COMMISSION STAFF WORKING DOCUMENT Serbia 2019 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 2019 Communication on EU Enlargement Policy

 

1.2. Summary of the report

As regards its ability to assume the obligations of membership, Serbia has continued to work towards aligning its legislation with the EU acquis across the board. Adequate financial and human resources and sound strategic frameworks will be crucial for the pace of reforms. Serbia has a good level of preparation in some areas such as company law, intellectual property, transport policy, science and research, education and culture, and customs.

Regarding the normalisation of relations with Kosovo, Serbia has remained engaged in the dialogue and showed restraint in its response to the introduction of the customs tariffs. Serbia has yet to address the issue of re-located Serbian administrative customs structures with Kosovo denomination that operate from within Serbia, and to cease the issuance of documentation or affixing of stamps with denomination that contravenes the related agreement.

Chapter 7: Intellectual property law

Serbia has a good level of preparation on intellectual property rights. There has been some
progress with the adoption of the amendments to the law on patents and adoption of a new strategic framework for 2018-2022, focusing on enforcement. The Commission recommendations from 2018 were not fully implemented and remain valid.

In the coming year, Serbia should in particular:

strengthen enforcement, by improving capacities and coordination of different stakeholders.
In 2018, the number of counterfeit and pirated goods confiscated by the Market Inspectorate increased, as well as the number of requests submitted to it by economic operators. The number of the customs officers specialised in intellectual property protection decreased slightly to 14. The number of items detained by the customs administration decreased while the number of items destroyed increased. In April 2018, the customs administration put into operation the electronic database regarding the protection of IPR at the borders, in accordance with the new customs law.

In October 2018, the government adopted a new strategic framework for intellectual property rights (IPR) for the period 2018-2022, which focuses on enforcement. IPR legislation has yet to be aligned with the EU Directive on the enforcement of intellectual property rights. The permanent coordination body for the enforcement of IPR did not meet in 2018. Its working groups were only active as regards the new strategic framework. They did not carry out any awareness raising activities or information exchange for IPR enforcement. Coordination among different institutions involved in IPR enforcement requires further strengthening, notably through adequate IT infrastructure.


Chapter 16: Taxation

Serbia is moderately prepared in the area of taxation. Some progress was made on legislative alignment, while the reform of the tax administration has slowly moved forward. Last year’s recommendations were not implemented and remain valid. In the coming year, Serbia should in particular:

® remove discrimination in the application of excise duties on imported spirits;
Legislation on indirect taxation was adopted in April 2018 and entered into force in January 2019, introducing value-added tax (VAT) reimbursement to non-established taxable persons. Based on the rulebook on the form, content and method of keeping VAT records, a new system for keeping records was introduced in July 2018. There has been no further legislative alignment with the acquis in the area of direct taxation. Despite some limited progress, public consultations carried out before the adoption of tax legislation have again been insufficient, not providing the business associations with enough time to comment and thus failing to strengthen predictability.

Chapter 23: Judiciary and fundamental rights

Serbia has some level of preparation to apply the acquis and European standards in this area. Serbia made limited progress.

In the coming year, Serbia needs in particular to make significant progress on:


® adopting and implementing a human resources strategy for the entire judiciary and establishing a uniform and centralised case management system, which in combination should lead to a measurable improvement in efficiency and effectiveness of the justice system.


Fight against corruption

Serbia has some level of preparation in the fight against corruption. Limited progress has been made.
Serbia should in particular:

® implement legislation on the Anti-Corruption Agency that needs to be compliant with the
acquis, international agreements and GRECO recommendations, in order to strengthen the
Agency’s role as a key institution in a more effective fight against corruption;

® conduct an impact assessment on its anti-corruption policy with a view to adopting a new ambitious strategy and action plan.

 

Institutional framework

Prevention of corruption

…Serbia’s institutions for preventing corruption broadly meet international standards. As regards the revision of the law on the Anti-Corruption Agency, enabling it to better assume its role as the key institution in this area, a first draft was prepared by a Ministry of Justice working group in July 2018. This draft did not fully comply with the GRECO recommendations. A second draft was published on the Ministry’s website in February 2019 further to consultations with a GRECO-affiliated expert. The government submitted a draft to parliament in early May 2019 under urgent procedure (see under Parliament on the use of urgent procedures). Parliament adopted the law on 21 May 2019. The law needs to comply with the acquis, international agreements and GRECO recommendations. Efforts are needed to empower the Agency to step up data collection in an accountable manner and its data analysis, including access to relevant databases. The Anti-Corruption Agency’s budget has increased for 2019, and the new ‘staff systematisation’ allows for 123 workplaces, as well as the contracting of 157 employees (compared to 92 workplaces and 139 employees previously).

Law enforcement

…The new Law on the organisation and jurisdiction of government authorities in suppression of organised crime, terrorism and corruption, which entered into force in March 2018, provides for specialised authorities to investigate and prosecute corruption cases. While the impact of these new structures has yet to be fully assessed, so far the institutional and technical capacity of police, prosecutors and judges remains insufficient overall and needs improvement. Internal control departments in line ministries continue to lack equipment, resources and human capacity.

 

Legal framework

...The legal framework for the fight against corruption is broadly in place.

 

 

Strategic framework

…The Anti-corruption Agency monitored the implementation of Serbia’s anti-corruption strategy and action plan for 2013-2018. Out of 177 measures to be completed by the end of 2017, the Agency found that 26% were implemented in accordance with the indicators, while 61% were deemed not implemented at all (while the remaining measures were deemed to be partially implemented). A number of steps to effectively implement and monitor this strategy and its follow-up strategy, as well as the relevant sections in the action plan for Chapter 23, have been seriously delayed.

 

Chapter 24: Justice, freedom and security

Serbia has some level of preparation to implement the acquis on justice, freedom and security….
In the coming period, Serbia should in particular:

® refrain from further diverging from the EU visa policy and take concrete steps to fully align with it, starting with those nationalities that are heavily prone to irregular migration to the EU;

…Serbia is implementing an action plan which was adopted prior to the opening of the accession negotiations on this chapter in July 2016. Serbia is in the process of revising its action plan with measures oriented towards meeting the interim benchmarks of the EU Common Position.

Schengen and external borders
Institutional set-up and legal alignment

Since the new Law on state border control entered into force in spring 2018, 11 pieces of secondary legislation have been adopted. The new law assigns the responsibility for the management of border crossing points to the Directorate for Property and thus clarifies a longstanding issue on responsibilities for planning, maintenance, and construction of border crossing points. A document on standardisation and management of border crossing points as well as staffing needs has been prepared but still needs to be adopted. Serbia also needs to step up efforts in preparing a Schengen action plan.

Implementation and enforcement capacity

….Some progress has been observed in the implementation of the integrated border management (IBM) strategy 2017-2020 and the related action plan. Inter-agency cooperation for border management (border police, customs, phytosanitary and veterinary inspections) has gained momentum with the establishment of an IBM coordination mechanism. A new agreement of all IBM agencies on joint risk analysis and an early warning system is being prepared. Instructions on information exchange between the Operational Centre of the Border Police Department and the Command Centre of the Customs Administration were adopted in October 2018. An electronic information exchange platform to be used by all IBM agencies needs to be developed.
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. Some progress was
made with the adoption of the customs law and the law on customs services.

In the coming year, Serbia should in particular:

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

® further invest into the IT system of the national customs to enable integration with the EU system.

As regards customs legislation, there is a high level of alignment with the acquis. A new customs law was adopted in December 2018 to ensure further alignment with the EU Customs Code. A new law on customs service was also adopted in December 2018, aiming to modernise the work of the Serbian customs administration. Serbia is a party to the Common Transit Convention, applying EU rules on transit movements. Rules on customs enforcement of intellectual property rights are broadly in line with the EU acquis. The Regional Convention on Pan-Euro-Mediterranean preferential rules of origin is applied in Serbia. The customs tariff nomenclature was aligned with the 2018 EU Combined Nomenclature in November 2017 and was amended twice in February and July 2018. The customs tariff nomenclature for 2019 was aligned with the EU Combined Nomenclature in November 2018. However, legislation on duty relief, drug precursors, cultural goods, free zones, and security aspects still needs to be aligned with the acquis. Moreover, fees charged on lorries entering customs terminals to discharge customs obligations are not in line with the acquis. The customs administration continued to strengthen its administrative and operational capacity. Customs duty collection continued to increase by 10% in the first 9 months of 2018. The customs administration’s IT strategy needs to be updated in line with the new business strategy and the accompanying action plan for 2017-2020. Strategic and modern management techniques, including quality assurance and change management, are lacking. Work on setting up a functional, interconnected IT system progressed, but the IT division continues to lose qualified staff. A system for retaining qualified IT engineers should be established. Significant effort and investment are needed to ensure interconnectivity and interoperability with EU IT systems. This investment needs to be appropriately budgeted over the coming years. The risk management system needs to be strengthened. Pre-arrival/pre-departure risk analysis should be conducted consistently and across the board and harmonised with the EU Customs Code. Work on strengthening the capacity of the customs laboratory is underway, but the 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.

Chapter 30: External relations

Serbia is moderately prepared in the area of external relations. Some progress was made during the reporting period, but the capacity to pursue key challenges in trade policy needs to be strengthened further. Serbia ratified the Central European Free Trade Agreement (CEFTA) Additional Protocol 5 on trade facilitation.
In the coming year, Serbia should in particular:

® complete its World Trade Organisation (WTO) accession by adopting an amended law on genetically modified organisms and complete remaining bilateral market access negotiations;

® strengthen administrative capacity in the Ministry of Trade, Tourism and Telecommunications for dealing with trade with the EU, CEFTA and WTO accession;

® implement actions under the multiannual action plan to develop a Regional Economic Area, in particular implement CEFTA Protocol 5 on Trade Facilitation, adopt and implement the pending CEFTA Protocol 6 on Trade in Services and negotiate and ensure a swift adoption of CEFTA Protocol 7 on Dispute Settlement.
….In May 2018, Serbia aligned its national control list of dual-use goods with the 2017 EU regime on exports, transfer, brokering and transit of these items. Serbia also aligned its national control list of arms and military equipment with the Common Military List in May 2018. Serbia’s 2009 application to join the Wassenaar Arrangement is still ongoing. Concerning implementation of the Regional Economic Area (REA) multiannual action plan, Serbia ratified the Additional Protocol 5 on Trade Facilitation to the CEFTA Agreement in September 2018. It is important that Serbia plays a constructive role within CEFTA to allow for the timely and smooth implementation of the REA Multiannual Action Plan.
….With regard to bilateral agreements with third countries, Serbia ratified a new bilateral investment treaty with Turkey in September 2018. In March 2019, Serbia announced the completion of its Free Trade Agreement (FTA) negotiations with the Eurasian Economic Union. Serbia is also negotiating a free trade agreement with Ukraine. Serbia needs to ensure compatibility of all its agreements on trade, investment and economic cooperation and other relevant agreements with the EU acquis.

Chapter 33: Financial and budgetary provisions

Serbia has some level of preparation concerning the specific administrative conditions for own resources, as laid down in the own resources regulations. Some progress was made in the underlying policy areas affecting the correct functioning of the own resources system.

In the coming year, Serbia should, in particular:

→ take further steps to boost the administrative capacity of the coordination group and the various institutions involved in the own resources system;

→ develop the organisational and procedural links between these institutions;

→ step up preparations to meet the specific administrative conditions for own resources, as laid down in the own resources regulations.

…There was some progress in the underlying policy areas indirectly affecting the own resources system (for progress in these areas, see Chapters 16 – Taxation, 18 – Statistics, 29 – Customs
union, and 32 – Financial control). After formally establishing the coordinating structure, there was some progress towards meeting the specific administrative conditions for own resources.

Regarding traditional own resources (TOR, mainly customs duties), a new customs law was adopted in December 2018 in line with the EU Customs Code.

….Regarding administrative infrastructure, the capacity of the institutions in charge in the relevant policy areas needs to be further strengthened. The group for the coordination and management of own resources of the EU tasked with ensuring correct calculation, accounting, forecasting, collection, payment, control and reporting on implementation of the EU’s own resources policy and rules needs to be better staffed and supported to fulfil its coordination tasks.

 

 

Serbia 2018 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

 2018 Communication on EU Enlargement Policy

 

1.2 Summary of the report

As regards its ability to assume the obligations of membership, Serbia has continued to align its legislation with the EU acquis across the board. Adequate financial and human resources and sound strategic frameworks will be crucial to maintaining the pace of reforms. Serbia has a good level of preparation in areas such as company law, intellectual property, science and research, education and culture, and customs.

Normalisation of relations between Serbia and Kosovo: Serbia has yet to address the issue of re-located Serbian administrative customs structures with Kosovo denomination that operate from within Serbia, and to cease the issuance of documentation or affixing of stamps with denomination that contravenes to the related agreement.

 

Chapter 7: Intellectual property law

Serbia has a good level of preparation on intellectual property rights. There was no progress in this area. The recommendations set out in 2016 have not been met.

These remain valid and Serbia should therefore, in particular:

….

→ further strengthen enforcement capacity and coordination of different stakeholders.

Concerning enforcement, the number of counterfeit and pirated goods confiscated by the Market Inspectorate increased significantly in 2016 and then dropped sharply in 2017 but the number of requests submitted to it by economic operators has increased. The number of items destroyed by the customs administration almost halved in 2016 and this trend continued in 2017. The number of software legality checks performed by the tax administration decreased slightly in 2016 and then increased in 2017. The number of indictments brought by the Public Prosecutors Office increased in 2016 and again in 2017. IPR legislation still needs to be aligned with the Directive on the Enforcement of Intellectual Property Rights. The permanent coordination body for the enforcement of IPR established in October 2014 did not meet in 2016. Its three working groups were active in awareness raising activities, drafting of the revised IPR strategic framework and information exchange for IPR enforcement. Coordination among different institutions involved in IPR enforcement requires further strengthening, through adequate IT infrastructure. A revised strategic framework for IPR has yet to be adopted.

 

Chapter 16: Taxation

Serbia is moderately prepared in the area of taxation. Some progress was made in legislative alignment…

In the coming year, Serbia should pay particular attention to:

→ remove discrimination in the application of excise duties on imported spirits

….

Legislation on indirect taxation, adopted in December 2016 and entering into force as of January 2018 removed the discrimination in the excise duties applied to imported coffee. However, the excise duties continue to be applied on imported spirits in a discriminatory manner, in breach of the SAA. At the end of 2016, some steps were taken to further align the law on value added tax (VAT) with the acquis, as concerns the application of VAT rules to services provided to foreign persons. From December 2017, VAT for foreigners export of personal goods valued carried on their personal luggage over EUR 100 is refunded, further aligning the legislation with the acquis.

 

 

Chapter 23: Judiciary and fundamental rights

Serbia has some level of preparation to apply the acquis and European standards in this area…

In the coming year, Serbia should in particular:

® ensure an effective implementation of the national anti-corruption strategy and action plan, including by providing effective coordination and ensuring that all key institutions have adequate capacity and resources to fulfil their remits effectively;

Fight against corruption

Serbia has some level of preparation in the fight against corruption. Some progress has been achieved, especially in adopting the amendments to the Criminal Code…

In the coming year, Serbia should in particular:

→ urgently improve the operational capacity of the institutions, allowing them to correctly implement the new legislation in this area;

→ ensure a measurable impact through the effective implementation of the national anti-corruption strategy and action plan, including by providing effective coordination and sufficient resources…

 

Institutional framework

Prevention measures

Serbia’s institutions for preventing corruption broadly meet international standards and continue to show good potential…

In December 2017, the Law on Employees in Public Services was adopted, including provisions related to conflicts of interest for this category of public employees. Integrity plans were adopted by 1 118 public sector institutions (out of 4 285) based on institutional corruption risk assessments.

 

Law enforcement

There is no secure platform for electronic data exchange or communication between the prosecution service, the police, tax and other authorities. There is still no system allowing
statistical monitoring of criminal proceedings. Internal control departments continue to lack
equipment, resources and human capacity. Reform of the inspection services was initiated to increase accountability. Effective supervision and deterrent penalties in cases of wrongdoing need to be applied consistently. The (operational) independence and accountability of all investigative and judicial bodies dealing with corruption need to be strengthened. There is a delay in introducing a team of economic forensic experts in the Public Prosecutor’s Office and in other authorities as necessary.

 

Legal framework

The legal framework for the fight against corruption is broadly in place

 

Strategic framework

The implementation of several important measures in Serbia’s anti-corruption strategy and
action plan for 2013-2018, revised in June 2016, remains behind schedule. Adequate resources and human capacity to ensure their full implementation have not yet been allocated. There is a delay in extending the competences of the inter-ministerial coordination group chaired by the Prime Minister for the implementation of the national anti-corruption strategy to cover the relevant part of the action plan for Chapter 23. Furthermore, this body still does not ensure coordinated implementation of both these action plans.

 

Chapter 24: Justice, freedom and security

Serbia has some level of preparation to implement the acquis on justice, freedom and security…

In the coming period, Serbia should in particular:

® implement its integrated border management strategy and action plan.

Serbia is implementing a detailed action plan which was adopted prior to the opening of the accession negotiations in this chapter in July 2016 and the country is in the process of revising its action plan with more realistic deadlines.

 

Schengen and external borders

The agreement on cooperation in the field of prevention and suppression of corruption at the border between the Republic Public Prosecutor’s Office, the Ministry of Internal Affairs and the Ministry of Finance was signed.

 

Customs cooperation

Regional and international customs cooperation continued, including through joint actions (see also Chapter 29 — Customs union). The investigative powers of customs officers and their ability to exchange data with other agencies need to be broadened. Training and further by-laws are needed for the implementation of the Naples II Convention upon accession, in particular on hot pursuit, cross-border surveillance and controlled delivery.

 

Chapter 29: Customs union

Serbia is at a good level of preparation in the area of customs union. Some progress was made by streamlining some customs processes. In the coming year, Serbia should in particular: → further upgrade the customs processing system by integrating risk management; → further improve the IT system of the national customs to enable integration with the EU system.

As regards customs legislation, there is a high level of alignment with the acquis. Serbia is a member of the common transit area, applying EU rules on transit movements. Rules on customs enforcement of intellectual property rights are broadly in line with the EU acquis. The Regional Convention on Pan-Euro-Mediterranean (PEM) preferential rules of origin is applied in Serbia. The customs tariff nomenclature has been aligned with the 2017 EU Combined Nomenclature. In June 2017 Serbia ratified the Protocol to the WHO Framework Convention on Tobacco Control to Eliminate the Illicit Trade in Tobacco Products. However, legislation on duty relief, drug precursors, cultural goods, free zones, and security aspects still needs to be aligned with the acquis. Moreover, fees charged to lorries entering customs terminals to discharge customs obligations are not in line with the acquis.

The customs administration continued to strengthen its administrative and operational
capacity. Customs duty collection continued to increase by 6.8 % in 2016 and by 8.8 % in 2017. Since the successful launch of common transit operations in February 2016, the number of transit declarations issued by the customs administration has been rising by 13 % in 2016 and by 17 % in 2017. The customs administration’s new business strategy and the accompanying action plan 2017- 2020 were adopted in November and December 2017, respectively. Strategic and modern management techniques, including quality assurance and change management, are lacking. The IT strategy also needs to be updated. Work on setting up a functional, interconnected IT system progressed, but the IT division continues to lose qualified staff. A system for retaining qualified IT engineers should be established. Significant effort and investment are needed to ensure interconnectivity and interoperability with EU IT systems. The risk management system needs to be strengthened. Pre-arrival/pre-departure risk analysis should be conducted consistently and across the board and harmonised with the Union Customs Code. Work on strengthening the capacity of the customs laboratory has started, but the laboratory needs to be further equipped.

 

Chapter 30: External relations

Serbia is moderately prepared in the area of external relations. No progress was made in
the last year and capacity to pursue key challenges in trade policy weakened.

In the coming year, Serbia should in particular:

→ urgently remove the recently imposed export restrictions on non-hazardous waste, which are not justified under the Stabilisation and Association Agreement and which point to weaknesses in administrative capacity to implement trade policy;

→ complete its WTO accession by adopting a WTO and EU acquis-compliant law on genetically modified organisms and complete remaining bilateral market access negotiations;

→ strengthen administrative capacity in the Ministry of Trade, Tourism and Telecommunications for dealing with trade with the EU, CEFTA and WTO accession, in particular view a view to implement the multiannual action plan for the regional economic area.

…Serbia aligned its national control list of dual-use goods with the latest EU regime on exports, transfer, brokering and transit of these items in May 2017… Serbia needs to continue its efforts to join the Wassenaar Arrangement.

Serbia took important commitments at the occasion of the Western Balkans Summit in Trieste to implement a Multiannual Action Plan for the development of a Regional Economic Area (REA) in the Western Balkans. The implementation of the action plan will allow the deepening and widening of economic integration within the region, based on EU rules and standards. It is important for Serbia to play a constructive role within CEFTA to allow for the timely and smooth implementation of the REA Multiannual Action Plan.

As concerns bilateral agreements with non-EU countries, Serbia completed negotiations on further liberalisation of trade with Turkey under the existing bilateral free trade agreement. Serbia is still negotiating a free trade agreement with Ukraine…

 

Chapter 33: Financial and budgetary provisions

Serbia is at an early stage of preparations in this area. A group for the coordination and management of the EU’s own resources has been set up. Some progress was made in the underlying policy areas affecting the correct functioning of the own resources system. In the coming year, Serbia should, in particular;
→ take further steps to boost the administrative capacity of the coordination group and the various institutions involved in the own resources system;

→ develop the organisational and procedural links between these institutions.

There was some progress in the underlying policy areas indirectly affecting the own resources system (for progress in these areas, see chapters 16-Taxation, 18-Statistics, 29-Customs union and 32-Financial control). There was some progress towards meeting the specific administrative conditions for own resources, in particular formally establishing the coordination structure.

Regarding traditional own resources, higher collection of customs duties was recorded in 2016 and the upward trend continued in 2017…

Regarding administrative infrastructure, the capacity of the institutions in charge in the relevant policy areas needs to be further strengthened. A group for the coordination and management of own resources of the EU tasked with ensuring correct calculation, accounting, forecasting, collection, payment, control and reporting on implementation of the EU’s own resources policy and rules has been established in the Ministry of Finance.

  

COMMISSION STAFF WORKING DOCUMENT

Serbia 2016 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 2016 Communication on EU Enlargement Policy

 

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.

…Regarding the normalisation of relations with Kosovo, Serbia remained committed to the implementation of the agreements reached in the EU- facilitated dialogue. Progress was limited, also due to the electoral process in Serbia and the domestic situation in Kosovo. However, momentum was regained in August 2016 with the start of the work on the Mitrovica bridge and freedom of movement. Continued efforts are needed to implement the agreements already reached with Kosovo. The steps taken should have a positive and concrete impact on the everyday life of citizens in both Serbia and Kosovo.

….On IBM, while the interim crossing points are fully operational, there has been no progress in establishing the three permanent crossing points to be hosted by Serbia. 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 close illegal crossings…

Chapter 7: Intellectual property law

Serbia has a good level of preparation as concerns alignment of intellectual property rights with the acquis. No progress was made. In the coming period, just as in 2015, Serbia should in particular: → further align its law on copyright, topographies of semiconductor products, patents and trademarks with the acquis, including with the IPR Enforcement Directive; → further strengthen formal coordination of different stakeholders on enforcement.

…On enforcement, the number of counterfeit and pirated goods confiscated by the Customs Administration and Market Inspectorate in 2015 was almost half the number in 2014……The IPR legislation still needs to be aligned with the Directive on the Enforcement of Intellectual Property Rights. The permanent coordination body for the enforcement of IPR became largely operational. A revised IPR strategic framework is needed.

 

Chapter 16 Taxation

Serbia is moderately prepared in the area of taxation. Some progress was made in aligning legislation with the acquis and in implementing the reform of the tax administration. In the coming period, Serbia should in particular:  → remove discrimination in the application of excise duties on imported spirits and coffee…

…On indirect taxation, limited steps were taken in aligning the law on Value Added Tax (VAT) and the law on excise tax with the acquis. The discriminatory application of excise stamps on imported alcohol was removed. However, excise duty continues to be applied in a discriminatory manner to imported spirits and coffee…..

Chapter 18 Statistics

Serbia is moderately prepared in statistics. Good progress was made in the past year, notably in further aligning sectoral statistics with the EU acquis.

….With regard to structural business statistics data coverage is not yet in line with the EU acquis as a number of data are not collected. Harmonization with the EU acquis on short term statistics is progressing. For transport, road, railway, inland waterways and air transport data are collected but need to be further harmonised with the EU acquis.

Chapter 23 Judiciary and fundamental rights

Serbia has achieved some level of preparation for the acquis and European standards in this area. Some progress was made by partially addressing last year’s recommendations, and in particular in standardising court practice…. The national anti-corruption strategy has so far not yielded the expected results. Corruption remains prevalent in many areas and continues to be a serious problem...In the coming year, Serbia should in particular:…. establish an initial track record of investigation, prosecution and final convictions in corruption cases, particularly in high-level ones;

As part of the ‘new approach’ to the rule of law, and in line with the negotiating framework, this chapter was opened in July 2016 after Serbia adopted a detailed action plan.

Anti-corruption policy…..Inter-institutional cooperation, between law enforcement agencies and with the prosecution service, has improved to a certain extent but requires further strengthening…. There is no secure platform for electronic data exchange or communication between the prosecution service, the police, tax and other authorities…. Internal control departments continue to lack equipment, resources and human capacity.

Effective supervision and deterrent sanctions in cases of wrongdoing need to be applied…… The human resources policy in the public administration requires reform to ensure that calls recruitment and promotion are based on merit and professional skills. Attention needs to be given to the implementation of codes of ethics and follow-up of integrity plans in the judiciary and in the public administration…. The legal framework for the fight against corruption is broadly in place but shortcomings in the criminal code remain an issue…. The law on civil servants includes provisions on a code of conduct for civil servants and monitoring mechanisms…. The action plan required for to open the rule of law chapter 23 was adopted by the government in April 2016 and implementation started. Several important measures in the anti-corruption strategy and action plan for 2013-2018 are behind schedule, e.g. setting up efficient coordination and monitoring mechanisms. Both documents have been aligned with deadlines and actions in the national action plan…. Adequate resources and human capacity to implement the strategy and action plan have not yet been allocated…. There is an urgent need to ensure better working arrangements between the Ministry of Justice and other institutions and bodies involved in combating corruption… The action plan for the public administration reform strategy includes measures to increase accountability and transparency in the public sector with a view to combating corruption, but the reform process needs to be implemented.

Chapter 24 : Justice, freedom and security

Serbia has made some level of preparation to implement the acquis on justice, freedom and security. Some progress was made in areas such as reform of the police, border controls and organised crime with the adoption in December 2015 of the first serious and organised crime threat assessment (SOCTA) in line with Europol requirements. Serbia has been affected by the refugee and migration crisis, during which it has played an active and constructive role and cooperated with neighbouring countries and Member States while managing mixed migration flows. Serbia has been actively involved in international and regional police as well as in judicial cooperation. 66 In the coming period, Serbia should in particular: ® establish an initial track record of investigation, prosecution, final conviction as well as seizure and confiscation in organised crime cases, including money laundering, human trafficking and human/migrant smuggling; ® adopt the integrated border management strategy and implementing action plan, including databases throughout the country……

Customs cooperation ….Regional and international customs cooperation continued, including through joint actions (see also chapter 29 — Customs union). Serbia needs to ensure that the IT strategy for the customs administration is fully aligned with EU legislation on the use of technology for customs purposes and smoother information exchange at the borders. The investigative 74 powers of customs officers and their ability to exchange data with other agencies at the border need to be broadened and customs posts fully staffed. Training is needed on the implementation of the Naples II Convention, in particular on hot pursuit, cross-border surveillance and controlled delivery.

Chapter 27: Environment and climate change

Serbia has achieved some level of preparation in this area. Some progress has been made in further aligning policies and legislation with the acquis, including in waste, nature protection and climate change. Serbia improved its strategic planning and set up a Green Fund, both key recommendations in 2015. In the coming period, Serbia should in particular: → enhance administrative and financial capacity by strengthening the environmental protection agency's monitoring and reporting, adequately resourcing the new environmental finance facility (Green Fund) and improving inter-institutional coordination at both central and local level…..

 

Chapter 28: Consumer and health protection

Serbia is moderately prepared in consumer and health protection. Some progress was made, notably with the adoption of the laws on advertising and on communicable diseases. In the coming period, Serbia should in particular: → strengthen the administrative capacity of relevant authorities for consumer protection; → strengthen the overall financial sustainability of the public health system, and in particular the public health insurance fund.

 

Chapter 29: Customs union

 All Member States are part of the EU customs union and follow the same customs rules and procedures. This requires legislative alignment, adequate implementing and enforcement capacity, and access to the common computerised customs systems.

Serbia is at a good level of preparation in the area of customs union. Good progress was made on transit, which included launching common transit operations with support of the New Computerised Transit System (NCTS). In the coming period, as in 2015, Serbia should in particular: → upgrade the customs declaration processing system and integrate risk management; → further improve and modernise management of the customs administration.

As regards customs legislation, the customs tariff nomenclature has been aligned with the 2016 EU Combined Nomenclature. Legislation on cash controls and cultural goods still needs to be aligned with the acquis. Legislation on customs administration and customsrelated security initiatives have yet to be implemented. 79 The customs administration continued to strengthen its administrative and operational capacity. In 2014, a 4.5 % increase in customs duty collection was achieved. Serbia acceded to the Convention on the Simplification of Formalities in Trade in Goods and the Convention on a Common Transit Procedure in February 2016. After the successful introduction of the national NCTS, Serbia launched common transit operations in February 2016. A contract for outsourced NCTS maintenance support has been concluded. A new centralised system for the management of bank guarantees is operational. The law on the customs administration has not yet been adopted and the business strategy of the customs administration needs to be renewed. Strategic and modern management techniques, including quality assurance and change management, are lacking, and the IT strategy needs to be updated. Work on setting up a functional, interconnected IT system progressed, but the IT division continues to lose competent staff. The risk management system needs to be strengthened. The customs laboratory needs to be further equipped.

 

Chapter 30: External relations

Serbia is moderately prepared in the area of external relations. Some progress was made by activating the EU civil protection mechanism in order to help with the influx of refugees and migrants. In the coming period, Serbia should in particular: → stop applying safeguards on selected agriculture products, which are not justified under the Stabilisation and Association Agreement and which point to weaknesses in administrative capacity to implement trade policy; → strengthen implementing capacity for export controls on dual-use goods

…Serbia aligned its national control list of dual-use goods with the latest EU regime of exports, transfer, brokering and transit of dual-use items in March. Serbia needs to continue its efforts to join the Wassenaar Arrangement, which could facilitate preparations to implement the acquis for export controls on dual-use items…..As concerns bilateral agreements with non-EU countries, Serbia is still negotiating a free trade agreement with Ukraine….

Chapter 31: Foreign, security and defence policy

Serbia is moderately prepared in foreign, security and defence policy. Serbia has partially fulfilled last year’s recommendations. Some progress was made… As regards non-proliferation, Serbia ratified the Amendment to the Convention on the Physical Protection of Nuclear Material in March. The process for collecting and destroying illegally possessed weapons and ammunition needs to be finalised and the new strategy on the control of small arms and light weapons adopted. Serbia’s ratification of the Additional Protocol to the Nuclear Non-Proliferation Treaty is still pending. Serbia’s 2008 application to join the Wassenaar Arrangement continues to be dependent on the adoption of a new law on the production and transfer of arms and military equipment…..

 

Chapter 33: Financial and budgetary provisions

Serbia is at an early stage of preparation with regard to financial and budgetary provisions. Some progress was made across the board as regards the underlying policy areas effecting the good function on the OR system. In the coming year, Serbia should in particular: → take further steps to boost administrative capacity and establish the institutional body that will coordinate various institutions involved in the own resources system.

There was some progress in the underlying policy areas affecting indirectly the own resources system (for progress in underlying areas, see: chapter 16 — Taxation, chapter 18 — Statistics, chapter 29 — Customs Union, chapter 32 — Financial control). There is little 84 progress in to meet the specific OR administrative conditions in the OR legislation (traditional own resources, the value added tax-based resource and gross national income-base resource). Regarding traditional own resources, improvement in the functioning of the customs administration has led to higher collection of customs duties. Regarding administrative infrastructure, the capacity of the institutions in charge in the relevant policy areas needs to be further strengthened and developed. Additional training is needed for the institutions, including customs and tax administrations. A coordinating agency tasked with ensuring correct calculation, accounting, forecasting, collection, payment, control and reporting to the EU on the implementation of the EU’s own resources rules still needs to be set up (although some first steps have been made to start recruiting staff dealing with this task).

 

                    COMMISSION STAFF WORKING DOCUMENT
                                                      SERBIA
                                          2014 PROGRESS 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

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

 

http://ec.europa.eu/enlargement/pdf/key_documents/2014/20140108-serbia-progress-report_en.pdf

 

....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…..

Conclusion
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. …..

Conclusion
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.

Conclusion
….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.

Conclusion
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.

Conclusion
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.

Conclusion
….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.

Conclusion

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.

Conclusion

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…..

Conclusion
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….. 

Conclusion
…. 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.

Conclusion

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.

 

   

http://ec.europa.eu/enlargement/pdf/key_documents/2014/20140108-serbia-progress-report_en.pdf


 

 
 
 

 
 

 

FROM THE EUROPEAN COMMISSION'S PROGRESS REPORT ON SERBIA

 

Brussels, 16.10.2013

SWD(2013) 412 final

 

COMMISSION STAFF WORKING DOCUMENT
SERBIA
2013 PROGRESS REPORT

Accompanying the document
COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL
Enlargement Strategy and Main Challenges 2013-2014
{COM(2013) 700 final}


1.4. Normalisation of relations between Serbia and Kosovo (page 5)
…On IBM, joint interim crossing points have been opened on all six border gates and are up and
running. December’s agreement on the protection of religious and cultural heritage sites is being  mplemented. Implementation of the agreement on liaison arrangements started in June.
The two sides have also agreed to start collecting customs duties and to set up a fund for the development of northern Kosovo…
Direct high-level contacts and regular contacts at operational level continue to facilitate  ooperation, e.g. in the fight against organised crime…

2.3. Regional issues and international obligations (pages 11, 13)

…A joint contact centre for police and customs cooperation was opened in December…

4.7. Chapter 7: Intellectual property law (page 25)

…The customs administration introduced a web application for electronic exchange of information with right holders. Seizures of counterfeit goods decreased over the reporting period…

…There is still no formal coordination mechanism between the institutions in charge of IPR protection. Implementation of the national IPR strategy and action plan 2011-2015 has been delayed…

…The participation of economic operators and consumers in the prevention of counterfeiting and piracy remains limited…

Conclusion
Limited progress was made in the area of intellectual property law. Enforcement was improved, although formal coordination between stakeholders and effective implementation of the national IPR strategy remain to be ensured. The changes to the law on copyright regarding fee collection and exemptions constitute a step backwards in alignment to the EU acquis. Overall, alignment in the area of intellectual property law is advanced.

4.24. Chapter 24: Justice, freedom and security (pages 49, 50, 52)

…In the area of external borders and Schengen, the Integrated Border Management (IBM) strategy was revised in November to enhance the capacity of the coordination body for its implementation. Serbia has continued to improve the infrastructure and equipment at border crossing points by completing the installation of an immigration and case management system and increasing operational field equipment (special cameras, scanners, fingerprint capturing devices and detection devices)…Operational coordination between border police, customs and phytosanitary services needs to be improved. The connectivity of the databases from and to the biometric devices needs to be enhanced in order to support the operations of the Border Police. Analytical, communication, procedural, training and technical capabilities need to be strengthened in order to effectively counter irregular migration. Human resources’ risk analysis capacities need to be enhanced….

…Overall, Serbia continues to be moderately advanced on border management…

…As regards cooperation in the field of drugs, a new strategy for the period 2013-2020 has yet to be finalised…The country is on the main Balkans drug trafficking routes and continued and sustained efforts are needed by all involved law enforcement relevant agencies, including the customs administration, to detect and seize narcotics at the borders…
Overall, Serbia is moderately advanced regarding cooperation in the field of drugs.

Concerning customs cooperation (See also Chapter 29 — Customs union), Serbia’s customs administration engaged in joint cases with agencies from neighbouring countries and continues to take an active part in international activities concerning the fight against illegal trade in goods such as narcotics, oil and cigarettes and cross-border movement control.

However, Serbia still needs to align its legal framework with EU legislation on the use of technology for customs purposes. Overall, Serbia is moderately advanced regarding the cooperation in the field of customs.

4.29. Chapter 29: Customs union (page 57)

As regards customs legislation, the Customs Law was amended in November and was further aligned with the acquis and with national legislation, particularly with some provisions of the Budget System Law. The Serbian government amended the decree on customs tariff nomenclature in November with the aim of aligning it with the 2013 EU Combined Nomenclature and with the liberalisation schedule under the Interim Agreement.

Further harmonisation is needed in the field of customs legislation. The Law on the Customs Service remains to be adopted. An adequate legislative framework on cultural goods is missing. The provisions on cash control have yet to be aligned with the acquis. The same goes for duty relief on imports of new production equipment. Legislation on customs-related security initiatives and authorised economic operators has yet to be implemented. The Serbian parliament ratified the Pan-Euro-Med Convention on Rules of Origin.

As regards administrative and operational capacity, the Customs Administration (CAS) has continued to improve its administrative capacity to effectively enforce the customs legislation. It continued to apply integrity procedures for customs officials and to step up the fight against corruption. Post-clearance controls and risk analysis systems are implemented following the two respective strategies. Simplification of customs procedures continued and the number of companies making use of such procedures increased. Coordination between the CAS and the Ministry of Finance and Economy is strengthening. The CAS is aiming to establish a functioning IT system based on interconnectivity between various departments. Over 95% of customs declarations are submitted electronically and the concept of electronic signature has been introduced. About 17% of declarations are subject to documentary or physical inspections. The electronic application for the protection of Intellectual Property Rights is used by around 45% of the rights holders. In terms of trade facilitation, the electronic system for exchanging pre-arrival information with Bosnia and Herzegovina, Montenegro and the former Yugoslav Republic of Macedonia is functioning well.

A new border crossing on the Serbia-Hungarian border was opened in May. A big challenge remains the upgrading of the customs declaration processing system (CDPS) and the customs laboratory.

Customs procedures between Kosovo and Serbia have further progressed with the opening of joint interim crossing points in December 2012 and January 2013 at six locations, including the two crossing points in northern Kosovo, as per the IBM agreement. The establishment of these co-located crossing points has allowed daily cooperation between both administrations and regular exchange of information. On 17 January, both parties concluded an agreement for the restoration of customs controls at the two crossing points (gates 1 and 31). In the meantime, the administrative border/boundary line between Kosovo and Serbia remains vulnerable to illicit activities.

Preparations in the area of administrative and operational capacity are on track.

Conclusion
There has been some progress in the area of the customs union. The Customs Law and legislation on the tariff nomenclature were further aligned with the acquis. The CDPS system needs to be renewed or upgraded. Overall, preparations in the area of the customs union are well on track.

4.30. Chapter 30: External relations (page 58)

…As concerns bilateral agreements with third countries, Serbia is currently negotiating a free
trade agreement (FTA) with Ukraine. Serbia’s trade arrangements with the Russian Federation, Belarus and Kazakhstan were harmonised, since the three countries form a customs union…Serbia signed the Pan-Euro-Mediterranean (PEM) Convention on Rules of Origin in November…

4.33. Chapter 33: Financial and budgetary provisions (page 60)

There were no developments in the areas of traditional own resources, the VAT resource
and GNI resource.
(For progress in the underlying policy areas, see Chapter 16 — Taxation; Chapter 18 — Statistics; Chapter 29 — Customs union; and Chapter 32 — Financial control).

As concerns the administrative infrastructure, administrative capacity in the relevant policy areas needs to be strengthened. A coordinating body to ensure correct calculation, accounting, forecasting, collection, payment and control of own resources has yet to be established. The body is also required for reporting to the EU on the implementation of the own resources rules. Instruments to fight and reduce tax evasion and fraud and to reduce the informal economy also need to be further developed.

Conclusion
No progress has been made with regard to financial and budgetary provisions. A coordinating body to ensure correct calculation, accounting, forecasting, collection, payment and control of own resources has yet to be established. Overall, preparations in this field are at an early stage.

 

 

 

 

FROM THE EUROPEAN COMMISSION'S PROGRESS REPORT ON SERBIA

 

EUROPEAN COMMISSION


                                                      Brussels, 10.10.2012
                                                            SWD(2012) 333


COMMISSION STAFF WORKING DOCUMENT
SERBIA
2012 PROGRESS REPORT
accompanying the document
COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL
Enlargement Strategy and Main Challenges 2012-2013
{COM(2012) 600}

 

 

1.3. Relations between the EU and Serbia

 The Stabilisation and Association Agreement was signed, along with the Interim Agreement on trade and trade-related matters, in April 2008. It provides a framework of mutual commitments on a wide range of political, trade and economic issues. The Interim Agreement entered into force on 1 February 2010. At the 14 June 2010 Foreign Affairs Council, Ministers agreed to submit the Stabilisation and Association Agreement to their parliaments for ratification. The process is close to completion, with ratification still pending in only one Member State.

Serbia has built a positive track record in implementing the obligations of the Stabilisation and Association Agreement and the Interim Agreement on trade and trade-related matters. An interim committee and a number of sub-committees meet annually, to discuss topics including the internal market, competition, transit traffic, trade, customs, taxation, agriculture and fisheries. In general terms, Serbia is meeting its SAA/IA commitments in these areas and cooperation is progressing well.

Anti-corruption policy (See also Chapter 23 – Judiciary and fundamental rights)
Internal checks by the customs administration and the police have continued to result in a sizeable number of cases being investigated and penalties imposed.

4.7. Chapter 7: Intellectual property law

Some progress was registered in the field of enforcement. The Intellectual Property Office (IPO) conducted a large number of training events for government enforcement agencies and organised promotional activities for stakeholders. No solution has yet been found to the issue of the long-term financial sustainability of the IPO. The Customs Administration of Serbia developed its IT capacity for use in IPR protection. The level of counterfeit goods that it has seized has gone up. The administrative fee for submitting a request for intellectual property rights enforcement has been revoked, leading to an increase in requests. In the course of 2011, the Tax Administration was involved in launching three registers (of producers, of distributors and of software) in collaboration with IPR holders, with a view to facilitating its work and its checks. The Market Inspectorate of the Ministry of Foreign and Domestic Trade and Telecommunications was given the use of twelve warehouses across Serbia for the storage of counterfeit and pirated goods. The number of goods that it confiscated in the first half of 2012 significantly increased with respect to 2011.

4.24. Chapter 24: Justice, freedom and security
Concerning customs cooperation (see also Chapter 29 – Customs Union), some progress was achieved. The Customs Administration of Serbia (CAS) concluded agreements on international cooperation with Azerbaijan, Belarus and Georgia. Implementation of the integrated border management strategy and action plan has continued. The CAS engaged in joint cases with all agencies from neighbouring countries and continues to take an active part in international activities concerning the fight against illegal trade in goods such as narcotics, oil and cigarettes and cross-border movement control. However, Serbia still needs to align its legal framework with EU legislation on the use of technology for customs purposes and to ratify and implement the ‘Naples II’ Convention on mutual assistance and cooperation between customs administrations. Overall, Serbia is moderately advanced regarding the cooperation in the field of customs.

4.29. Chapter 29: Customs union

There has been good progress on customs legislation. The Serbian government amended the decree on customs tariff nomenclature in November 2011 with the aim of aligning it with the 2012 EU Combined Nomenclature and with the liberalisation schedule of the Interim Agreement. Serbia increased duty relief for postal packages in October 2011. However, the rules are still not fully in line with the acquis. The Law on the Customs Service remains to be established and the classification practice is to be upgraded to EU standards.

Legislation has been adopted on customs-related security initiatives, including authorized economic operators. This legislation remains to be implemented. A regulation on the application of measures for the protection of intellectual property rights was adopted. However, the Customs Administration of Serbia (CAS) still needs to utilise fully the electronic exchange of data with IPR holders. An adequate legislative framework on cultural goods is to be established. The provisions on cash control remain to be aligned with the acquis. Preparations in the area of customs legislation are on track.

There has been some progress concerning administrative and operational capacity. The CAS has continued to improve its administrative capacity to effectively enforce the customs legislation. It applied integrity procedures for customs officials and stepped up the fight against corruption. Post-clearance controls and risk analysis systems were further strengthened by adopting a strategy for post-clearance audit, systematisation of procedures and setting up of an electronic database of customs offenders. Auditing has been reinforced and the central customs administration has been authorised to carry out audits of individual customs offices. In December 2011, the State Audit Institution reported on faultless 2010 financial records for the CAS in December 2011.The coordination between CAS and the Ministry of Finance and Economy has also improved and new instructions have been issued on cooperation between the two entities. The CAS is establishing a fully functioning IT system based on interconnectivity between its various departments. Around 90% of customs declarations are submitted electronically and the concept of electronic signature introduced. However, the Customs Declaration Processing System (CDPS) should be renewed or upgraded and a properly equipped and functioning customs laboratory is needed.

In terms of trade facilitation, the CAS implements the system for exchanging pre-arrival information with Bosnia and Herzegovina, Montenegro and the former Yugoslav Republic of Macedonia. It continues to actively engage in international activities concerning the fight against illegal trade in goods (narcotics, oil and cigarettes) and cross-border movement control.

Customs procedures between Kosovo and Serbia have stabilised further since the adoption of two Belgrade-Pristina dialogue agreements on customs stamps and integrated border management (IBM). However, the situation at gates 1 and 31 remains complicated in terms of procedures to be applied. The Serbian side eventually signed the Implementation Protocol on IBM in September 2012, but it has yet to be implemented. In the meantime, the Administrative Border/Boundary Line (ABL) between Kosovo and Serbia remains vulnerable to illicit activities. Trade in goods between Serbia and Kosovo remains handled by the Serbian Tax Administration and its Special Department and not by the Serbian customs. This includes most excise goods. Customs procedures to guarantee the application of the acquis at the ABL with Kosovo have yet to be introduced.

Preparations in the area of administrative and operational capacity are on track.

Conclusion
Serbia made good progress in the area of the Customs Union with the adoption of new laws and sustained efforts to enhance its administrative capacity, in particular in the audit and postclearance sector. Coordination between the customs administration and the Ministry of the Economy and Finance in charge of customs policy needs to be further improved. Serbia also needs to ensure the proper application of the acquis at the ABL with Kosovo. Customs related security legislation should be implemented and the CDPS system renewed or upgraded.

Overall, preparations in the area of the Customs Union are well on track.

 


 

 

ANALYTICAL REPORT
Commission Opinion on Serbia's application for membership of
the European Union 3.29. Chapter 29: Customs Union

The EU acquis in this sector consists of the Community Customs Code and its implementing provisions, the EU's Combined Nomenclature (CN), the Common Customs Tariff including trade preferences, tariff quotas and tariff suspensions and other customs-related legislation outside the scope of the Customs Code. Member States must ensure that the necessary implementing and enforcement capacity, including links to the relevant EU computerized customs systems (tariff-related systems, NCTS, ECS, ICS, etc.) are in place. The customs authorities must also ensure adequate capacity to implement and enforce special rules laid down in related areas of the EU acquis such as on external trade, health and security.

The Interim Agreement establishes a free-trade area with the EU and the progressive removal of customs duties on a wide range of products. It places an obligation on Serbia to adopt the Combined Nomenclature. It also provides for administrative cooperation on customs matters and lays down rules of origin which have to be observed in order for EU and Serbian operators to benefit from the trade preferences. In addition, it paves the way for gradual approximation of the Serbian customs legislation to the EU acquis.

In terms of customs legislation, Serbian law is largely aligned with the EU acquis. The Customs Law adopted in March 2010 is basically harmonised with the EU Customs Code. In January 2011, the relevant implementing legislation entered into force. The Combined Nomenclature (CN) is applied and the classification rules are largely in line with the EU acquis. However, classification practice, including decisions on binding tariff information, is still to be upgraded to EU standards.

In June 2011 Serbia also abolished administrative customs fees for regular activities, thereby bringing the system into line with the requirements of the Interim Agreement and the EU acquis. Preferential tariff quotas are managed by the Information System of Customs Services (ISCS) on a first-come, first-served principle on a daily basis. The country does not apply erga omnes tariff quotas or tariff ceilings and lacks an automated system for collecting statistics. The system of autonomous suspensions and tariff quotas needs to be brought into line with the provisions applied in the EU.

Serbia implements preferential rules of origin and methods of administrative cooperation that largely reflect those used by the EU in its free-trade agreements. Furthermore, it applies diagonal cumulation with the EU and other countries subject to the European Union Stabilisation and Association Process. The status of approved exporter also exists. Serbia complies with EU law on customs value.

The national legislation on duty relief is well harmonised with the EU acquis, but some discrepancies still exist, notably the rules on duty relief for equipment imported by, and for, passengers or the monetary threshold for duty relief and the rates for simplified declaration.

Serbia is observer in the Common Transit Convention and intends to join it once all the legal and technical requirements are met. The Customs Administration needs to encourage further use of simplified customs procedures in the framework of specific authorisations.
The legislation on customs-related security initiatives, including authorised economic operators, has been adopted, but implementing provisions are missing. Post-clearance controls and the risk analysis systems have been relatively successful over the last year, but need to be used more frequently for systematic planning and execution of ex-post controls. The risk analysis capacity is also hampered by an insufficient IT system and lack of strategy. Customs perform a high percentage of physical controls but is not producing proportionate findings. Risk analysis and management need to be changed to a thematic system targeting risk control, similar to the system applied in the EU, supported by an adequate IT application.

In line with the requirements of the Interim Agreement, the Customs Administration of Serbia (CAS) has made efforts to reach the EU level of protection of intellectual property rights (IPR). It has substantially tightened up the control procedures at the border and should now further reinforce effective means of enforcement. On drug precursors, Serbia has put in place a system for pre-export notification, while on cultural goods Serbia still has to adopt legislation and apply controls in line with the EU requirements. The provisions on cash control do not meet the requirements of the EU legislation.

Concerning administrative and operational capacity, the CAS has been continually strengthening its administrative capacity for effective enforcement of customs legislation. It is well-organised and implements sound procedures and working methods allowing the competent staff to enforce the customs and related legislation sufficiently. However, there are still room for improvement. A properly equipped and functioning customs laboratory is missing and the overall operational capacity needs to be strengthened to ensure further enforcement of legislation (for example, on IPR and safety The coordination between the Ministry of Finance and the CAS needs to be better streamlined. In 2010, the CAS, in cooperation with the World Customs Organisation, initiated a pilot project on strengthening the integrity of customs officials and stepping up the fight against corruption. However, further efforts are needed in fields such as office management, the performance appraisal system, ethics and training. Moreover, the audit resources need to be reinforced and the central customs administration should be allowed to carry out audits.

In December 2010 the Customs Administration adopted a business strategy for 2011-2015. A customs IT strategy was adopted in early autumn 2011. The CAS currently uses the Information System of Customs Services (ISCS). There are plans to merge the ISCS with the Integrated Customs Tariff TARIS. Although around 90% of customs declarations are submitted electronically, data exchange for customs formalities is only partially processed through the IT system. In general, Serbia has progressed on customs computerisation and is planning future interconnectivity with EU customs IT systems. However, further upgrading of the customs IT systems is needed.

Serbia joined the Customs 2013 Programme in April 2009 and has participated regularly in activities under it ever since. Through the conclusion of agreements on international cooperation, the customs authorities share information with other foreign institutions. In terms of trade facilitation, the customs administration formalised procedures for exchanging prearrival information with neighbouring countries. Implementation of the integrated border management strategy and action plan continued (see also Chapter 24 – Justice, freedom and security ).

The customs procedures and formalities to guarantee correct application of the EU acquis need to be applied at the administrative boundary line (ABL) between Kosovo and Serbia, in particular at gates 1 and 31 to the north of Kosovo. At the ABL, insufficient controls create the risk of VAT carrousels, fraud with excises, illicit trade and imports without paying customs duties. Serbia needs to prevent this illicit trade in a way that respects that Kosovo is a separate customs territory. Impact of the modifications to VAT refund rules adopted in September 2011 in this respect as regards oil and oil derivatives, will have to be assessed.

The agreement on accepting the Kosovo customs stamps needs to be implemented in full compliance with CEFTA rules.

Conclusion

The customs legislation is almost fully aligned with the EU acquis. The obligations stemming from the Interim Agreement are being met well. The administrative and operational capacity of the Serbian Customs Administration is good. It has the administrative structures and adequate resources to implement and enforce the customs legislation and make sure that procedures and working methods are implemented effectively. However, in order to be able to address the future challenges, the Customs Adminitration will need to be reinforced, notably to increase post-clearance controls based on risk analysis, expand use of simplified procedures for reliable economic operators, step up use of the guarantee management system and upgrade interconnectivity and interoperability with the EU IT systems. Customs procedures to guarantee correct application of the EU acquis at the ABL with Kosovo have to be introduced.

Overall, Serbia is already well on the way to meeting the EU acquis and remains committed to reforms in the area of customs. If it continues its efforts, Serbia should, in the medium term, have the capacity to comply with the requirements of the EU acquis in the field of customs.

 

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 1 Regarding customs cooperation, the customs administration is established as an administrative authority within the Ministry of Finance. Serbia is currently implementing 20 bilateral agreements on mutual administrative assistance in the customs field, including with neighbouring countries. Technical arrangements on electronic exchange of customs data via the Electronic Exchange of Data System were established with the customs administrations of Bosnia and Herzegovina, Montenegro and the former Yugoslav Republic of Macedonia. In April 2010 Serbia and Bulgaria signed an agreement on establishing and operating a joint contact centre for police and customs cooperation. However, Serbia needs to align with the EU legislation on use of technology for customs purposes and to ratify and then implement the 'Naples II' Convention on mutual assistance and cooperation between customs administrations.

 


  

 



 

 

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