2014 Report

Accompanying the document
Enlargement Strategy and Main Challenges 2014-2015 {COM(2014) 700 final


....Serbia participates in the following EU programmes: the Seventh Research Framework Programme, Progress, the Competitiveness and Innovation Framework Programme, Culture, Safer Internet, Lifelong Learning, Europe for Citizens, Customs and Fiscalis......

1.4. Normalisation of relations between Serbia and Kosovo*
*This designation is without prejudice to positions on status, and is in line with UNSCR 1244/99 and the ICJ Opinion on the Kosovo declaration of independence.

….As concerns the north of Kosovo, a development fund has been set up to collect revenue at the northern crossing points. It has received over € 2.9 million to date, but its board has yet to decide on its use….
…..Implementation of other agreements has continued, albeit at a slower pace. Regarding IBM, the six joint interim crossing points have continued to be operational and technical agreements on the exact locations and on draft layouts of the permanent IBM crossing points were reached. However, illegal crossing roads/ by-passes, in particular in the north of Kosovo, continue to be regularly used to smuggle substantial amounts of goods, as reported by EULEX. Additional measures need to be taken by Serbia to stop illegal crossings.
….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, leading to irreversible changes on the ground. However, progress has slowed down. Early general elections were held in both Serbia and Kosovo. New momentum needs to be generated to tackle key outstanding issues and open a new phase in the normalisation of relations. Progress in this area remains essential for advancing the European future of both Serbia and Kosovo.
….Regional cooperation and good neighbourly relations form an essential part of Serbia’s process of moving towards the EU. Serbia has continued to actively participate in regional initiatives, such as the South-East Europe Cooperation Process, the Regional Cooperation Council and the Central European Free Trade Agreement.

 4.7. Chapter 7: Intellectual property law

…..As concerns enforcement, the number of requests received by the customs administration for protection of intellectual property rights increased from 205 in 2012 to 244 in 2013….. It confiscated 127 000 counterfeited and pirated products in 2013 compared to 138 000 in 2013….
…..Further alignment of legislation with the Directive on Enforcement of Intellectual Property Rights needs to be ensured. A formal coordination  mechanism for effective IPR enforcement is still missing. There are still delays in the implementation of the national IPR strategy and action plan 2011-2015…..

Little progress was made in the area of intellectual property law. Formal coordination between different stakeholders has yet to begin with a view to ensuring more effective enforcement. Overall, alignment in the area of intellectual property law is advanced.

4.14. Chapter 14: Transport policy

…..As regards rail transport….Protocols on cooperation were signed between all the relevant border services and railway companies of Serbia and Montenegro…..The River Information Services for the Danube and Sava rivers require upgrading with a remote aid to navigation (ATON) monitoring and reaction system. …..

Some progress was made in the area of transport policy, particularly on road, rail, inland waterways and aviation. Further strengthening of administrative capacity is required, in particular for enforcement and inspection. Access to the railway market has yet to be achieved. Overall, Serbia is moderately advanced in its alignment with the acquis in the area of transport policy.

4.16. Chapter 16: Taxation

....In the area of indirect taxation, the reduced value added tax (VAT) rate was increased in December 2013 from 8 to 10 %, while some items (e.g. IT equipment) passed from the reduced to the standard 20 % rate. Regarding excises, legislation on rates, movement and control, excise warehouses, storage and the concept of taxpayer remains to be aligned. The same applies to current rules and exemptions on specific energy resources. Finally, imported spirits remain taxed at higher level than comparable spirits which are frequently produced in Serbia.

….Serbia should continue to align its rules concerning excise goods, including on imported spirits, with those in the acquis…..Overall, preparations in the area of taxation are moderately advanced.

4.23. Chapter 23: Judiciary and fundamental rights

 Anti-corruption policy

…..Implementation of the strategy and action plan for 2013-2018 has yet to mirror the strong political impetus to fight corruption. Several measures have been delayed. An efficient mechanism for monitoring implementation of the anti-corruption strategy and action plan needs to be ensured. Adequate resources and human capacities for implementation of the Strategy and action plan need to be allocated…… Transparency of public procurement procedures has improved with the use of the upgraded public procurement portal. New requirements introduced by the Law on Public Procurement and the national strategy and action plan for the fight against corruption remain to be fully implemented. Comprehensive risk analyses for areas vulnerable to corruption such as health, construction, privatisation and education, justice and law enforcement are needed.……Internal control departments lack equipment, resources and human capacity….
.... Law enforcement bodies and prosecution need to become more proactive. Lack of internal capacity and expertise in financial investigations and asset recovery, together with a lack of technical equipment for special investigative measures, hamper the effectiveness of investigations. Interinstitutional cooperation between law enforcement agencies has improved to a certain extent, but needs to be developed further. The independence of all investigative and judicial bodies dealing with investigations into corruption needs to be strengthened….
…..…The comprehensive review of the criminal code being conducted to ensure that corruption and economic crimes are precisely defined and can be effectively investigated and processed needs to be completed without delay. The criminal code needs further amendment in this respect….
…As regards access to information and protection of personal data…The legal framework remains to be fully aligned with EU standards. Video surveillance, biometrics, the security of data on the internet, and the processing and protection of sensitive data, especially by some new professions such as bailiffs or notaries as well as direct marketing, must comply with EU data protection legislation. The power to acquire data from electronic communications in criminal cases remains to be brought in line with data protection rules. No progress was made in adopting the action plan to protect personal data.

Limited progress was made in the area of the judiciary and fundamental rights…..Despite strong political impetus to fight corruption, corruption remains prevalent in many areas and continues to be a serious cause of concern. The implementation of the strategy on the fight against corruption has not yet yielded concrete results……Recent strengthening of institutional coordination and leadership, including the setting-up of a monitoring mechanism, has yet to produce effective results.….The legal framework on data protection remains to be aligned with the EU acquis.

4.24. Chapter 24: Justice, freedom and security

.....Serbian authorities continued to be proactive overall with regard to fighting irregular migration…..Better coordination is required among all institutions involved in tackling irregular migration, in particular at local level.…..As regards external borders and Schengen, ……A risk analysis system has yet to be established in order to enhance control of the borders. Inter-agency cooperation between the bodies operating at the borders needs to improve as there is a lack of coordination between border police, customs and phytosanitary services. The activities of the coordinating body for implementing the Integrated Border Management need to be strengthened…… The unimpeded cross-border traffic through unauthorised alternative crossing places — in particular with Bosnia and Herzegovina — remains an issue that needs to be urgently addressed. All border crossing points need to be connected to the Interpol database and the smaller crossing points modernized…..
…..As part of the dialogue on the implementation of the IBM protocol, all six interim IBM BCPs with Serbia/Kosovo are operational and technical agreements on the exact locations and on draft layouts of the permanent IBM crossing points were reached….
...Good international and regional cooperation in the field of drugs…. However, the operational capacity of police and customs needs to be stepped up….. A solid track record of drugs seizures remains to be established….
…..Concerning customs cooperation (see also Chapter 29 — Customs union), Serbia’s customs administration continues to cooperate with agencies from neighbouring countries and to take part in international activities concerning the fight against illegal trade in and smuggling of narcotics, oil and cigarettes. The investigative powers of the custom officers and the scope for exchanging data with other agencies at the border need to be broadened.

Overall, Serbia made limited progress in the area of justice, freedom and security. Migration management and asylum policies need to be significantly and urgently strengthened and asylum procedures need to be streamlined…..A risk analysis system has to be established in order to enhance control of the border. Additional efforts are needed to increase the interagency cooperation between the services operating at the country’s borders. Across the board, efforts are needed to align with the EU acquis, to increase efficiency, foster specialisation and ensure better operational cooperation between the judiciary, law enforcement and non-law-enforcement bodies.

4.27. Chapter 27: Environment and climate change

….As regards nature protection, legislation implementing the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) has been updated to include protected species listings. Important seizures of illegally traded endangered species were made. The capacity of the CITES unit and that of enforcement agencies needs to be enhanced to keep up with the challenges of illegal wildlife trade….

…..Regarding climate change…. An implementing law was adopted in December on reducing consumption of ozone-depleting substances, establishing a licensing and reporting system and a recovery and recycling scheme in accordance with the Montreal Protocol and relevant EU legislation. Legislation on fluorinated greenhouse gas management and on conditions for issuing licences to import and export such gases entered into force in January.

….Efforts under way to strengthen inspection and enforcement need to be accompanied by the removal of inconsistencies and gaps in legislation that prevent effective enforcement…..

4.28. Chapter 28: Consumer and health protection

…..In the area of tobacco control, amendments were made to the Law on Tobacco, focusing on measures against illicit tobacco trade and labelling of tobacco products, and on increasing the relevant fines. No progress was made in the preparation of a new strategy and action plan on Tobacco control.


There has been some progress in the area of consumer and health protection. The new law on consumer protection has been adopted. The overall financial sustainability of the public health system needs to be strengthened. Overall, preparations in these areas remain moderately advanced……

4.29. Chapter 29: Customs union

As regards customs legislation, the customs tariff nomenclature was aligned with the 2014 EU Combined Nomenclature and the liberalisation schedule under the Stabilisation and Association Agreement implemented in November 2013. However, the Law on the Customs Service remains to be adopted. In the framework of CEFTA, since April 2014, Serbia, Albania, Montenegro and the former Yugoslav Republic of Macedonia started applying the regional Convention on Pan-Euro-Med Preferential Rules of Origin. The legislation on cash controls, cultural goods and duty relief on imports of new production equipment needs to be aligned with the acquis. Legislation on customs-related security initiatives and authorised economic operators remains to be implemented.

As regards administrative and operational capacity, the customs administration continued to strengthen its administrative capacity for effective enforcement of customs legislation. Integrity procedures for customs officials were applied by initiating 25 disciplinary procedures against 30 customs officers for serious violation of official duty and completing another 22 disciplinary procedures. The number of companies making use of simplified customs or approved exporter procedures increased. Work to establish a functioning interconnected IT system has started. Intelligence messages are exchanged with other state bodies and international organisations. In 2013, around 65 % of right holders used customs’ web application to submit their requests for protection of intellectual property rights. A new centralised system for the management of bank guarantees has been established and the core IT system is being reorganised from a decentralised to a centralised system, enabling the implementation of the New Computerised Transit System (NCTS) upon accession to the Common Transit Convention, as planned for 1 June 2015. The customs declaration processing system needs to be upgraded and the customs laboratory further equipped. The administration improved communication with the public.

In June 2014, Serbia and Moldova signed an Agreement on Cooperation and Mutual Assistance.
In 2013, in technical dialogue between Serbia and Kosovo, the parties agreed to automatically exchange electronic pre-arrival data related to customs declarations for consignments intended to cross the administrative border/boundary line. The collection of customs duties started at the joint crossing points between Serbia and Kosovo in December 2013. As part of the dialogue on the implementation of the IBM protocol, all six interim IBM BCPs with Serbia/Kosovo are operational and technical agreements on the exact locations and on draft layouts of the permanent IBM crossing points were reached. However, the administrative border/boundary line between Kosovo and Serbia remains vulnerable to illicit activities.


There has been some progress in the area of the customs union. However, further efforts are needed to complete alignment in a number of key areas. The customs administration is steadily strengthening its administrative capacity, but further efforts are needed. The customs declaration processing system remains to be upgraded. Overall, preparations in the area of the customs union are on track.

4.30. Chapter 30: External relations

…..The Law on Trade in Dual-Use Goods, adopted in November 2013, further aligned procedures and controls with the relevant acquis. Two rulebooks were adopted later in February. They ensured further coherence with regard to the acquis on trade in dual-use goods. Serbia would benefit from joining some of the international bodies in charge of overseeing the national export control systems (the ‘Multilateral Export Control Regimes’)….

…..As concerns bilateral agreements with third countries, Serbia is negotiating a free trade agreement (FTA) with Ukraine…..

Limited progress has been made in the field of external relations. Preparations for accession to the WTO are well advanced but move slowly in the final phase. Overall, preparations in the area of external relations are moderately advanced.

4.31. Chapter 31: Foreign, security and defence policy

….Regarding non-proliferation, in October 2013 Serbia adopted a new law on dual-use goods, partially fulfilling the preconditions for joining the Wassenaar Arrangement on export controls for conventional arms and dual-use goods and technologies. Its 2008 application to join the Wassenaar Arrangement now remains dependent on the adoption of a new law on trade of arms and military equipment. The ratification of the Additional Protocol to the Nuclear Non-Proliferation Treaty is still pending. Serbia signed the UN Arms Trade Treaty in August 2013….. 

…. Legislation on the tracking mechanism for the implementation of EU restrictive measures has yet to be adopted. Overall, preparations in this field are on track.

4.33. Chapter 33: Financial and budgetary provisions

There were no developments in the areas of traditional own resources, the value added tax-based resource and the gross national income-based resource. (For developments in the underlying policy areas, see Chapters 16 — Taxation; 18 — Statistics; 29 — Customs union; and 32 —Financial control.)

As regards administrative infrastructure, administrative capacity of the institutions in charge in the policy areas affecting the correcting application of the own resources rules needs to be further strengthened and developed. The coordinating agency necessary to ensure correct calculation, accounting, forecasting, collection, payment and control of own resources still needs to be established. Instruments to fight and reduce tax evasion and fraud and to reduce the informal economy need to be further developed and strengthened.


No progress can be reported on financial and budgetary provisions. The coordinating body required under the own resources scheme still needs to be established. Overall, preparations in this area are at a very early stage.   


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