2020 Report

Serbia has some level of preparation to apply the EU acquis and the European standards in this area. Very limited progress was made overall….Overall, corruption remains an issue of concern….

Fight against corruption

Serbia has some level of preparation in the fight against corruption. Limited progress has been made in implementing last year’s recommendations.

Serbia should:…  effectively implement the law on the prevention of corruption in line with the EU acquis, international agreements and Council of Europe’s Group of States against Corruption (GRECO) recommendations, in order to strengthen the agency’s role as a key institution in a more effective fight against corruption;  adopt a new anti-corruption strategy underpinned by a credible and realistic action plan as well as an effective coordination mechanism.

Institutional framework

Prevention measures

… The situation in the sectors particularly vulnerable to corruption (i.e. sectors where there is substantial public expenditure involved, or alternatively sectors where there is direct contact with the public) remains largely unchanged. These include public procurement, infrastructure projects, healthcare, education, construction and spatial planning, and public companies. There are still no tangible improvements in relation to the transparency and corruption risk assessments and mitigation in these fields.

Legal framework

Serbia is a party to all international anti-corruption conventions. The legal framework for the fight against corruption is broadly in place. The law on the prevention of corruption enters into force in September 2020….

Chapter 24: Justice, freedom and security

Serbia has some level of preparation to implement the EU acquis on justice, freedom and security. Some progress was made on last year’s recommendations…It also continued to effectively implement the integrated border management strategy and its action plan.

In the coming period, Serbia should in particular: ... continue increasing border controls, especially border surveillance including identification and registration measures in full respect of fundamental rights, and increase efforts to detect and prevent smuggling of migrants…

Schengen and external borders

Institutional set-up and legal alignment

…The agreement on cooperation in the field of integrated border management and the protocol on the exchange of data and information between the services involved in integrated border management (IBM) were signed.

Implementation and enforcement capacity

Serbia has made further progress in implementing its IBM strategy and its related action plan. Joint controls were introduced at the border crossing point Preševo-Tabanovce at the border with North Macedonia. Equipment and infrastructure at border crossing points was improved in Bajmok, Gostun, Kotroman, Sot, Nakovo and Morava Airport. Video surveillance was improved at some at border crossing points and traffic-monitoring cameras were installed, which provide citizens with real time information on the situation at border crossings. An electronic information exchange platform to be used by all IBM agencies is being set up.

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

Chapter 29: Customs union

Serbia is at a good level of preparation in the area of customs union. Limited progress was made on the adoption of several by-laws to the customs law and to the law on customs services. However, further efforts are needed to fully address last years’ recommendations, which therefore remain valid.

In the coming year, Serbia should in particular:

→further upgrade the customs processing system by integrating risk management;

→further develop the IT system of the national customs to enable integration with the EU systems.

Serbia’s customs legislation remains largely aligned with the EU acquis. The customs law and the law on customs service, adopted in December 2018, entered into force in June 2019. Related implementing legislation, aimed at further alignment with the EU acquis, has been adopted, including that on duty relief in April 2019. Serbia also took a number of measures to align with the EU acquis on drug precursors.

Serbia is a party to the Common Transit Convention, applying EU rules on transit movements. Rules on customs enforcement of intellectual property rights remain broadly in line with the EU acquis. The Regional Convention on Pan-Euro-Mediterranean preferential rules of origin is applied in Serbia. Serbia’s customs tariff nomenclature for 2019 was harmonised with the EU combined nomenclature, while legislation to align with the nomenclature for 2020 was adopted in December 2019.

Legislation on cultural goods, free zones, and security aspects still needs to be aligned with the EU acquis. Fees are still charged on lorries entering customs terminals to discharge customs obligations, which is not in line with the SAA obligations.

Concerning administrative and operational capacity, customs duty collection increased by 10.8% in 2019. The customs administration’s development plan for customs e-systems was adopted in February 2020, aiming to ensure integration with the EU system. The 2020-2024 customs administration’s business plan was also adopted in February.

Work is also ongoing on strengthening the risk management system. It is important that Serbia carries out pre-arrival/pre-departure risk-based analysis including food-safety checks consistently and across the board, and in harmonisation with the EU Customs Code. Despite ongoing work, the customs laboratory remains under-equipped.

In terms of fight against tobacco smuggling, Serbia is a party to the Protocol to Eliminate Illicit Trade in Tobacco Products since 2017, but the information on the implementation of the Protocol is still pending. Additional measures are needed to further strengthen the administrative capacity for tobacco control. 113

In the context of the outbreak of the COVID-19 pandemic, seven border crossings with neigboring countries were designated as ‘green lane’ border crossings to ensure the smooth and prioritised passage of essential goods. The initiative follows a proposal by the CEFTA Secretariat and the Secretariat of the Transport Community of 25 March 2020, based on the European Commission Communication of 23 March 2020. The green lane border crossings include 24/7 operations, including phytosanitary procedures, and electronic pre-arrival information through the System of Electronic Exchange of Data (SEED). The introduction of green lanes proved to be efficient as difficulties and long waiting hours experienced at border crossings in the early stages of the pandemic were reduced to below the target of 12 hours, although still exceeding the European Commission’s recommended limit of 15 minutes.

Chapter 30: External relations

Serbia remains moderately prepared in the area of external relations. Some progress was made on the 2019 recommendation concerning the Regional Economic Area (REA) as Serbia started with the implementation of CEFTA Additional Protocol (AP) 5 on Trade Facilitation and ratified CEFTA AP 6 on Trade in Services. The capacity to pursue key challenges in trade policy needs to be strengthened further. The 2019 recommendation on World Trade Organisation (WTO) accession remains valid.

In the coming year, Serbia should in particular:

→complete accession to the WTO by adopting an amended law on genetically modified organisms and complete remaining bilateral market access negotiations;

→further strengthen the administrative capacity of the Ministry of Trade, Tourism and Telecommunications for handling trade with the EU, CEFTA and WTO accession;

→implement actions under the multiannual action plan for the development of REA, in particular: ensure the full implementation of CEFTA AP 5 on Trade Facilitation; implement CEFTA AP 6 on Trade in Services; negotiate and conclude CEFTA AP 7 on Dispute Settlement; and adopt regional standards for International Investment Agreements and pursue the implementation of the individual reform action plan on investment.

The amendments to the law on dual use goods entered into force in November 2019. With this, Serbia abolished import control of dual use items while retaining export controls in accordance with the relevant EU legislation. In April 2019, Serbia adopted the national control list of dual-use goods aimed at fully aligning with the EU’s 2018 Regulation on setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items. The national control list of arms and military equipment, aligned with the Common Military List, was adopted in May 2019. Serbia’s 2009 application to join the Wassenaar Arrangement is still under consideration, as well as the 2017 application to the Australia Group….Serbia continued its participation in CEFTA. The ongoing efforts in implementing AP 5 should continue, in particular based on the decisions of the CEFTA Joint Committee on authorised economic operators, fruits and vegetables, and risk management strategy for customs. Serbia ratified AP 6 on Trade in Service in February 2020 and should now proceed with its implementation….Regarding bilateral agreements with third countries, Serbia signed a free trade agreement (FTA) with the Eurasian Economic Union (EAEU) on 25 October 2019. The agreement was ratified in February 2020 but will enter into force only once ratified by all parties. Serbia had pre-existing FTAs with three members of the EAEU (Russia, Belarus and Kazakhstan), thus expanding the agreement only to Armenia and Kyrgyzstan. The scope of the agreement is widened through minimally extended tariff concessions on goods, an annex on rules of origin and new provisions on dispute settlement. The FTA includes an exit clause, which guarantees that Serbia can denounce the agreement upon accession to the EU. The negotiations of a free trade agreement with Ukraine are ongoing….