to

further step up the capacity to conduct financial investigations. Kosovo needs to further

increase the level of expertise to tackle complex criminal investigations, such as financial

crime and procurement fraud, essential to dealing with corruption effectively. Kosovo

institutions have to commit themselves to a zero-tolerance approach in the fight against

organised crime and corruption in practice and in all decision-making processes. A new

national coordinator against trafficking in narcotics should be appointed.

Legal framework

Some progress has been made and Kosovo has established the key components of the legal

framework necessary for the fight against organised crime. Based on the law on preventing

and combating

cybercrime,

the police department for investigating organised crime set up a

sector for cybercrime investigations and staff received specialised training.

In January a law was adopted criminalising the phenomenon of foreign terrorist fighters in

line with UN Security Council Resolution 2178 (2014). The criminal code does not provide a

sufficient legal base for tackling the financing of terrorism and the terminology used is

inconsistent. Kosovo’s legislative framework for seizure and confiscation lacks specific

provisions to enable the authorities to take the necessary preventive and punitive measures to

freeze and, if appropriate, seize terrorist-related funds or other assets without delay, in

accordance with the relevant UN Resolutions. Efforts need to be enhanced to identify, prevent

and disrupt the flow of foreign terrorist fighters traveling to conflict areas such as Iraq and

Syria.

The parliament adopted the law on the interception of telecommunications in May 2015.

Strategic framework

The implementation of the 2012-2017 strategy and action plan against

organised crime

ongoing. In November 2014, the third annual review of the 2012-2017 strategies and action

plans against organised crime, narcotics and terrorism took place. The assessment covered the

practical implementation of the activities in the 2013-2014 action plans. A new strategy

against

trafficking in human beings

(2014-2019) was adopted in May 2015.

In September 2015 Kosovo adopted the 2015-2020 strategy and action plan on prevention of

violent extremism and radicalisation that may lead to terrorism. The strategy is the result of

close cooperation with religious communities, social and frontline workers, the education

system and youth organisations.

Fighting organised crime and corruption remains fundamental to countering criminal

infiltration of the political, legal and economic systems.

5.3.6. Judicial cooperation in civil and criminal matters

With regard to the Hague Conventions, in particular the 1980 Convention on international

child abduction, the Department for International Legal Cooperation within the Ministry of

Justice only deals, albeit professionally, with the civil aspects of international child abduction

cases. Kosovo needs to enhance its capacity to become an effective partner in the context of

mutual legal assistance. No new bilateral agreements on judicial cooperation were concluded.

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Annex I – Relations between the EU and Kosovo

On 27 October 2015, the European Union signed a

Stabilisation and Association

Agreement

(SAA) with Kosovo. The SAA constitutes the first contractual relationship

between the EU and Kosovo. The SAA is a comprehensive agreement that provides a

framework for political dialogue and covers co-operation in a wide variety of sectors,

including justice and home affairs, trade, education, employment, energy, environment and a

range of other policy areas.

Kosovo has continued to address the priorities set out in last year’s Progress Report and in the

Commission's feasibility study for a Stabilisation and Association Agreement issued in 2012.

In particular, progress has been made on the EU-facilitated dialogue with Serbia and

requirements of the visa liberalisation dialogue. However, the political deadlock following the

June 2014 elections only ended in November 2014 with the formation of a new coalition

government. This has caused delays in a number of areas.

Kosovo’s commitment to its EU-facilitated dialogue with Serbia and the normalisation of

their relations has been instrumental to the fulfilment of its European ambitions. Kosovo

needs to continue to focus on the implementation of agreements reached with Serbia and

continue negotiating new ones.

Kosovo has remained engaged in the

Stabilisation and Association Process

Dialogue.

Visa

liberalisation

continues to be one of Kosovo's key priorities. The Commission has issued two

reports on Kosovo's progress towards visa liberalisation (February 2013 and July 2014).

Following Kosovo's report in June, expert missions took place in July 2015.

As regards

financial assistance,

during 2014 the EU Office in Kosovo continued to work

closely with the Ministry of European Integration in the preparation of the 2014 programme

under the IPA II financial framework. The IPA 2014 programme was approved by the IPA

Committee on 27 November 2014 with an EU contribution of EUR 66.05 million,

complemented with co-financing from Kosovo for an overall budget of EUR 75.38 million.

The Framework Agreement between Kosovo and the European Commission on the

arrangements for the implementation of union financial assistance to Kosovo under the

Instrument for Pre-accession Assistance (IPA II) was signed in April 2015. The Financing

Agreement for IPA 2014 entered into force on 14 September 2015. In 2014, the EU Office

signed 212 contracts for projects in Kosovo for a total of EUR 79.3 million. It continued to

ensure the co-ordination of donors active in Kosovo by organising – together with the Kosovo

Ministry of European Integration – regular donor co-ordination meetings.

The Commission submitted its proposal to sign and conclude the framework agreement on the

participation of Kosovo in EU programmes in April 2013. This proposal is still pending

Council approval.

Following the extension of the mandate of the EU Rule of Law Mission

EULEX

until June

2016, a new Head of Mission took office in October 2014. In response to allegations of

corruption within the mission, the HRVP in November 2014 appointed an independent legal

expert to review EULEX's handling of these allegations. The expert issued his final report in

April 2015. Throughout the reporting period, Kosovo institutions maintained good co-

operation with EULEX.

In August 2015 the Kosovo Assembly adopted the constitutional amendments and the law

allowing for the establishment of the

Specialist Chambers and a Specialist Prosecution

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Office,

which are to prosecute cases of grave trans-boundary and international crimes

committed during and in the aftermath of the conflict in Kosovo.

To date, Kosovo has been recognised by 110 UN member 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 urged the Kosovo

Assembly to adopt the legislation concerning the establishment of the Specialist Chambers

swiftly. He also called for full engagement by Belgrade and Pristina in the establishment of

the Association/Community of Serb majority municipalities. He expressed concern at the

population outflows from Kosovo in late 2014 and early 2015.

The NATO-led Kosovo Force (KFOR) has continued to help ensure a safe and secure

environment in Kosovo. During the reporting period, it had some 4 500 personnel.

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Annex II – Statistical Annex

STATISTICAL DATA (as of 7.09.2015)

Kosovo

Basic data

Population (thousand)

Total area of the country (km²)

National accounts

Gross domestic product (GDP) (million euro)

GDP (euro per capita)

GDP (in Purchasing Power Standards (PPS) per

capita)

GDP (in Purchasing Power Standards (PPS) per

capita), relative to the EU average (EU-28 =

100)

Real GDP growth rate: change on previous year

of GDP volume (%)

Gross value added by main sectors

Agriculture, forestry and fisheries (%)

Industry (%)

Construction (%)

Services (%)

Final consumption expenditure, as a share of

GDP (%)

Gross fixed capital formation, as a share of GDP

(%)

Changes in inventories, as a share of GDP (%)

Exports of goods and services, relative to GDP

(%)

Imports of goods and services, relative to GDP

(%)

Business

Industrial production volume index (2010 = 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)

Inflation rate

Consumer price index (CPI), change relative to

the previous year (%)

Note

2002

10 887

2002

2010

2 208p

10 887

2010

4 402

2 480

2011

1 799b

10 887

2011

4 814

2 672

2012

1 816

10 887

2012

5 059

2 799

2013

1 821e

10 887

2013

5 327

2 935

2014

1 805e

10 887

2014

Note

3.3

4.4

2.8

3.4

16.2

20.7

7.7

55.4

102.6

29.6

3.4

19.9

55.5

15.6

19.7

9.2

55.6

103.3

30.7

3.3

19.6

56.8

14.8

19.9

8.2

57.1

105.2

26.0

2.9

18.2

52.4

14.4

20.3

7.9

57.4

104.0

24.8

2.8

17.4

49.0

Note

2002

2010

16.1

2011

13.6

2012

16.8

2013

32 651

12.4

2014

33 937

13.7

13.8

12.9

12.3

8.6

73.7

72.1

74.2

74.5

74.1

Note

2002

-1.0

2010

3.5

2011

7.3

2012

2.5

2013

1.8

2014

0.4

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Balance of payments

Balance of payments: current account total

(million euro)

Balance of payments current account: trade

balance (million euro)

Balance of payments current account: net

services (million euro)

Balance of payments current account: net

income (million euro)

Balance of payments current account: net

current transfers (million euro)

of which government transfers (million euro)

**3 year backward moving average of the current

account balance relative to GDP (%)

Net inward foreign direct investment (FDI)

(million euro)

Foreign direct investment (FDI) abroad (million

euro)

of which FDI of the reporting economy in the EU-

28 countries (million euro)

Foreign direct investment (FDI) in the reporting

economy (million euro)

of which FDI of the EU-28 countries in the

reporting economy (million euro)

**Net international investment position, relative

to GDP (%)

Year on year rate of change in gross inflow of

remittances (in national currency) from migrant

workers (%)

Public finance

***General government deficit / surplus, relative

to GDP (%)

***General government gross debt relative to

GDP (%)

Total government revenues, as a percentage of

GDP (%)

Total government expenditure, as a percentage

of GDP (%)

Financial indicators

Gross foreign debt of the whole economy,

relative to GDP (%)

Gross foreign 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)

Interest rates: day-to-day money rate, per

annum (%)

Lending interest rate (one year), per annum (%)

Deposit interest rate (one year), per annum (%)

Euro exchange rates: average of period (1 euro

= … national currency)

Trade-weighted effective exchange rate index

(2005 = 100)

Note

2002

-104

-890

-23

154

655

661

2010

-516

-1 742

176

982

370

11.4

331.1

37.4

1.0

368.5

217.9

10.2

-0.2

2011

-658

-2 047

256

111

1 021

329

12.0

387.0

5.0

0.0

392

205.3

2.9

0.1

2012

-380

-2 050

324

154

1 193

402

11.4

213.3

15.8

5.2

229.1

123.2

5.0

3.6

2013

-339

-1 996

312

122

1 222

342

9.5

250.2

30.0

21.5

280.2

172.2

7.0

2.5

2014

-437

-2 059

336

114

1 172

292

7.4

123.8

27.3

10.1

151.2

92.5

5.5

11.7

Note

2002

6.2p

0.0

2010

6.1e

26.8

28.9

2011

5.3e

27.1

28.8

2012

8.3e

30.4

29.0

2013

9.0e

26.8

28.2

2014

Note

2002

998

1 126

2010

31.2

1 459

14.63

3.70

2011

29.7

1 698

14.14

3.49

2012

30.0

1 763

13.42

3.57

2013

30.2

1 806

12.36

3.39

2014

32.3

1 882

10.70

1.07

kom (2015) 0611 - Ingen titel

Value of reserve assets (including gold) (million

euro)

External trade in goods

Value of imports: all goods, all partners (million

euro)

Value of exports: all goods, all partners (million

euro)

Trade balance: all goods, all partners (million

euro)

Terms of trade (export price index / import price

index * 100) (number)

Share of exports to EU-28 countries in value of

total exports (%)

Share of imports from EU-28 countries in value

of total imports (%)

Demography

Crude rate of natural change of population

(natural growth rate): number of births minus

deaths (per thousand inhabitants)

Infant mortality rate deaths of children under one

year of age (per thousand live births)

Life expectancy at birth: male (years)

Life expectancy at birth: female (years)

Labour market

Economic activity rate for persons aged 20–64:

proportion of the population aged 20–64 that is

economically active (%)

*Employment rate for persons aged 20–64:

proportion of the population aged 20–64 that are

in employment (%)

Male employment rate for persons aged 20–64

(%)

Female employment rate for persons aged 20–

64 (%)

Employment rate for persons aged 55–64:

proportion of the population aged 55–64 that are

in employment (%)

Employment by main sectors

Agriculture, forestry and fisheries (%)

Industry (%)

Construction (%)

Services (%)

People employed in the public sector as a share

of total employment, persons aged 20–64 (%)

People employed in the private sector as a

share of total employment, persons aged 20–64

(%)

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 0–2) (%)

Unemployment rate for persons (aged 25–64)

Note

2002

585

2010

2 158

296

-1 862

125

45.5

41.0

491

2011

2 437

306

-2 131

45.5

41.5

760

2012

2 462

267

-2 195

41.1

42.6

724

2013

2 421

272

-2 148

43.5

44.7

746

2014

2 538

325

-2 214

107

30.2

42.6

Note

2002

2010

2011

11.4p

2012

11.3

2013

11.9

2014

13.3

11.2

Note

2002

8.8

2010

12.1e

68.0e

71.9e

2011

11.4

74.1

79.4

2012

42.5

5.5

74.2

79.4

2013

46.4

6.6

74.2

79.5

2014

47.7

29.7

33.0

31.3

18.4

46.6

12.4

25.8

51.5

14.9

30.8

48.4

14.5

29.8

10.3

17.2

11.2

61.3

4.6

19.0

9.5

65.0

5.9

16.8

11.4

64.1

2.6

17.7

10.9

67.2

31.4s

68.6s

55.0

45.2

74.5

77.7

26.0

30.9

28.1

40.0

55.3

18.5

30.0

26.9

38.8

55.9

20.7

35.3

33.1

41.6

61.0

26.1

kom (2015) 0611 - Ingen titel

having completed tertiary education (ISCED 5 &

6) (%)

Social cohesion

Average nominal monthly wages and salaries

(national currency)

Index of real wages and salaries (index of

nominal wages and salaries divided by the

inflation index) (2000 = 100)

GINI coefficient — see definitions

Poverty gap

*Early leavers from education and training:

proportion of the population aged 18–24 with at

most lower secondary education who are not in

further education or training (%)

Standard of living

Number of passenger cars relative to population

size (number per thousand population)

Number of mobile phone subscriptions relative

to population size (number per thousand

population)

Infrastructure

Density of railway network (lines in operation per

thousand km²)

Length of motorways (kilometres)

Innovation and research

Public expenditure on education relative to GDP

(%)

*Gross domestic expenditure on R&D relative to

GDP (%)

Percentage of households who have internet

access at home (%)

Environment

Energy intensity of the economy (kg of oil

equivalent per 1 000 euro GDP at 2005 constant

prices)

Electricity generated from renewable sources

relative to gross electricity consumption (%)

Road share of inland freight transport (based on

tonne-km) (%)

Energy

Primary production of all energy products

(thousand TOE)

Primary production of crude oil (thousand TOE)

Primary production of hard coal and lignite

(thousand TOE)

Primary production of natural gas (thousand

TOE)

Net imports of all energy products (thousand

TOE)

Gross inland energy consumption (thousand

TOE)

Electricity generation (thousand GWh)

Note

2002

2010

2011

2012

2013

2014

Note

2002

2010

90.6p

442.3

2011

111.2e

543.7

2012

111.3

532.5

2013

125.0

2014

158.0

487.8

Note

2002

2010

30.3

2010

3.8

2011

30.6

2011

4.1

2012

30.6

2012

4.0

2013

31.0

2013

2014

31.0

2014

4.4

Note

2002

Note

2002

2010

2011

2012

2013

2014

Note

2002

5 528

3.2

2010

7 960

5.5

2011

8 212

5.7

2012

8 028

5.9

2013

8 219

6.2

2014

7 204

5.3

kom (2015) 0611 - Ingen titel

Agriculture

Agricultural production volume index of goods

and services (at producer prices) (previous year

= 100)

Utilised agricultural area (thousand hectares)

Livestock numbers: live bovine animals

(thousand heads, end of period)

Livestock numbers: live swine (thousand heads,

end of period)

Livestock numbers: live sheep and live goats

(thousand heads, end of period)

Production and utilisation of milk on the farm

(total whole milk) (thousand tonnes)

Harvested crop production: cereals (including

rice) (thousand tonnes)

Harvested crop production: sugar beet

(thousand tonnes)

Harvested crop production: vegetables

(thousand tonnes)

Note

2002

2010

2011

2012

2013

2014

319

110

116

396

135

242e

357e

51e

229e

431e

239e

243e

362e

51e

247e

435e

247e

276

314

123

442

117

295

321

160

540

185

258p

235p

199p

: = not available

b = break in series

e = estimated value

p = provisional

s = Eurostat estimate

* = 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:

2011: data are based on 2011 census data and estimates that the Kosovo agency of statistics (KAS) have for 3 northern

municipalities who did not participate in the census and natural growth for the period April 15–31 December 2011.

Population figures were revised after GDP publication. These changes will be included in the annual publication of GDP (in

November 2015).

2010–14: based on balance of payments manual edition 6 (BPM6).

2010–13: the value of GDP is obtained from the Medium Term Expenditure Framework 2014–2016 (April 2013).

Includes disbursement fee charged by banks.

Thousand tonnes.