Revised Plan for the Implementation of Priorities Contained in the European Partnership

Republic of Serbia

The Government

(Based on Government Resolution 05 No: 018-721/2006-6 of 14 September 2006)

[COUNCIL DECISION on the principles, priorities and conditions contained in the European Partnership with Serbia (and Montenegro) including Kosovo, in accordance with United Nations Security Council Decision 1244 of 10 June 1999 and repealing Decision 2004/520/EC (2006/56/ЕC)]

Belgrade, February 2007

ABBREVIATIONS RS – Republic of Serbia HJC – High Judicial Council SNP – Serbian National Parliament NJRS – National Judicial Reform Strategy SG – Serbian Government NIJT – National Institute of Judicial Training MI – Ministry of the Interior CPC – Criminal Procedure Code (BPD – Border Police Directorate, administration body within MI) LAP – Law on Administration Procedure MFIN – Ministry of Finance LTPTA – Law on Tax Procedure and Tax Administration MFA – Ministry of Foreign Affairs ЕА – European Co-Operation for Accreditation MJ – Ministry of Justice MLA – EA Multilateral Agreement MPALSG – Ministry of Public Administration and Local Self-Government ECAA – European Common Aviation Area MAFWM – Ministry of Agriculture, Forestry and Water Management JAA – Joint Aviation Authority ME – Ministry of Economy EMS – Transmission System and Market Operator “Elektromreza Srbije“ MME – Ministry of Mining and Energy EPS – Power Generation Utility “EPS” MCI – Ministry of Capital Investment CPT – Council of Europe Committee for the Prevention of Torture MTTS – Ministry of Trade, Tourism and Services PCCAR – Project of Commercial Court Administration Reform in Serbia MIER – Ministry of International Economic Relations ALL – Agency for Liquidator Licensing MLESP – Ministry of Labour, Employment and Social Policy GOPA – Annual Operational Activity Plan MSEP – Ministry of Science and Environment Protection CEN – European Committee for Standardization (EPD – Environment Protection Directorate, administration body within MSEP) CENELEC – European Committee for Electro Technical Standardization MES – Ministry of Education and Sports SEECBT – South-Eastern Europe Cross-Border Trade MC – Ministry of Culture ЕAR – European Agency for Reconstruction MH – Ministry of Health SJIS – Serbian Justice Information System MD – Ministry of Defence WAN – Wireless Computer Network CPM – Cabinet of Prime Minister AM – Assistant Minister LM – Line Ministries SAF – Serbian Armed Forces BIA – Security and Intelligence Agency MSA – Military Security Agency RSL – Republic Secretariat for Legislation RBS – Republic Bureau for Statistics RGI – Republic Geodetic Institute SEIO – Serbian European Integration Office HRMB – Human Resourses Management Bureau HMRB – Human and Minority Rights Bureau NBS – National Bank of Serbia PKS – Serbian Chamber of Commerce IPI – Intellectual Property Institute SAB – Serbian Accreditation Body IMPM –Institute of Measurements and Precious Metals SI – Standardisation Institute RBA – Republic Broadcasting Agency CIPI – Commissioner for Information of Public Importance SCR – Serbian Commessariat for Refugees NEB – National Employment Bureau CINJRS – Commission for Implementation of the National Judicial Reform Strategy

2 1. KEY PRIORITIES No. Priority Responsible Necessary activity State of implementation Financial aspect Deadline Obstacles institution / Total Republic CARDS department / Budget1 and other person external funds

A B C D E F G H

1.1.1 Make further sustained RSL RSL – а) Pass a law RSL – а) Comparative law is RSL - а) RSL - а) and b) the efforts to implement the [Gradimir on officials’ salaries – being assembled in order to and b) Government will reform of the public Nenadovic, regulate the rights of start drafting the law; b) There support determine law administration, including Assistant appointed persons is a first draft of the law. It was of proposals by the end the civil service pay Director]. and other state prepared by a foreign expert, European of 2007. system, to ensure MPALSG officials who do not under the EAR project and Agency transparent recruitment, [Public have civil servant requires further work. So far, for professionalism and Administration status; b) Pass a law the following laws have been Reconstr accountability. Department on adopted: the Government uction . (AM Gordana supervision/inspection Law, Public Administration MPALSG Stanic), – regulate issues Law, Law on Civil Servants, – Support Administrative relevant to Law on Salaries of Civil of the Supervision supervision/inspection: Servants and Appointees and European Department duties, authorisations relevant implementing Agency (AM Zoran and responsibilities of regulations. MFIN – In 2005, for Petrovic), inspectors performing the reform of public Reconstr Local Self- supervision, administration and public uction Government supervision procedure, services started. A new salary and Department rights of those who are system was established, World (AM Bratislav being supervised etc. largely distinguishing between Bank; Djokic)]. MFIN It is necessary to pass the levels of responsibility and UNDP [Treasury these laws in order to work complexity, and (support (Sonja Zigova, round off the public increasing the salary range. It to the Assistant administration reform, will be effective as of January Serbian Director for including regulation of 2007. The number of Public IT)]. civil servant status. employees in the Government Administr MPALSG will actively has been reduced by about ation monitor and assess 10%, as well as the number of Reform the situation in the employees in the Army and Strategy area of public health care. Reduction in – Stage administration and subsidies to public utilities has 2). local self-government been enabled through the and, in accordance voluntary leave of a number of with the law, take employees, the help of measures and Transition Fund, restructuring propose that the of public utilities etc. Government passes MPALSG – As regards the regulations or takes implementation of the Public

1 Ministry of Finance emphasises that the Regulation on temporary financing of the Republic of Serbia for the period January-March 2007 (Official Gazette of RS, No. 115/06) takes heed of all the requisites pertaining to the smooth functioning of public administration institutions within the scope prescribed under the Budgetary System Law (Official Gazette of RS, Nos. 9/02, 87/02, 66/05 and 85/06). Should the allocated funds for some activities prove to be insufficient, the problem will be certainly be resolved in order to prevent putting at risk the financing of the priorities included in the “Revised Implementation Plan for the European Partnership Priorities”.

3 measures it is Administration Reform authorised to take. Strategy, the legal framework Pay special attention is nearly completely rounded to the provision of off. New laws are being expert assistance to applied (The Government government agencies Law, Public Administration in the area falling Law, Law on Civil Servants, within the Law on Government Agencies responsibilities of the etc.). Ministry and for supervision/inspection through the administrative inspectorate.

1.1.2 Strengthen the HMRB HMRB – Produce the HMRB – The Department of HMRB – 2nd, 3rd and HMRB – Limited European integration [Department of action plan for International Cooperation and 4th quarter of 2007 number of staff structures at all levels International institutional building of Projects already exists in SEIO – 1st quarter of and limited (including with regard to Cooperation International HMRB, but only one person is 2007 financial line ministries and the (Marija Cooperation in charge of European resources. parliaments) and Vujnovic, Department and integration matters, which improve cooperation Assistant projects relevant to the slows down cooperation with among them. Director)]. EU association; meet SEIO and other institutions. SEIO [Tanja obligations pertaining New job organisation is a Miscevic, to the membership in priority, followed by taking on Director]. the Council of Europe; another person in charge of inter-sectoral legal harmonisation with the cooperation. аquis communautaire, as well as staff training and upgrading technical equipment in the Department. SEIO – At the initiative of SEIO, the Government adopted the Action Plan for Institutional Capacity Building with regard to the oligations pertaining to the European integration process on 27 July 2006 (Decision 05 No: 018- 4767/2006). The first report on the course of implementation, to be prepared by SEIO and MPALSG, will be submitted to the Government in early 2007.

1.1.3 Pursue with MJ Implement National The Resolution on MJ has Permanent task. determination the [Judiciary Judicial Reform formulating the National assessed costs reform Department Strategy and the Judicial Reform Strategy of application of the judiciary to (AM Zivka action plan for the (NJRS) was adopted by the of the Criminal guarantee its Spasic) implementaion of this Serbian National Parliament Procedure 4 independence, In cooperation strategy. (SNP) on 25.05.2006. The Code (CPC) professionalism and with: Supreme Carry out activities in Commission for the and of the efficiency. Court of Serbia accordance with the Implementation of NJRS establishment (Vida Petrovic- set deadlines. was formed on 22.06.2006, of Skero, Activities pertaining to and the Secretariat for Administrative President of 12 reform objectives to Implementation of NJRS was and appellate Supreme be achieved from the also established, as an courts and Court), 3rd quarter of 2006 to administrative body in entered the Republic the 1st quarter of 2007 charge of providing cost prosecutor’s are: 1. independent assistance for the assessment in Office management - 1: new Commission. On its 2007 (Slobodan roles and 06.06.2006, the Government Financial Plan Jankovic, responsibilities for adopted the Action Plan for (1,533,060,000 Republic High Judicial Council; the Implementation of NJRS. RSD). By the prosecutor), debate about the new The Action Plan lays down end of the Higher role and responsibility detailed activities and year, MJ will Commercial of High Judicial concrete deadlines for their produce a final Court Council; 2: a proposal realisation in accordance cost (Radomir of the scope of activity with priorities and abilities, assessment for Lazerevic, and organisational differentiating between the the President), structure of short-term, mid-term and long- implementation High Judicial Administrative Office; term ones. The Strategy of NJRS. This Council (Vida debate about draft envisages that, in accordance issue will be Petrovic- guidelines for the work with the principle of regulated Skero, and status of independence, the under the law President of Administrative Office; management of the court which will lay High Judicial 2. independent system should largely be the down the Council), budgetary body – responsibility of the High organisation Judicial Centre formulate a plan for Judicial Council (HJC), whose and status of (Nenad Vujic, transitional budget status, composition, election justice bodies. Director), process; 3. and responsibilities are Association of independently regulated under the new Judges establish general Constitution. HJC will have a (Dragana framework, internal key role in the process of Boljevic, Judge order and court election of judges, their in the Belgrade functioning – 1: promotion, accountability, District Court), propose revised roles financial circumstances and Law School and responsibilities of relieving of duty. It will also be in (Mirko High Judicial Council; charge of human resources, Vasiljevic, public debate; 2: plan organisation and supervision, Dean) and new framework of budget, assessment of results Serbian Bar authorisations of High achieved, general framework Association Judicial Court; and internal order and work of (Vladimir 4. open process of courts, and strategic planning. Seslija, election, promotion, To achieve the independence President)]. accountability and of justice system also means to termination of judge’s introduce an independent mandate - 1: formulate judicial budget, but only after a detailed proposal the establishment of concerning election, infrastructure and capacities for promotion, appropriate planning and accountability and efficient financial management dismissal of judges; in the justice system. public debate; 2: 5 formulate criteria for new procedures concerning the election of judges, promotion, accountability and their relieving of duty; 5. provide appropriate access to information in court registers and procedures - 1: assessment of existing rules and procedures concerning access to information about court proceedings; implement comparative study of best standards in connection with access to information on court proceedings; 2: determine the knowledge management standards; determine demands and possibilities for research, download, access, safety and technology; implement tender procedure for the procurement of software; 6. enhance public relations and public involvement - 1: formulate a plan to establish a public relations office and information points; debate about draft plan; adoption of plan by High Judicial Council and MJ; formulate job organisation and budget rationale; 2: research best practices of record keeping and solving complaints about judicial system; formulate single 6 mechanism of record keeping and resolving complaints about judicial system; 7. establish clear standards for the assessment of judges’ performance and results – define clear criteria for the assessment of judges’ results based on the ratio between the number of cases taken and the number of decisions confirmed, abolished or returned per judge; 8. efficient case management 1: formulate the job opportunities plan with detailed job descriptions; debate about the draft plan; 2: formulate changes in scheduling the trials and court appearances in courts of general and of special competences; 3: Higher Commercial Court to adopt new case management system for commercial courts; implement public procurement and sign contract for planning and development of the new case management system; develop new case management system; 4: selected district and municipal courts to have new information system installed with EU’s assistance; selected district and municipal courts to assess and monitor the functioning of new information systems; 5: implement analysis 7 of existing system of servicing notifications, its costs and weaknesses; 6: define a formula for the number of cases allocated per judge on the basis of the case profile in commercial courts; analysis of the number of cases per judge in selected commercial courts; 9. efficient use of resources in courts and Prosecutors’ Offices - 1: formulate training programmes for prosecutors and investigating judges; approve new training regime; start new training regime for selected prosecutors and investigating judges; 2: define training programmes for judges, prosecutors and solicitors; approve new training regime; start new training regime for selected prosecutors, judges and solicitors; 10. improve access to the justice system - 1: formulate a proposal for the improvement of legal aid system and basic elements of the draft law; debate about the proposal; 2: formally assess the existing capacities of the Mediation Centre; 3: formulate and propose a plan for establishing new legal aid system and start formulating the criteria; approve and adopt the plan and prepare regulations; 8 11. Standardised education and professional improvement systems - 1: formulate a plan for the establishment of the National Institute of Judicial Training (NIJT); public debate about the plan; 2: MJ to organise donor conference on the new NIJT; 3: formulate new Curriculum in accordance with current needs and Bologna process; expand the programme with new justice-related courses; 12. Modern network - 1: produce a law to govern organisation and status of justice bodies in accordance with the analysis and clear criteria for the rationalisation of court network; 2: do a diagnostic infrastructural study in large municipal courts. - MJ: identify staff in the Ministry of Justice to assist in the Strategy implementation; MJ staff to coordinate with the Commission for the Implementation of National Judicial Reform Strategy (CNJRS). Prosecutors’ Offices: draw up draft law on public prosecutor’s office, under which the State Council of Prosecutors will be constituted and the mechanism of issuing instructions, and objections thereof, 9 will be laid down in detail. Practice of law: 1. complete draft law on the practice; debate about draft law; Government to adopt the law; 2. Serbian Bar Association and other interested parties to start debate about rights and responsibilities of solicitors, professional code and practice; 3. Serbian Bar Association and other organisations to analyse the law. Public notaries: the draft law on public notaries is being drawn up.

1.1.4 In particular, review the MP [Judicial Implement National The National Judicial Reform (At this 2nd quarter of 2007 recruitment and career Department Judicial Reform Strategy envisages that the moment it is advancement system (AM Zivkа Strategy (NJRS) and election and appointment of not possible to with a view to building it Spаsic) in the Action Plan for judges must comply with the estimate the on technical and cooperation NJRS Implementation. principle of institutional and financial professional criteria with: Judicial personal independence of the aspect.) whilst avoiding any Centre (Nеnаd court system. HJC will have political influences in Vuјic, dirеktоr), exclusive responsibility to order to ensure that a Association of recommend candidates for the judge’s position is a Judges first-time election of judges, permanent one. (Drаgаnа who will be elected by SNP for Bоljеvic, Judge a definite period of three at the Belgrade years. When the three years District Court), have expired, HJC will, within Law School the legally prescribed (Mirkо procedure, pass a decision on Vаsiljеvic, permanent appointment of Dean) and judges. This decision will be Serbian Bar declaratively confirmed by the Association President of SNP. Presidents (Vlаdimir of courts of law will be elected Sеsliја, by SNP at the proposal of President)]. HJC, in the procedure that will be prescribed under a special law. Upon the establishment of NIJT, results achieved in the final exam will be highly valued when electing new judges. HJC will develop precise criteria for the new

10 method of proposing judges, their election, promotion, accountability and relieving of duty. With the passage of the new legal framework based on the new Constitution, a new network of courts will be formed with changed competencies and optimal number of judges, in accordance with clearly measurable standards and criteria established by HJC. The new standards and criteria will inevitably ensure that the best and most distinguished judges or lawyers are chosen for this prestigious position. Those who are most accomplished and most responsible will advance to the courts of higher-instance, in accordance with their expertise and capabilities. Judges who remain within the average will stay in courts of the same ranking, while those who do not meet the minimum standards will not be re- elected. In addition, a new monitoring system will be introduced in order to enable presidents of courts to monitor the performance of the entire system and results of some judges. Prevention of inappropriate political influence on the election of judges is one of the key issues from the aspect of independence of judicial system. The new Constitution guarantees independence (Art. 149). With a view to carrying out Recommendation No. R. (94)12 of the Council of Europe Committee of Ministers on independence, efficiency and role of judges, NJRS envisages exclusive responsibility of HJC to determine clearly measurable standards and criteria to ensure that the best judges 11 advance to courts of higher instances. NJRS also envisages basic mechanisms that will ensure transparency of election and appointment of judges, as a foundation of personal independence of judges. Election procedure is carried out in two stages, with HJC as the key actor in both of them. In the fist stage HJC proposes candidates to SNP for the first-time election of judges. Among the candidates proposed, SNP chooses judges for a three-year period. In the decision-making process, SNP is restricted by the HJC’s proposal, which SNP can accept or reject, but cannot change. The trial period for judges has been reduced from five to three years. Such a solution has adopted the stand of the European Commission for Democracy through Law (Venice Commission), expressed in the Opinion No. 349/2005. At the same time, in conformity with the said Opinion is the Resolution on exclusive responsibility of HJC to pass a decision on permanent appointment of judges after the trial period has expired. This decision is confirmed by the President of SNP. NJRS envisages exclusive responsibility of the High Judicial Council to determine clearly measurable standards and criteria that will ensure that the best judges move up to higher courts. The role of SNP in the procedure of promotion is reduced to a consultative one. The Strategy only prescribes obtaining an opinion (which is not legally binding) from the Judicial Committee. The comparative analysis of normative solutions concerning the criteria for election of judges, their promotion, disciplinary accountability and dismissal is underway. The results of the 12 analysis will be a basis for drawing up laws and regulations governing the criteria for the election of judges, their promotion, disciplinary accountability and dismissal. - The project Windows Safe Infrastructure with XML Based Integration was realised in MJ under the Agreement on Strategic Partnership of the Serbian Government and Microsoft Corporation. The project covered competences of MJ, especially those concerning its internal web portal, SW application Election of Judges, SW application Complaints, SW application Damages, SW application Case Records, SW application Statistical Reports on Court Work, Microsoft Office Project in Serbian. - Within the project supported by the Norwegian Ministry of Foreign Affairs, NGO Justice Network, the development of business software and database for Internet access has started. Under this project, MJ is building a web page for all district and municipal courts, providing every citizen with easy access to the information about courts of law, permanent legal assessors, court interpreters, etc. MJ has harmonised the forms with the necessary information, in accordance with the provisions of the Court Rule Book. All the information available via the Internet presentation is prepared in Serbian and English and when the project is finished, the information will be presented on www.pravosudna- mreza.org.yu

13 1.1.5 Ensure full cooperation MFA MFA to continue So far, about 1,500 ICTY’s Until all obligations Insufficient with the UN [Minister Vuk meeting the requests have been towards ICTY are number of International Criminal Drаskоvic; obligations pertaining processed. The role of MFA is met. employees in the Tribunal for the Former Department of to the Law on the following: MFA receives International Yugoslavia (ICTY). International Cooperation between and determines formal Legal Affairs and Legal Serbia and suitability of requests for Department Affairs (Sаnjа Montenegro with cooperation and execution of within MFA, due Milinkоvic)] ICTY. Efficiency in the some decisions of ICTY; MFA to restricted communication of all receives the request for employment in responsible authorities handover together with public involved in carrying confirmed indictment and administration out obligations order for arrest and submits and inadequate pertaining to this them for the procedure; MFA salaries. cooperation should gives feedback to ICTY on the improve. decisions of responsible authorities, actions taken, the meeting of or obstacles to meeting ICTY’s requests; MFA objects to the request whose meeting would, according to the Government, jeopardise the sovereignty or safety interest of Serbia.

1.1.6 Fully respect the MFA MFA – Take active MFA – Four meetings MFA – 2006/2007 MFA – UNSCR 1244 and [Minister Vuk part in negotiations dedicated to decentralisation, International intensify dialogue with Drаskоvic; concerning resolving two dedicated to the negotiators have Pristina. Show General the issue of the future protection of cultural and not replied to our constructive approach Multilateral status of Kosovo- religious heritage and one to initiatives. with regard to Kosovo. Directorate Metohija (KM); start discuss economic issues were (Dејаn direct talks about the held; Sаhоvic); future status of KM Two meetings of SEE General between Belgrade and countries and the SEE Directorate of Pristina; sign Cooperation Committee were the EU (Јеlа international held on regional development Bаcоvic)] agreement as a result and KM issue. MD of the agreement MD – Serbia completely [Commission reached about KM adheres to all provisions of the of status; prepare agreement signed. Within the Implementatio meetings and material. scope of implementation of n of the Military MD – Strict UNSC Resolution 1244, in Technical harmonisation with accordance with TOPA Agreement provisions of Military (Temporary Operating (MTA); Technical Agreement Procedures Agreement General Staff signed between the Astride the Kosovo (G-3), Colonel International Security Administrative Boundary, with Milоrаd Forces on KM and the Amendment of Pоpоvic] KFOR and the 21.02.2006) and DOPA Governement of FRY (Directive on Operating and Serbia. Procedures Agreement Astride the Kosovo Administrative Boundary), Serbian Army holds regular meetings at the local,

14 coordination and command levels, as well as high level meetings with the responsible authorities of KFOR.

1.1.7 Ensure active MО 1. Develop, adopt and 1. а) The Draft National 1. а) To develop by 1. a) Considering domocratic control over [1. Directorate implement National Security Strategy is finished June 2006, and that the the army by of Strategic Security Strategy, and in the procedure of apply as of 2007 document is strengthening Planning which (besides the harmonisation with the b) early 2007 being drawn up parilamentary control (Colonel Mitаr Constitution) is the Constitution. b) The Draft c) earlu 2007 for the first time, and establish Kоvаc); supreme starting Defence Strategy is being d) early 2007 the employees in transparent financial 2. Secretariat document that all harmonised with the Draft 2. 1st half of 2007 the institutions management. (Milicа Vlаsic other strategic National Security Strategy and that should verify Kоturоvic); 3. documents stem from the Constitution. When the it do not know Office for and rely on. This will harmonisation is over, it will be the procedure Liaison with ensure transparency submitted for further well. 2. The SNP in the planning of procedure. c) The Draft budget for the (lieutenant- defence activities and Strategic Defence Overview is defence reform colonel reform of Serbian also in the process of has not been LJubisа Igic); armed forces in the harmonisation with the approved. 4. Public long term. 2. Pass, Constitution and higher-level Relations adopt and implement strategic documents, after . Directorate laws that partly or which it will be sent for further (Pеtаr completely regulate passage procedure. Bоskоvic); legal conditions for d) Serbian Military Doctrine is 5. Defence democratic and civilian being harmonised with the Policy control over defence Constitution and strategic Department activities: pass the documents and sent for further (AM Snеzаnа army law, defence procedure, after the adoptio of . Sаmаrdzic- law, law on the previous normative and Mаrkоvic); 6. alternative to military strategic documents. e) the Budgetary and service; participate in 2007 Ministerial Directive has Financial passage of the law on been passed and it is being Department, democratic civilian applied. 2. Based on the new Аlеksаndаr control over Serbian Constitution and Constitutional Stојаnоvic]. Armed Forces; adopt Law for its implementation, the law on Serbian draft laws in the domain of the intelligence and Ministry of Defence will be security agencies. prepared, primarily on the Implement solutions army, defence, security from the law on services, and then on military democratic civilian schools, science and research control over Serbian in the army, the alternative to Armed Foreces after military service (or civilian its adoption by the service), participation in peace Parliament. 3. In MD operations and other, in establish the Office for accordance with the modern Liaison with SNP. 4. standards in this area. All draft Introduce a practice of laws that fall within the holding regular press responsibility of MD will be conferences and adjusted to the latest changes constructing Internet of the status of Serbia. The presentation of MD adoption of the laws and Serbian Army. 5. mentioned above, especially

15 Intensify international the Law on Democratic military cooperation Civilian Control over Armed with countries that Forces will enable further have considerable affirmation of the experience in the parliamentary model of democratic control oversight of defence activities over armed forces. 6. within the security sector. Establish a single MD has signed a system of financing of Memorandum of MD. Adopt laws that Understanding concerning regulate defence cooperation with the Insitute of system, defence Comparative Law, which will financing and other assist in the production of strategic issues. 7. some draft laws. 3. Finished. Establish direct (Having regard of the subordination of the significance of having SNP Budgetary and fully informed, as an important Financing Department, precondition for enabling the Public Relations supreme legislative body to Department, perform continued democratic Procurement and civilian oversight of the army, Infrastructure MD has established the Office Department to the for Liaison with SNP within the Minister. Defence Policy Department.) 4. Minister of Defence holds periodical press conferences, and all the data from the MD domain are regularly updated. 5. The following documents have been signed: Agreement between the Council of Ministers and the Austrian Government on cooperation in the area of defence; Memorandum of Understanding between the Serbian and Norwegian Governments on cooperation in the area of defence; Agreement between the Serbian and US Governments on status protection and the access and use of military infrastructure in Serbia. 6. In principle, there has so far been only formal parliamentary control in all segments and even in the area of budgetary spending. It was contained in the right and the possibility of an individual MP or a group of MPs to start the initiative concerning oversight of the army. This is 16 why it is important to establish an expert body, independent in its work, which would submit its reports to the Parliament. In addition, in 2006, a system of internal audit was established within the Ministry of Defence, while the external audit would be performed by the Defence Inspectorate, as an independent institution at the state level. External audit should be merged with the budgetary inspection to make it more cost-efficient. 7. Finished.

2. DEMOCRACY AND THE RULE OF LAW No. Priority Responsible Necessary activity State of implementation Financial aspect Deadline Obstacles institution / Total Republic CARDS department / Budget and other person external funds

A B C D E F G H 2. 1. Constitutional issues Short-term priorities 2.1.1 Revise the Constitution SNP On 8 November 2006, SNP in accordance with passed the Resolution on European standards. Proclaiming Serbian Constitution, which was adopted by SNP on 30 September 2006 and approved by referendum on 28-29 October 2006. On 10 November 2006 SNP went on to pass the Resolution on Proclaiming Constitutional Law for the implementation of the new Serbian Constitution. 2. 2. Elections Short-term priorities 2.2.1 Complete the reform of RSL (Dаrkо а) Pass a law on Drafts of all three draft laws а) No The Government the electoral legislation Rаdојicic, electoral register – have been prepared. additional should adopt all three reform Assistant introduce a general funds are bills by the end of (including electoral Director) electoral register in necessary; b) 2007. registers) in line with the order to keep more and c) recommendations of the precise record of additional Office for Democratic voters in a single funds will be Institutions and Human database; necessary. No Rights. b) Pass a law on the precise election of members assessment is of the parliament – available at the itroduce electoral moment. It has commissions of first- been instance in order to negotiated that increase the the necessary efficiency of funds should agencies in charge of be provided the implementation from of elections, regulate international the participation of sources. national and Application of ineternational the said laws is observers and the existing legal responsibility of shortcomings; MPALSG, as 18 c) Pass a law on well as electoral compaign – procurement of properly regulate funds rules of electoral campaign. 2.2.2 Fully implement the MFIN [Treasury Implement the 2006 Funds for these purposes 456 million legislation on financing (Ruzicа Budgetary Law and have been allocated from the of political parties. Stојiljkоvic, the Law on the 2006 Budget. The Assistant Financing of Political administrative section of the Director for Parties. Treasury transfers financial Budget resources to political parties in Projection)] accordance with the projected funds prescribed under the Budget Law, as per individual request submitted by the in the Ministry of Finance.

2. 3. Public administration Short-term priorities 2.3.1 Implement the SNP Elect Ombudsman. SNP adopted the Law on legislation (Note of SEIO). Protector of Citizens in to set up an September 2005. The Ombudsman’s Office. Government allocated funds from the 2006 Budget for its work. According to the Resolution on Proclaiming the Constitutional Law, adopted by SNP on 10.11.2006, the Parliament will elect Ombudsman in its first session after the Government has been composed. (Note of SEIO). Mid-term priorities 2.3.2 Further strengthen SEIO, HMRB HMRB – Implement HMRB – Capacity building in 2008 Limited number European integration [Department of the Action Plan for the Department of of staff and units in the line International Institutional Building International Cooperation and limited financial ministries and Cooperation of the Department of Projects is underway. SEIO – resources. cooperation (Mаriја Vuјnоvic, International Please refer to Priority 1.1.2. mechanisms Assistant Cooperation and EU with European Director)] Association Projects Integration Offices. ЕU, in order to have a department fully capable to carry out activities pertaining to European integration.

2.3.3 Continue full MPALSG Administrative In accordance with the new Support Ongoing activity. implementation of the [Public inspectorate should regulations in the area of public to Law on Civil Servants. Administration perform continual administration, new rule books MPALSG Department (AM supervision/inspectio have been passed regulating in the Gоrdаnа Stаnic) n in accordance with job organisation in all implemen 19 and the authorisation ministries, special tation of Administrative prescribed by the law. organisations, President’s and Public Supervision Continue consistent Prime Minister’s cabinets, Administr Department (AM application of the said technical services in ation Zоrаn Pеtrоvic)] laws and regulations. administrative districts and Reform Directorate of Common Strategy, Operations of Republic Norway, Agencies. Special attention has 339,000 been paid to the EUR implementation of regulations (project in the area of distribution of civil finished). servants’ and appointees’ jobs and job description criteria. 2.3.4 Implement measures HRMB - Unify the - Recruitment of civil servants - Funds have Project By the end of 2008 - Lack of space aimed at developing recruitment through internal and public been allocated financed and equipment human resources in civil procedure in competitions has started, with from the by for the service. government the application of selection Budget for European establishment of agencies through tools prescribed by the regular Union the training internal and public Regulation on professional purposes but under centre for civil competitions. abilities, knowledge and skills not for the supervisi servants and for Apply new tools in tested in the recruitment activities on of the Bureau to the recruitment procedure and the selection necessary for European take a central process – checking criteria (Official Gazette of RS, the realisation Agency role in the skills through Nos. 64/06 and 81/06). of mid-term for recruitment. psychological - A consolidated draft of the priorities. Reconstr - Lack of staff measuring human resources plan for uction. – familiar with the instruments, government agencies has Technical human resources checking knowledge been prepared and its support management. through tests, written harmonisation with the funds to - Lack of financial assignments and allocated to government prepratio resources, simulation, all in agencies is underway, based ns for the primarily for full accordance with the on the Regulation on the implemen establishment Regulation on temporary financing of the tation of and professional abilities, Republic of Serbia in the administr modernisation of knowledge and skills period January-March 2007, in ative and register of human tested in the the process of preparation of regulation resources, with a recruitment the Proposal for the 2007 s – Stage view to improving procedure and the Temporary Plan Concerning 2 – and symplifying selection criteria Human Resources in Republic electronic (Official Gazette of Government Bodies. of Serbia. applications for RS, No. 64/ 2006 - In the period May-December Project jobs in public and 81/ 2006). 2006, training was organised started in administration. Strengthen the role in the application of the Law Septemb - Calculation of of the Burau in the on Civil Servants, Regulation er 2005, salaries of civil recruitment process, on the preparation of the Plan to finish servants was not with gradual of Human Resources in in March planned under centralisation of Government Bodies, 2008. the project Bureau’s services for Regulation on the distribution Expert "Development of other bodies and, of civil servants’ jobs, assistanc modern human with this regard, Regulation on the distribution e to the resources introduce new of appointees’ jobs, Bureau management in techniques Regulation on the with the Serbian public (recruitment centres). implementation of internal and said administration", Symplify and public competitions for filling in project is and the Bureau improve the the posts in government provided does not have 20 application for the bodies, Regulation on the by eight available funds in candidates, bearing evaluation of civil servants. foreign the budget or in mind that the - Government bodies are experts. from the project objective is to apply connected in a single – It is for increased information information network and a estimated number of orders. technologies in order register of inernal job market that the to enable candidates has been established. implemen to submit their job The Register of Central tation of applications Human Resources has data necessar electronically, and about 98% civil servants in y animating as many government agencies that the activities candidates as Bureau is responsible for. need possible by 41.4% of the total number of additional presenting the work civil servants update the financial of public institutions information independently. support. to the citizens in All ministries and agencies such a way that will within ministries, special provide access to all organisations and Government the information about bureaus are connected to the their work. Central Register of Human - Establish the Resources, except the Inland institution ofplanning Revenue, Customs human resources by Administration, Republic developing realistic Hydro Meteorological Institute planning based on and administrative districts. functional analysis of - The Draft Programme of government Advanced Training for Civil agencies. Servants has been produced. - Establish and - Forms conforming to the develop professional requests of the Regulation on improvement of civil evaluation of civil servants servants by have been produced. strengthening the - The activities listed above Professional have been supported by Improvement foreign experts. Department within the Bureau and establish a training centre for civil servants. Produce training programmes for civil servants in accordance with real needs. - Establish efficient coordination and communication mechanisms with human resources units in government agencies. - Establish efficient functioning of central register of human 21 resources and records of internal labour market. Provide IT support to government agencies. Develop computer network of republic agencies (connecting all government agencies in a single information network - Intranet). Permanent training of users of HRMB information system. - Monitor the system of evaluation of civil servants and the impact of assessment on career planning and promotion of civil servants. - Develop job classification system and improve classification process with the aim to implement the merit system consistently. 2.3.5 Strengthen capacity MPALSG, RSL MPALSG – Establish RSL – the Government’s MPALSG MPALSG – (policy-making and preconditions for Rules of Procedure and the in Permanent task. interministerial efficient coordination Regulation on principles of cooperati coordination) of ministries; produce internal order and job on with of the public recommendations for organisation in ministries, the administration at the special organisations and Deputy the state and local institutionalisation Government bureaus have Prime government levels. and introduction of been passed, opening a legal Minister’s new functions in the framework for coordination at Cabinet work of public the Government level. and administration. MPALSG – Capacity building in Secretaria ministries is underway. Its aim t General is to enable ministries to take of the part in the policy-making Governm through the project Towards ent : More Efficient Implementation Norweiga of Reforms. A number of n projects at the local level aimed Governm at capacity building within the ent – local self-government “Towards concerning policy-making more (training in the production of efficient development plans etc.) are implemen also in progress. tation of 22 reforms“: Stage 1, 281,521 EUR; Stage 2, 738,139 EUR, and for MPALSG 40,225 EUR.

Support to capacity buidling in MPALSG, European Commissi on, CARDS, 1.5 million EUR → project is finished.

EAR – Program me of support to municipali ties in Eastern Serbia → project is finished.

UNDP – “Support to the Serbian Public Administr ation Reform Strategy – Stage 2“ 2.3.6 Set up a centralised MFIN [Treasury, Successful bidder to A public procurement 15.5 million 15.5 2004-2008 payroll processing (Sоnjа Zigоvа, implement the procedure was launched and a EUR. million system. Assistant Permanent Treasury its implementation has started. EUR. Director for IT)] System has been The processing of salaries is selected; follow up: done through a centralised analyse existing system whereby the salaries 23 situation and define of those employed with the the functions of the Serbian Budget beneficiaries future system, install are calculated and paid on the system, train all their current accounts. This the partners in the payment system consists of process, implement the following stages: a the new system. beneficiary of the Republic Budget submits to the Treasury the data for the calculation of salaries of its employees, the Treasury checks the data, processes them and then transfers the funds directly on the employees’ current accounts. This way of payment of salaries is currently implemented for 82 direct beneficiaries with 8,500 employees, and by the end of 2006, 8 more beneficiaries with about 15,000 employees are to join in. The project of centralised processing for direct (DB) and indirect beneficiaries (IB) of budgetary funds is being prepared. Implementation of the information system to support processing of salaries for DB and IB will cover over 300,000 employees in public administration and public utilities. The project should be realised during 2007. 2.3.7 Strengthen the process MFIN MFIN – Train staff in MFIN – In order to reinforce ME – 1) 7.2 MFIN – NBS – Continued of economic policy- [Macroeconomic the Macroeconomic the process of economic million RSD; Further activity. making. and Fiscal and Fiscal Analyses policy-making it is necessary 3) 1.275 billion engagem ME – 2) 4th quarter of Analyses Department; to train the staff of the RSD. ent of 2007 Department]. additional staff Macroeconomic and Fiscal funds ME, NBS training. NBS – Analyses Department. With from (Governor Reform in financial this aim, the DFID’s Project CARDS Rаdоvаn sector is followed by Strengthening Strategic Program Јеlаsic). ME reinforced and Budgeting, which started on me is (Milаn Јоsipоvic) consolidated 16 January 2006, is being necessar supervision in the implemented and it will last y or funds areas of banking, until 16 January 2009. The from insurance, pensions main objective of the project is donations and leasing, as one to support the Government , together of the key elements strategy directed towards with EU of the NBS growth, structural reforms and training macroeconomic poverty reduction by improving program strategy. ME – Pass the management of public mes. a law on support to expenditure. In addition, a the steady regional project of capacity building in 24 development of RS projecting macroeconomic in 2007-2012. variables is underway. NBS – The National Bank of Serbia is an independent and autonomous institution and it does not seek or receive instructions of state bodies or other persons. Decisions and measures concerning monetary policy are passed by the Monetary Committee, whose meetings are attended by the minister responsible for finances, without the right to vote. The Governor of the National Bank of Serbia attends sessions of the Serbian Government at which issues concerning the NBS are discussed. The National Bank of Serbia submits to the National Parliament the Annual Progress Report, the Monetary Policy Report, a report on the situation in the national banking and overall financial system, as well as the Monetary Policy Programme for the next year. The vision of the National Bank of Serbia is to build a modern and efficient financial sector, which would provide quality financial services, primarily in the field of banking, insurance, voluntary pensions and leasing, supporting the development of the economy in the transition period. Reform in the financial sector followed by intensified supervision of banking, insurance, pension and leasing sectors, as well as its consolidation, is one of the key elements of the economic strategy of the National Bank of Serbia. NBS will pay special attention to the education of users of financial services and to their protection as consumers of those services. The role of NBS is prescribed under the Law on the National 25 Bank of Serbia (Official Gazette of RS, Nos.72/03 and 55/04). ME – 1) The Government adopted the 2006-2012 National Economic Development Strategy on 9.11.2006, with the accompanying Action Plan; 2) The Draft Law on Support to Steady Regional Development of the Republic of Serbia in 2007-2012 is being drawn up; 3) within the 2006–2011 National Investment Plan, the Law Amending the Budget Law envisages 170 million RSD in 2006 and 1.1 billion RSD in 2007 for the realisation of the Credit Programme aimed at encouraging investment and increasing employment in underdeveloped areas.

2.3.8 Adopt and implement MPALSG Harmonise laws in On the basis of the analysis of 1st and 2nd quarter of decentralisation reform [Local Self- the area of local self- functioning of local self- 2007 and on, in ensuring viability of local Government government in line government agencies, certain accordance with the governments. Department (AM with solutions solutions in the area of local self- Consitutional Law. Brаtislаv prescribed by the government have been DJоkic)]. new Constitution incorporated in the new (intellectual property Constitution. This will round off rights, fiscal the legal framework for the decentralisation, work of local self-government capital etc.). bodies – the process that has already started. As regards harmonisation with the Constitution, a new law on territorial organisation of the Republic, on the city of Belgrade, on local elections and local property is to be passed. 2. 4. Justice system Short-term priorities 2.4.1 Adopt and implement MJ Apply the law on The Law on the Training of . 10 March 2007 (to legislation on mandatory [Justice compulsory initial Judges, Public Prosecutors, establish training initial and continuous Department and continuous Deputy Public Prosecutors, programme). training for judges, (AM Zivkа education of judges, Assistant Prosecutors and prosecutors and court Spаsic), in prosecutors and Judges was adopted by the support staff. cooperation with assistant staff in the Serbian National Parliament National Institute courts of law. Task on 25 May 2006. The law will of Judicial forces should be in place as from 1 March Training (Judicial produce a proposal 2007. On 12 July 2006, the 26 Centre; Nеnаd for the initial training High Judicial Council formed Vuјic, Director)]. programme and the Training Commission, submit it to the which passed the Rules of Commission for Procedure and the Agenda, adoption and laying down the activities and submission to the the deadlines for their High Judicial realisation. The Commission Council. formed task forces for the preparation of draft training programmes in criminal, civil and administrative matters and a task force to produce a training programme with a view to raising the level of professional culture and learning about international standards in the area of justice. A task force for the production of a comprehensive proposal for the initial training programme was also established. The Commission proposes to the High Judicial Council the initial training programme, whose users are assistant judges and assistant prosecutors as well as carriers of judicial duties who have been elected for the first time. 2.4.2 Improve training MJ [Justice Formulate a plan for NJRS envisages that the (The rationale 2nd quarter of 2007 centres. Department (AM the establishment of Government forms NIJT by of the Law (Zivkа Spаsic) the National Institute 2008. This independent justice envisages In cooperation of Judicial Training; institution will operate under costs of with: Supreme organise public the supervision of the High 1,000,000.00 Court of Serbia debate; determine Judicial Council and provide RSD in 2006) (Vidа Pеtrоvic- existing capacities standardised initial and Skеrо, and improve work of continuous professional President), Mediation Centre; improvement for judicial Republic ensure application of employees at several levels. prosecutor’s the Regulation on the Permanent training of carriers Office (Slоbоdаn training programme of judicial functions will be Јаnkоvic, for mediators in compulsory. The Judicial Republic cooperation with Centre is responsible for prosecutor), founders [(MJ Centre education and professional Higher for Childrens’ Rights improvement of judges. At this Commercial in Belgrade, moment, there is no Court (Rаdоmir Belgrade Bar comprehensive curriculum for Lаzаrеvic, Association and the training of judges and President), High NBS, with the court staff. The Strategy also Judicial Council support of IFC envisages the passage of the (Vidа Pеtrоvic- (International new Law on the Bar Exam. Skеrо, Financial It has been determined that President), Coroporation)] in the there is an urgent need to Judicial Centre application of pass a new law on the (Nеnаd Vuјic, programme of National Institute of Judicial 27 Director), alternative ways of Training. Establishment of a task Association of resolving disputes force that will harmonise the draft Judges programme); law on the bar exam with the (Drаgаnа innovate training provisions of the future law on the Bоljеvic, judge in programmes for National Institute is also underway. the Belgrade mediators; apply the Legal analysis concerning the bar District Court), law on compulsory exam has been done with the aim Law School initial and continuous to point to the best practices in (Mirkо Vаsiljеvic, training of judges, Europe and USA. The analysis Dean) and prosecutors and covers the following countries: Serbian Bar assistant staff in USA (California), France, Association of courts of law. Germany, Croatia and Slovenia. Serbia (Vlаdimir The analysis covers the Sеsliја, following subjects: regulations President)] concerning this matter, the envisaged necessary legal conditions for taking the bar exam, the content of the exam, the time-table of examination, the composition of the examination panel, the place of examination, regulation of other exams when the exam for judges is separate (state exam, exam for public notaries, exam for solicitors). Law Schools have passed new curricula, paying special attention to improving the knowledge of positive regulations and acquiring practical knowledge and skills necessary for professional and efficient performance of judicial function. The Law on Juvenile Offenders and Legal protection of Minors envisage that judges, prosecutors, solicitors and police officers who take part in the proceedings involving minors, either as perpetrators or victims, have to undergo specialist training in the Judicial Centre. Upon successful completion of training, the Judicial Centre is authorised to issue a certificate proving that trainees may take part in the proceedings involving juveniles. By the end of June 2006, about 160 judges and prosecutors had undergone specialist training in the application of international standards to juvenile offenders, in the education and psychology of minors, in the regulations and problems in the application 28 of the Law on Juvenile Offenders and in the criminal and legal protection of minors. According to the Regulation on judges acquiring specialist knowledge on children’s’ rights with regard to their involvement in proceedings concerning family matters, passed by the Serbian Government, the Judicial Centre is authorised to organise and implement this programme and, upon successful completion of training, to issue a certificate to successful trainees. According to the Family Law, only a certificate holder can judge in these cases. In accordance with this regulation, the Judicial Centre organised eight seminars in the period 19-24 June and 26-30 June 2006. Considering that after the first round of training the courts of law expressed the need for further specialisation of judges in these cases, the Judicial Centre organised another round of seminars from 6 to 10 September 2006. The Curriculum Council of Judicial Centre has established a training plan for the period October 2006–March 2007. In June 2006, the regional office of the Judicial Centre in Novi Sad became operational. Its establishment was supported by OSCE Mission to Serbia in June 2006. 2.4.3 Start rationalising the MJ [Justice Finalise activities The High Judicial Council MJ has 2nd quarter of 2007 court system and Department concerning the adopted the Draft Proposal of performed cost modernise proceedings, (AM Zivkа proposal of the new the Number of Judges and assessment of in particular in the area Spаsic), in court network; Jurors in Courts on 26 July the application of cooperation with: continue activities 2006, which was sent to SNP of CPC and commercial law. Supreme Court concerning for review and adoption. MJ introduction of of Serbia (Vidа modernisation of undertook a number of Administrative Pеtrоvic-Skеrо, court procedures in activities in connection with and appellate President), the area of the rationalisation of justice courts in Serbia Higher commercial law system (court network) in and Commercial under the Project of accordance with NJRS. incorporated it Court (Rаdоmir Commercial Court The proposal of the new network in its financial Lаzаrеvic, Administration of courts will be created in plan for 2007 President), Strengthening accordance with provisions of the (1.5 billion district and Activity (CCASA) in Law on Court Organisation RSD). MJ has municipal courts, Serbia prescribing new responsibilities of also done cost- 29 High Judicial in cooperation with courts. MJ has organised analysis of the Council (Vidа USAID. meetings in the principal offices implementation Pеtrоvic-Skеrо, of district courts with all of NJRS. For President)] presidents of municipal and the period district courts, in order to 2006-2011 it is determine what is relevant for 12.1 billion the future network of courts, RSD in total such as geographic position and (151 million transport communications, EUR). This density of population, a two-year issue will be inflow of cases relative to the regulated number of people living in the under the law area, ethnic structure of on organisation population, cross-border areas and status of etc. A rational court network is judicial bodies. currently being designed. The network of courts will be created on the basis of precise and various criteria. Data provided by task forces formed by the High Judicial Council on the inflow of cases in courts in the last two years are being used. The analysis of all indicators is in its final stage. The proposal of a suitable network of courts should provide Serbian citizens with the efficient and full legal aid, access to justice and the rule of law. The Strategy envisages introduction of automated case management, revision of the scheduling procedure and introduction of new professional positions, which will give judges more time to concentrate on their judicial duties and to monitor the changes in process laws. Administrative tasks will be performed by professional staff in court administration. - Project CCASA is underway. It is being implemented in cooperation with USAID. The project started in 2004 and it should last until 2007, with a view to increasing efficiency of commercial courts in Serbia in the area of administration and management, automatisation and information technologies, training and strengthening of 30 judicial capacities, public access to information, training and monitoring of the work of courts. Under this project, the Internet presentation of commercial courts in Serbia was created, with the aim to improve communication within and among courts, to make databases accessible to the public and to provide the public with the information about commercial courts and their activities. Mediation is of special importance in the work of commercial courts in the area of commercial law. The project has provided hardware, system software, local computer networks, full communication connection of the above institutions, as well as the establishment of a single system of gathering and updating the information about judges and courts, i.e. introduction of integrated software for statistical reporting on the work of courts (daily, periodical, annual reporting) called The Application for Data Collection (ADC). This unique system, which encompasses all commercial courts, has been functioning for over six months online, via WAN/VPN network at the level of the Republic, containing information about over 150,000 cases. Complete automatisation of the work of courts was successfully implemented in the Commercial Court in Novi Sad by installing the software for case and document management and through building up the ADC system. Another pilot project was planned to be carried out by the end of 2006 in the Commercial Court in Belgrade. - Under the EAR project Database of Laws, 31 Regulations and Court Practices business software and a database have been created. The project is about establishing an electronic database of laws, regulations and court practices intended for judicial system. It primarily targets judges, prosecutors and their assistants, MJ and all other ministries. The purpose of the database can be expanded to other government agencies, public utilities as well as all citizens. With the establishment of the Editorial Staff of the database of laws, regulations and court practices, a step forward has been made in the realisation of the principle of transparency and citizens' access to justice. The Editorial Staff comprises three representatives of MJ and one representative of the Supreme Court and they are involved in the finalisation of technical preconditions and provision of human resources. - With the cooperation and financial support of the Deutsche Stiftung für Internationale Rechtliche Zusammenarbeit E.V. from Germany, a project of modernisation of court administration is being implemented, based on modern information technologies. A pilot project was carried out in the Municipal Court in Zajecar where business software for complete automatisation of case management was installed. The second stage of this donor project will include courts of general jurisdiction, such as the District Court in Belgrade, First Municipal Court in Belgrade, Second Municipal Court in Belgrade, Third Municipal Court in 32 Belgrade, Fourth Municipal Court in Belgrade, Fifth Municipal Court in Belgrade, Municipal Court in Apatin, Municipal Court in Cacak and the Municipal Court in Jagodina. - The Government National Investment Plan envisages the realisation of project of IT modernisation of court buildings in 2007. Under this project, the IT structure of all district courts and all judicial bodies (public prosecutors offices, municipal courts, municipal prosecutors’ offices, magistrate courts) within them shall be improved. Courts of general jurisdiction will be completely equipped with hardware and communication technology. Under the project, specialist IT training will take place for system administrators and technical support in the aforementioned judicial bodies. Permanent access to the Internet will be provided in special Internet rooms for all employees. All judicial entities will be connected in a single VAN network at the state level. The connection will be based on the frame relay communication via HDSL modems. 2.4.4 Strengthen the MP [Justice Apply the law on The National Justice Reform 243 million 2nd quarter of 2007 autonomy of the Department organisation and Strategy envisages the RSD prosecution system, (AM Zivkа responsibilities of development of autonomy, particularly the offices of Spаsic), government responsibility and efficiency of prosecutors for In cooperation agencies in the fight prosecutors. Prosecutors will organised crime. with: Republic against orgnised be more independent in their Prosecutor’s crime; monitor work, which will inevitably Office (Slоbоdаn realisation of PACO- result in greater responsibility Јаnkоvic, Impact project and objective criteria. They will Republic [Council of Europe be freed of political influence Prosecutor), project aimed at the as much as possible. With Special implementation of considerable limitations of the Prosecutor’s national anti- role of the investigating judge Office for corruption action and the new CPC adopted by Organised Crime plans in Southeast SNP in May 2006 and entering (Slоbоdаn Europe ]. force on 1 June 2007, Rаdоvаnоvic, prosecutors will be granted a 33 Special more prominent role in the Prosecutor)] investigating procedure. The Republican Public Prosecutor, War Crimes Prosecutor and Organised Crime Prosecutor will be elected by SNP, f for a six- year period, with the possibility of re-election, in accordance with the law. The Government proposes candidates, at the previously obtained opinion of the State Council of Prosecutors. All prosecutors will be elected in the same way. The State Council of Judges will comprise 11 members. Deputy Prosecutors of all levels will elect six members of the Council among themselves. A member of the Judicial Board of SNP, Minister of Justice and Republic Prosecutors are members of the Board ex officio. SNP elects two members among the distinguished, established lawyers with over 15 years of experience. As regards legal status of prosecutors, NJRS envisages a status of public prosecutor’s office that emphasises independence and increases autonomy and responsibility. Observance of the principle of hierarchical subordination is envisaged, which is common practice in the EU Member States. The relationship between executive governance and prosecutor’s office, according to NJRS, consists of the right of the Government to propose candidates for the Republic Prosecutor, War Crimes Prosecutor, Prosecutor for Organised Crime, appellate, higher and primary prosecutors. The Government can propose candidates for prosecutors after it has obtained the opinion of the State Council of Prosecutors. SNP elects prosecutors. The participation of the State Council of Prosecutors, Government and 34 SNP in election procedures ensures a more independent status of prosecutors. An important change in the judicial system of Serbia is the introduction of the State Council of Prosecutors. Its task is to ensure functional independence of prosecutors. As an exception, NJRS envisages the right of MJ to issue a directive on behalf of MJ on criminal prosecution of criminal activities prescribed under ratified international conventions or in other, legally prescribed cases. The objective of this solution is to provide the influence of the Government, as a democratically elected institution, on resolving the issues in the domain of foreign policy and fulfilment of international obligations of the country. The right to issue such directive is envisaged only in the cases described above. 2.4.5 Strengthen the office of MJ Apply the law on The new job organisation, Financial 2nd quarter of 2007 the prosecutor for war [Justice organisation and envisaging more professional aspect can not crimes. Department (AM responsibilities of staff members, is being be assessed at Zivkа Spаsic), governement prepared. The Croatian Chief this moment. In cooperation agencies in the war State Attorney and the War with: Republic crimes procedure. Crimes Prosecutor of Serbia Prosecutor’s agreed that war crime trials Office (Slоbоdаn will be held according to the Јаnkоvic, indictees’ countries of Republic residence. An Agreement Prosecutor), establishing a mechanism for Special cooperation was signed in Prosecutor’s October 2006. A new law on Office for the organisation and Organised Crime responsibilities of government (Slоbоdаn bodies in the war crimes Rаdоvаnоvic, procedure is being drafted. Special Prosecutor)] 2.4.6 Establish administrative MP [Justice Provide buildings The Law on Court 1.5 billion RSD 2nd quarter of 2007 Provision of and appellate courts. Department (AM and equipment for Organisation prescribes the (under NIP). (1.09.2007 is the funds. (Zivkа Spаsic), these courts; establishment of the likely date for in cooperation Administrative Court in appellate courts and with: Supreme Belgrade and appellate courts Administrative Court Court of Serbia in Belgrade, Novi Sad, to start work.) (Vidа Pеtrоvic- Kragujevac and Nis. Purpose- Skеrо, buildings for these courts are President), High currently being reconstructed. Judicial Council The Bill Amending the Law on 35 (Vidа Pеtrоvic- Court Organisation, which is in Skеrо, parliamentary procedure, President)]. envisages a belated start of work of appellate courts and Administrative Court – they will not start work before 1 September 2007. The contractor to work on the future building of the Administrative and Appellate Courts in Belgrade has been chosen. - А Regulation on the status of some institutions of the former state union of Serbia and Montenegro and the Council of Ministers’ services prescribes that the cases of the State Union Court which assess the legality of final administrative regulations are taken over by the Supreme Court of Serbia. Thus, the Administrative Department of the Supreme Court of Serbia got 4,322 cases. The cases of the State Union Court assessing the conformity of regulations with the law have been taken over by the Constitutional Court of Serbia. - The Bill Amending the Law on Judges is in parliamentary procedure. It envisages that, in exceptional cases, a judge can be transferred to work in another court of the same jurisdiction of immediately higher level, if he/she has met the conditions for the election of judges for that type of court, for a maximum period of one year, while the existing Law on Judges envisages that a judge can only be transferred to a different court of the same jurisdiction of the same or immediately lower level, for a maximum one-year period.

Mid-term priorities 2.4.7 Adapt national strategy MP (Please refer to Priorities 36 for judicial reform and [Justice 2.4.1-2.4.6) subsequent action plan, Department (AM particularly in the field of Zivkа Spаsic), in appointment and trial cooperation with period for judges, and the Secretariat autonomy of for prosecutors. Implementation of National Strategy and CINJRS (Milаn Skulic, Secretary General)]. 2.4.8 Create and set up an IT MP [IT Continue the project Stage 1 of the project is About 44 Provision of network for prosecutors Department (AM of Support to Crime finished (covers the territory of million RSD. To necessary at all levels. Gоrаn Јоvоvic)] Services of RS. Belgrade). It is necessary to continue the financial connect all IT networks for project, it is resources to prosecutors and courts of law necessary to finalise the at all levels into an integrated provide project. VAN netowrk and under SJIS 100,000 EUR. to install software for collection For the of statistical data and software realisation of for case management. All Stage 2 of the prosecutors’ offices in project, it is Belgrade, including the estimated that Republic Prosecutor’s Office, about are connected in a single 1,000,000 EUR network, while Case will be needed. Management System (CMS) is installed in the District Prosecutor’s Office in Belgrade and in the First Municipal Prosecutor’s Office. The system is operational. The objective is to install CMS in all 10 prosecutors’ offices in Belgrade. As regards communication, judicial entities in Belgrade are connected in a single WАN network, based on the frame relay communication and through the HDSL modem. MJ co-financed the public procurement of business software for case management for the largest prosecutor’s office in the Republic, the District Prosecutor's Office in Belgrade. The software has been successfully installed and its users have been trained to use it efficiently. It is necessary to ensure the installation of CMS software in 37 other municipal and district prosecutors’ offices in Belgrade and complete the training of all employees to work with the new software. Stage 2 of this project covers all remaining prosecutors’ offices on the territory of Serbia (29 district and 101 municipal prosecutors’ offices). At this stage, it is necessary to connect all public prosecutors’ offices into a single (WAN/VPN) network within the Information System of Prosecutors’ Offices and within SJIS. 2.4.9 Ensure enforcement of MJ [Justice 1. Promote the The obligation was met with No particular court decisions. Department, in principle of simplicity the passage of the Law on costs. cooperation with in court work, Administration Procedure Supreme Court establish information (LAP; Official Gazette of RS, of Serbia (Vidа mechanisms No. 125 of 22.01.2004, Pеtrоvic-Skеrо, concerning effective as from 22.02.2005) President), consequences of and the Law on Enforcement courts of general failing to administer of Criminal Sanctions. jurisdiction, a court decision - specialised (forced Court Rules of Procedure courts and administration , costs amending the Court Rules of Judicial Centre of court procedure, Procedure (Official Gazette of (Nеnаd Vuјic, court taxes, RS, No. 115/2005 of dirеktоr); damages, criminal 27.12.2005), under the Financial accountability); provisions of Articles 28, 29 Department (AM citizens should be and 30, introduces innovations Srbislаv Cvејic) informed about the concerning registration forms and Department functioning of court (Iv, Ikd, Ipv and Iv1) and forms of Corrections system, so that they 12, 12а, 12b and 13 for the (Bоrisаv Mаric, can better registration of cases in the Acting Director)]. understand why it is administration procedure, to important to enhance enable more efficient access to justice and monitoring of enforcement of court, establish more municipal and commercial effective court court decisions. procedures and a - higher level of legal By the end of May 2006, the safety when it comes training programme of Judicial to the administration Centre had covered training in of court decisions; 2. the area of court management Favour the criteria for too. It targeted court the assessment of presidents and secretaries. As professionalism and one of the necessary activities, conscientiousness in it was recommended that the the work of judges by number of participants should monitoring their extend to the staff in executive prompt and accurate offices, with the support of the handling of cases Curriculum Council to 38 and their relations introduce courses in the with the parties in the enforcement of court decisions procedure; 3. through the application of new Improve quality of CPC. judges’ work through - integrated training of The realisation of the 2006 judges as a form of supervision plan of the quality evaluation of Ministry of Justice has as its judges; objective the strengthening of 4. Strengthen accountability of court executive offices in presidents, judges and case courts in terms of management court material and administration. technical equipment - and provision of Continuous direct supervision sufficient number of of court actions with regard to quality staff citizens’ complaints that MJ members; propose performs as well as monitoring training programme of the realisation of necessary for court measures concerning administration – consistent application of the court management; Court Rules of Procedure and Provide training of increased transparency in court administration informing citizens about – court employees - responsibilities of judicial in procedures bodies in procedures concerning concerning complaints, has a administration of direct impact on the court decisions and strengthening of accountability coordination of work of court administration. with agencies - involved in the The Supreme Court of Serbia administration of ensures consistent application court decisions; 5. of CPC in the courts of general Use modern jurisdiction, as part of its technologies; install responsibilities connected with automated case the supervision of court management operations. system; connect all court IT networks at all levels in a single VAN network within SJIS; install software for collection of statistical data and software for case management; 6. Monitor implementation and necessary innovation of donor projects – CCASA in commercial courts in the segment of administration of 39 court decisions; monitor realisation of Twinning Project – capacity building in MJ, assistance to justice administration – court statistics (form Statistics Department within MJ to gather, input, follow, control and analyse data); transfer positive experiences from the USAID project The Rule of Law concerning case management and implementation of SЕRЕЈ – European Commission for the Efficiency of Justice, in pilot courts, in the supervision of the course of procedures and efficiency of administration of court decisions; 7. Start diagnostic study in big municipal courts concerning the updating of administration procedures and application of new CPC; according to the 2005 statistical report of the Supreme Court, there has been a drop in the administration of court decisions (11.7%) relative to 2004 (7.7%); 8. Intensify control of Higher Commercial Court over the administration of decisions of commercial courts.

2.4.10 Further strengthen the MJ Reinforce capacities Please refer to Priority 2.4.5. Until the scope 2nd quarter of 2007 Provision of capacity to try war [Justice of Prosecutor’s The new law on organisation of necessary budgetary funds. 40 crimes domestically in Department Office for War and responsibilites of expansion is full compliance with (AM Zivkа Crimes and Council government agencies in war determined, it with international Spаsic)] for War Crimes of crimes procedure is being is impossible to obligations pertaining to District Court in drawn up. estimate its cooperation with the Belgrade. financial International Criminal - aspect. Tribunal for the Former Under the old Law on Yugoslavia. Organisation and Responsibilities of Government Agencies in the War Crimes Procedure (effective since 2003), the Prosecutor’s Office for War Crimes and Council for War Crimes were formed. Considering the current number of cases and the likelihood of taking over some more cases, capacities of these two bodies should be expanded.

2. 5. Anti-corruption policy Short-term priorities 2.5.1 Fully implement the law MJ [Department The Law on the Conflict of Initial budget of on conflict of interests. of Normative Interests When Performing the Anti- Affairs and Public Office has been Corruption International adopted. It came into force on Agency is Cooperation, 28.04.2004. The Law is being 132,985,920.00 (AM Аlеksаndrа applied. It prescribes the RSD Pоpоvic)]. establishment of a Republic Committee, as an independent and autonomous body that will ensure its implementation. The Committee was formed on 18.01.2005 and comprises nine members and a technical service. The Committee has passed a number of regulations. In addition, registers of property and gifts of officials have been introduced. On 6.06.2006, the Government adopted the Action Plan for the Implementation of NJRS, which contains a list of envisaged activities. 41 The Government adopted the Bill on the Anti-Corruption Agency (19.10.2006) and sent it to SNP for adoption. This law envisages that the responsibilities and functions of the Republic Committee for resolving the issues pertaining to the conflict of interest are taken over by the Anti- Corruption Agency.

2.5.2 Adopt and implement a MJ [Department а) Adopt Action Plan (Serbian National Parliament comprehensive of Normative for Implementation of adopted the Resolution on anticorruption Affairs and National Anti- formulating a National Anti- strategy and International Corruption Strategy Corruption Strategy in subsequently detailed Cooperation, and sectoral action December 2005. In July 2006, Action Plans, notably (AM Аlеksаndrа plans; b) adopt the the Commission for the through establishing a Pоpоvic), in law on anti- Implementation of the Anti- competent body for cooperation with corruption body. Corruption Strategy was implementation. the GRECO formed.) а) Production of the Commission for Action Plan is in its final the stage; b) Please refer to Implementation Priority 2.5.1. of National Anti- Corruption Strategy (Zоrаn Stојkоvic, President of Commission and Аlеksаndrа Pоpоvic, Deputy President of Commission)] Mid-term priorities 2.5.3 Ensure full compliance MJ [Department (Please refer to with the UN Convention of Normative Priority 2.5.1) on the fight against Affairs and corruption International Cooperation, (AM Аlеksаndrа Pоpоvic)].

Defence reform Mid-term priorities 2.6.1 Continue restructuring MD [1. 1. Produce and pass Boris Tadic, President of 1. Approved 4. Budget 4. Funds 1. Stage 1 by 2007; 1. Insufficient and reforming armed Directorate of relevant strategies Serbia, signed the framework share in GDP funds paid for from Stage 2 by 2010 cooperation with forces, including, when Strategic and doctrines document on Serbia’s for financing severance donations ICTY; unresolved necessary, Planning (National Security accession to Partnership for the Army is pays and in the status of KM; rationalisation (bearing (colonel Mitаr Strategy, Strategic Peace on 14.12.2006. 2.4% pensions and amount inadequate 42 in mind social Kоvаc); Overview of Defence 1. In the area of defence lay-off of of regulations and implications), Military and Army Doctrine) policy, the following has civilians: 88,075.0 unregulated transformation and Intelligence and legislation (Army been achieved: bilateral officers - 0 EUR status of MD in privatisation of military Agency (colonel Law, Defence Law, and multilateral 196,000,000.00 and Serbia’s legal resources and military Zdrаvkо Law on Intelligence cooperation with RSD; NCOs – donation system; limited industry as well as Јеlisаvcic); and Security Partnership for Peace and 89,500,000.00 of Great financial increased transparency Military Security Agencies); provide NATO Member States has RSD; for lay-off Britain of resources for of civilian oversight. Agency (Svеtkо necessary funds for been intensified; Centre for of civilians – 7,194.86 defence needs; Kоvаc); 2. reform. 2. Implement Cooperation with ICTY has 225,700,000.00 EUR 5. postponed Defence Policy envisaged been established; production RSD; 5. adoption of Department (AM organisational of Development Programme of Following amendments to Snеzаnа changes; intensify Intelligence and Security Budget revision the laws on Sаmаrdzic international military System of MD and the Serbian there was an ministries and Mаrkоvic); 3. MD cooperation; 6. Armed Forces, as a sub- increase by Serbian Armed Secretariat, Establish stable system or part of Serbia’s 20% as of Forces. Legal relations with security system, with 1.09.2006; Administration domestic and organisational structures in National (Slаvicа international public. MD – Military Security Agency Investment Јеrkоvic); and Military Intelligence Plan envisages 4. Human Agency – as well as the funds for the Resources General Staff of the Serbian airforce repairs Department (AM Armed Forces and Zоrаn Јеftic); 5. (Reconnaissance Directorate maintanance. Supply – G2) and Directorate of Department Military-Police Affairs. The (colonel general objective of the Slоbоdаn project is to create a modern, Mаrkоvic, professional and efficient Department intelligence and security Chief); 6. Public system in Serbia in Relations conformity with the highest Directorate European standards. A task (colonel Zоrаn force in charge of coordination Puhаc, of production of the 2010 Representative Development Plan for Defence Chief)]. System has been formed. 2. In accordance with Serbia’s interest to speed up the process of reform of defence system, as well as to ensure synchronicity of the reform process and Euro- Atlantic integration, a new institutional framework of cooperation has been launched – SCG-NATO Defence Reform Group. The Group became operational in February 2006 with a view to resolving concrete problems in the area of defence reform and building an efficient system capable of joining Euro-Atlantic integration processes. 43 At the fourth meeting of the Group, held in June 2006, the Group changed its name into Serbia-NATO Defence Reform Group and its office was established within MD’s Defence Policy Department, as a support to the overall work of the Group. MD recognises the Group as a strong mechanism of institutional cooperation with NATO as well as a mechanism of development of specific projects and implementation programmes concerning solutions presented in the Draft Strategic Overview of Defence of the Republic of Serbia. The Government passed a Resolution on adopting the text of the Agreement on the Establishment and Status of the Military Office for Liaison with NATO in Belgrade. In cooperation with MFA, the harmonisation of the text of additional arrangements under the Agreement on Transit of NATO Peace Forces over the Territory of Serbia is in progress. 3. As regards legislative and standardisation area, the following legal documents have been passed: Law Amending the Army of Yugoslavia Law (banning the possibility of having an unassigned civilian, enabling faster reduction in the number of civilians in the army); reducing the obligatory military service from nine to six months and from 13 to 9 months in case of serving without weapons or in civil service); The Law Amending the Law on Military Schools and Military Institutions of Scientific Research (reducing the command-headquarter education from two to one 44 year); The Law Prohibiting the Development, Production, Warehousing and Use of Chemical Weapons. As regards organisational changes: in MD, the Intelligence and Security Department has been dissolved, whilst the Military Security Agency, Military Intelligence Agency, Directorate of Budget and Finance, Public Relations Directorate, Supply Directorate, Defence Infrastructure Directorate are directly subordinated to the Defence Minister. In the General Staff of the Serbian Armed Forces, formation positions of the Deputy Chief of General Staff Divisions and their responsibilities have been transferred directly to the Chief of General Staff of the SAF. The transfer of borders from the military to MI is in progress. 4. As regards human resources, a considerable reduction in staff in MD and SCG Army took place in 2006, i.e. by 8.4%, as follows: officers by 11.5% (980 officers), non-commissioned officers by 8% (750 NCOs), contracted soldiers by 12.3 % (696 soldiers) and civilians by 4.4 % (531 individuals). 467 persons entered the defence system from Montenegro (273 officers and 194 NCOs), 281 persons from Military Academy and 136 NCOs from secondary military schools. The project of army professionalisation by 2010 has been produced. The army professionalisation in the Land Safety Zone has been completed through the distribution of professional soldiers and conscripts exclusively on voluntary basis. A Language Centre (by NATO 45 standards) and Centre for Computer Training, Testing and Use (by ECDL standard) have been formed within the Military Academy. 5. In the area of material resources: the number of locations of SAF units and institutions has been reduced; due to insufficient funds, the development and modernisation of armament and military equipment are lagging behind, the standard of living of SAF professional members and MD staff has fallen, stocks of material reserves have been reduced and there have been some problems in the realisation of tasks pertaining to logistic support to SAF. Pursuant to the Agreement on Mutual Assistance between the US State Secretary and the Minister for Defence, the dynamics of destruction of light portable rocket sets "STRELA-2M has been determined. Accordingly, in 2005, 1,000 items were destroyed and the destruction of 2,000 items of «S-2M» is underway, in accordance with the 2006 plan. Pursuant to the Agreement concluded between MD SCG and NATO agency NAMSA, the destruction of landmines continued (in 2005, a total of 516,352 mines were destroyed). So far, a total of 1,067,089 landmines have been destroyed, or 80% of the quantity of landmines envisaged for destruction. 6. As regards public relations: The quality of the information has improved and the process of responding to the media requests has been accelerated, making MD one of the most open ministries, in spite of its specific field of 46 work; a regular practice of holding press conferences has been established, and the selection and focus of themes covered by the media show consolidated public trust in consistent implementation of reforms of the defence system in Serbia and that there is a strong commitment to defy vilification of MD and SAF.

3. HUMAN RIGHTS AND PROTECTION OF MINORITIES No. Priority Responsible Necessary activity State of implementation Financial aspect Deadline Obstacles institution / Total Republic CARDS department / Budget and other person external funds A B C D E F G H 3. 1. Human rights and protection of minorities Short-term priorities 3.1.1 Ensure uniform effective MJ HMRB – Build necessary The job organisation in HMRB MJ – MJ – MJ – HMRB – 4th HMRB – Limited implementation of [Department of capacities to monitor already envisages positions 398,000,000.00 311,000,000.00 87,000,000.00 quarter of 2007 number of staff obligations, arising out Corrections implementation and for reporting with reference to RSD members and of (Bоrisаv Mаric, reporting as per European ECHRF and ECPT, but they limited financial membership of the Acting Director)]. Convention on Human are not filled yet. resources. Council of Europe, MI [Internal Rights and Fundamental Systematisation of the Office MJ – throughout the State Control Police Freedoms (ECHRF) and of the Agent before European Overburdened Union, notably with Department European Convention for Court for Human Rights prison capacities. regard to the European LJubinkо Nikоlic, the Prevention of Troture (ECHR) envisages jobs for Convention on Human Department and Inhuman and four professionala, which is far Rights and Head]. HMRB Degrading Treatment or below the average in other Fundamental [Department of Punishment (ECPT); countries that recognise the Freedoms and the International build necessary competences of the Court. European Convention Cooperation capacities to carry out Staff training is done on ad for (Mаriја Vuјnоvic, inter-sectoral cooperation hoc basis; it is not systematic the Prevention of Assistant with a view to and does not meet the needs. Torture. Director)]. implementing provisions Technical needs of the Office of these conventions; have been assessed. build necessary MJ – Capacity building is capacities for the Office of underway. The Department of the Agent before Corrections is implementing European Court for recommendations of the Human Rights; devise a European Committee for the system of indicators for prevention of Torture and reporting as per ECHRF Inhuman and Degrading and civil servant training. Treatment or Punishment in all MJ – Build necessary correctional institutions. capacities in order to Positive legislation conforms improve prison conditions. with international standards, a number of reconstructions of the existing facilities have been completed and some new pavilions have been built in order to improve living conditions in prisons in accordance with the set standards. There has been continued education of staff in how to treat inmates in accordance with the European prison rules and CPT standards. As a legal 48 successor of the state union of Serbia-Montenegro, Serbia automatically became a member of the Council of Europe, undertaking obligations stemming from the European Conventions on Human Rights and Fundamental Freedoms and on the Prevention of Torture and Inhuman and Degrading Treatment or Punishment. With a view to relieving prison capacities and improving material conditions in prisons, the Department of Corrections has established a Commission for Infrastructure and System Operation. In 2006, the following prisons were reconstructed or built: in the Correctional Institution in Sremska Mitrovica a pavilion was built with 60 rooms to accommodate 2 inmates each; a pavilion was built in the Correctional Institution in Pozarevac-Zabela in November 2006 to accommodate 200 persons (it officially opened on 11.01.2007); the reconstruction of psychiatric ward 4.3. of Special Correctional Hospital in Belgrade was completed in March 2006; the reconstruction of detention facility of the Correctional Institution (CI) in Valjevo is complete; the reconstruction of reception area in the old pavilion in Padinska Skela was completed in December 2006; the reconstruction of the room for visitors, bakery and hospital in CI in Zabela is complete; the reconstruction of toilets in CI in Valjevo was completed and the kitchen for detainees in DP in Belgrade had been moved out. In 2006, complete reconstruction of the Special Detention Unit in the District 49 Prison in Belgrade started and it should finish by March 2007, as well as the reconstruction of two detention wards in the District Prison in Belgrade with a deadline in December 2007. The construction of detention unit in Nis should finish in December 2007, while the construction of the detention unit and reception area in Sremska Mitrovica should finish in May 2007. The main construction project of a new prison in greater Belgrade is finished. The work should start in February 2007 and finish in mid-2008. With a view to relieving the capacities of correctional institutions further some new projects are underway in CI in Sremska Mitrovica, such as: the construction of the facility for treating inmates with addiction problems (to be completed in November 2007), the construction of residential ward with an out-patient clinic in the semi-open section (to be completed in November 2007), and the reconstruction of the First Pavilion (to be completed in December 2007). In the special prison hospital in Belgrade, the reconstruction of psychiatric ward 4.4. has started, to be finished in March 2007 and of ward 4.5, to be finished in December 2007. In the District Prison in Novi Sad, the construction of pavilion to accommodate prisoners and accompanying reception, in- patient clinic and a ward for persons with addiction problems, to be completed in July 2007. In the District Prison in Subotica, there is a plan to build a facility to accommodate inmates, which should be completed in June 2007. In the District Prison in Novi Pazar, the construction of new prison building has 50 started, to be completed in May 2007. In accordance with the adopted Development Strategy, the Department of Corrections is planning a project of building three new prisons by June 2007. MI – In accordance with the obligations undertaken by SCG upon signing ECPT, which came into force on 01.07.2004, at the proposal of the Office of the Inspector General within the Serbian MI and by Minister’s decision, the Commission tasked with the implementation of the ECPT recommendations has been formed. The main task of the Commission is to get actively involved and investigate alleged cases of torture by the members of the law enforcement. Having had detailed preparations and consultations with the representatives of OSCE Mission to Serbia, the Commission has visited all organisational units of the Ministry that have detention facilities in order to get a direct insight in the conditions in these facilities, to view the documentation of detainees, hygiene in the facilities, observation of fundamental human rights (such as: whether the family has been informed, whether the lawyer has been informed, whether medical health care has been seeked and provided) etc., interrogation rooms (in order to check if any unconventional objects were used during interrogations and if detainees are protected against ill- treatment and torture). The report will be submitted to the Minister and Assistant Minister in charge of the Department of Police Internal Control, who is also Serbian coordinator for 51 police- and human rights- related matters with the Council of Europe. The Commission’s field of activities spreads across the entire Ministry and its task is to take action when there are indications that police has used torture. The Commission has proposed a project entitled Expansion and Adaptation of Detention Facilities.

3.1.2 Take transparent and MJ HMRB – Build capacity to In the HMRB job MJ – MJ – 50,000.00 MJ – HMRB – 3rd HMRB – Limited comprehensive [Department of monitor the situation and systematisation there is a 100,000.00 50,000.00 quarter of 2007 funds. activities in all alleged Corrections to report in all cases of position for a person in charge cases of ill-treatment. (Bоrisаv Mаric, alleged ill-treatment; carry of monitoring and reporting Assistant out necessary training, with reference to ECPT. Director) Twinning Programmes MJ – Work on providing MI [Internal and study trips with a publicity of information is in Control Police view to adopting EU progress. In accordance with Department standards in this area; the recommendations of the (LJubinkо create a database in this European Committee and Nikоlic, area, create indicator application of positive Department system and reinforce legislation, the Department of Head)]. HMRB technical capacities. MJ – Corrections is implementing [International Provide publicity of all the disciplinary procedures Cooperation information. MI – Draw up against the employees in the Department a regulation. cases of ill-treatment of (Mаriја Vuјnоvic, prisoners and detainees. Assistant Within the regular training and Director)]. professional improvement of employees in the Department of Corrections, carried out pursuant to the newly established Training Centre, special attention is paid to staff education about when and how to use coercion, i.e. how to treat detainees and prisoners. The New European Prison Rules have been presented to the department heads in all correctional institutions, in the organisation of the Council of Europe. Their obligation is to educate all correctional staff in order to enable direct application of these rules. With a view to preventing torture of prisoners, at the initiative of the Department of Corrections, a Regulation on measures for maintaining peace and order 52 in correctional institutions was adopted on 21.11.2006. The Law on Enforcement of Penal Sanctions prescribes the obligation of the physician to keep records of injuries inflicted on inmates. The recommendation of CPT to enter prisoners’ complete statements in their records, an unbiased medical report and the physician’s conclusion has been adopted. According to the procedure, in the case of inflicted bodily harm, if there are elements of a criminal act, criminal charges should be brought immediately to the competent Prosecutor’s Office pursuant to CPC, and if there are elements of unauthorised use of force or extensive use of force, disciplinary charges should be brought against the employee and he/she should be subjected to the disciplinary procedure. In MI, in accordance with the Police Law, internal control is performed by the Department of Police Internal Control. This Department, through its police staff, has the authority on the entire territory of Serbia. Special attention is paid to the cases of alleged abuse of office, corruption and torture.

3.1.3 Strengthen the internal MI [Internal Pass a regulation. Provisions of Articles 171-179 control services dealing Control Police of the Police Law prescribe the with ill-treatment by law Department handling, the scope of activity enforcement agents. (LJubinkо and the authorisations of Nikоlic, police staff in the Department Department of Police Internal Control Head)]. Division. The job organisation envisages 100 jobs in the Department and in four regional centres (Belgrade, Novi Sad, Nis and Kragujevac). At the moment, 56 positions are filled (November 2006). The 53 Serbian National Strategy for EU Accession also emphasises that capacity building in this department is imperative, as it currently lacks adequate staff, technical equipment for pro-active investigations and sufficient IT equipment and logistics to perform its tasks. The Department has proposed a project of its modernisation and strengthening within the IPA Project. This primarily means clear scanning of administrative capacity, current situation and needs of the Department. Also, in cooperation with the OSCE Mission to Serbia, procurement of IT equipment for regional centres is underway (to be completed in early 2007). Since it was founded in June 2003 until 20.10.2006, The Department of Police Internal Control (formerly, the Bureau of Inspector General and the Inspectorate General of the Public Security Department) received 8,608 cases (of which 7,916 cases have been processed, and 692 are pending). The percentage of founded cases is relatively high, 13%, which is probably due to the fact that internal control did not exist before June 2003. In the same period, the Department has brought 128 criminal charges against 183 individuals on suspicion that they have committed 234 criminal acts. Out of this number, the Department has brought 7 criminal charges against 8 police officers on suspicion that they have abused their office and 2 charges of criminal acts of torture and ill- treatment. In addition, the Department acts upon requests for submission of 54 information of public importance, pursuant to the Law on Free Access to Information of Public Importance. 3.1.4 Improve prison MJ HMRB – Please refer to The job organisation in HMRB MJ – MJ – MJ – HMRB – 3rd HMRB and MJ – conditions, in particular [Department of Priority 3.1.2. MJ – already envisages positions 113,000,000.00 26,000,000.00 87,000,000.00 quarter of 2007 Limited funds. as regards vulnerable Corrections Develop prison capacity. for monitoring and reporting RSD RSD MJ – 2007 groups, such as juvenile (Bоrisаv Mаric, with reference to ECPT, offenders. Acting Director)]. Convention on Childrens’ HMRB Rights and to monitor the [International situation and provide Cooperation vulnerable migrant groups with Department access to their rights. MJ – (Mаriја Vuјnоvic, Living conditions in prisons Assistant have improved, a number of Director)]. reconstructions of existing and constructions of new pavilions have been completed, with compliance to the set standards. A Committee for Juvenile Justice has been established, which is trying to apply new legislation, improve ocnditions in correctional institutions for juvenile offenders and improve existing methods of upbringing and education of this group. Continuous education and training of the employees in the Correctional Institution for Juvenile Offenders and in the Youth Authority in Krusevac is organised in cooperation with UNICEF. The new Law on Juvenile Offenders and Legal Protection of Minors in the Criminal Justice System (Official Gazette of RS, No. 85/05) harmonised juvenile justice and administration systems with international standards and human rights. There is a special work programme for juvenile offenders, which connects juvenile correctional institutions and social services and institutions, in terms of monitoring the behaviour of young people before starting serving their sentences, the development of individual 55 treatment programmes in these institutions through the establishment of professional teams to work with juveniles depending on their specific needs, as well as in terms of integration into the community. The Middle-of-the-Road House project is underway. It will provide a more successful adjustment of this population to the life in the community after they have served their sentences by providing them with accommodation and by monitoring their behaviour. 3.1.5 Ensure appropriate MJ HMRB – Please refer to The job organisation in HMRB MJ – MJ – MJ – HMRB – 3rd HMRB – Limited monitoring of prison [Department of 3.1.2. MJ – It is already envisages a position 177,000,000.00 90,000,000.00 87,000,000.00 quarter of 2007 financial conditions for long-term Corrections necessary to provide for monitoring and reporting RSD RSD MJ – 2007 (to resources. inmates and for (Bоrisаv Mаric, capacity. with reference to ECPT. MJ – submit to SNP the MP – Provision of organised crime Acting Director)]. Construction of correctional Bill on Special necessary inmates. HMRB institution for persons who Prison Regime for funding. [International have been found guilty of Organised Crime Cooperation committing acts of and War Crime Department organised crime is Offenders). (Mаriја Vuјnоvic, underway. The facility has a Assistant capacity of 200 inmates who Director)]. have been individually sentenced to prison. A special department is envisaged within the Department of Corrections. It will be in charge of monitoring and supervision of prison conditions in prisons for those serving longer prison sentences and for those convicted of committing acts of organised crime. Department of Corrections, in cooperation with OSCE and domestic experts, has drawn up a Draft Law on Special Prison Regime for Persons Convicted of War Crimes and Acts of Organised Crime. The recommended amendments to the Criminal Procedure Code adopted by the Government on 14.09.2006 and forwarded to SNP for adoption, open up a possibility to pass a special law governing the administration of prison sentences for organised crime. 56 The Draft Criminal Procedure Code has been adopted by the Government and sent to the parliamentary procedure, so that the Draft Law on Special Prison Regime will be sent for adoption. Finalisation of works on the building with special security measures within the Correctional Institution in Pozarevac (Zabela) is underway. It will accommodate prisoners serving sentences for committing crimes with elements of organised crime.

3.1.6 Ensure further training MJ Equip existing capacities. The Training Centre 2006 Plan 8,000,000.00 4,000,000.00 4,000,000.00 of prison staff, as well [Department of for the Department of RSD RSD RSD as improvement of Corrections Corrections Staff has been facilities for special (Bоrisаv Mаric, completed. In 2007, according needs. Acting Director)]. to the Training Centre Plan, there will be a continuous training for prison wardens and heads of wards in correctional institutions through lectures and seminars. In 2007, there will be seven training courses for about 250 trainee guards from all correctional institutions, who will take exams upon course completion. In order to get the title of supervisor in the security service, a programme has been designed which comprises an entrance exam, theoretical and practical training and a final exam in May 2007. In addition, the training of trainers in the Training and Employment Centre is envisaged, as well as education of physicians and medical staff working in correctional institutions and training of commissioners administering alternative sanctions (public service and probation with protective supervision). 3.1.7 Implement the MJ Pass regulations. Law on Enforcement of Penal 600,000.00 300,000.00 300,000.00 legislation governing [Department of Sanctions (Official Gazette of RSD RSD RSD serving prison Corrections RS, No. 85/05), which came 57 sentences. (Bоrisаv Mаric, into force on 01.01.2006, is Acting Director)]. in accord with the international standards. In fact, the law prescribes maximum protection of rights of the sentenced persons by introducing the appellate procedure and court protection. Furthermore, the Minister for Justice has passed a Regulation on house rules in correctional institutions and district prisons, based on international standards in the area of administration of criminal sentences and protection of human rights. Having regard of the implementation of legal and by legal acts, international standards in the area of observance and protection of the rights of prisoners and detainees, CPT standards, application of European Prison Rules (minimal rules in the treatment of prisoners) the Department of Corrections organises the training for the staff of correctional institutions. - The following documents have been passed: 1. Regulation on house rules in correctional institutions and district courts (Official Gazette of RS, No. 27/2006), which came into force on 08.04.2006. This regulation lays down the way of life and work in correctional institutions, district courts and the correctional institution for women, in accordance with international standards. 2. Regulation on violations of disciplinary rules and on the procedure concerning convicted persons (Official Gazette of RS, No. 59/2006), which came into force 19.07.2006. It prescribes in detail the disciplinary 58 accountability of persons sentenced to prison, disciplinary procedure and disciplinary measures towards convicted persons, with a view to providing protection of their rights. 3. Draft regulation on the supervision of institutions has been submitted to RSL. Supervision is a planned and continual activity of the Supervision Division of the Department of Corrections and is of key importance to the overall functioning of the Department. The regulation lays down the supervision procedure in detail. In the production of this regulation, MJ relied on positive legislation, new European Prison Rules and experiences of the countries with a developed system of administering sentences in criminal cases. 4. Draft regulation on education and professional improvement of the Department of Corrections staff has been produced. Its review is in progress, after which it will be sent to RSL. The regulation lays down conditions for education and professional improvement of employees carried out in the Training Centre, the main curriculum and exams to be taken by trainees and employees. The Department has drawn up a proposal of the regulation on measures for maintaining peace, order and security in prisons. In addition, court protection has been established against a decision violating the right while serving a prison sentence that is guaranteed under the Law on the Administration of Corrections. Authorised persons from the Supervision Department of the Department of Corrections control the 59 application of legislation as part of their regular annual work plan. 3.1.8 Adopt comprehensive MLESP MLESP – Adopt 1) anti- MLESP -1) The Law has been MLESP – 1) MLESP – 2) HMRB – HMRB –2007 MLESP - 1) anti-discrimination [Department of discrimination law adopted and it is in force No funding is 3,950,000.00 400,000 EUR There are no legislation. the Protection of concerning persons with (Official Gazette of RS, No. needed for the CARDS obstacles to the Persons with disabilities; 2) Law on 33/2006 of 17.04.2006); 2) implementation 2005/06 implementation of Disabilities (AM Children’s Ombudsman. Law on Children’s of this law. the Law. Slаdjаnа HMRB – Adopt a Ombudsman has been Mаrkоvic) and comprehensive anti- prepared in the form of Social protection discrimination law. proposal and it is in SNP. Department (AM HMRB – A feasibility study LJubоmir and the analysis of legislation Pејаkоvic]. have been completed, and the HMRB text of the framework Anti- [International Discrimination Law has been Cooperation drawn up. Department (Mаriја Vuјnоvic, Assistant Director)].

3.1.9 Implement media MC [The Media MC – а) Intensify MC – b) Amendments have MC – MC – 85 MC – а) MC – Lack of legislation. Department (AM supervision of the been made to the Public 2,500,000.00 million RSD Permanent staff, funds and Milоs Јаnkоvic)]. implementation of the Information Law with the activity; c) to start cooperation with RBA (Nеnаd Public Information Law; b) article clearly laying down the in 2007; d) MC, the media owners Cеkic, RBA Amend the Broadcasting general interest in the area of together with RBA – The Council Law; c) Provide incentive information. The Law was journalists’ Agency has not President). measures for the amended twice in 2006. A associations – end solved the protection of public debate about the need to of 2007 problem of interest in the area of establish a self-regulatory appropriate office infromation; d) Take body for the protection of space, modern measures to provide and journalists and monitoring their technical strengthen independence work is underway. equipment and and professionalism of RBA – SNP adopted the Law procurement of a the media and Amending the Broadcasting vehicle for field accountability of Law on 29.09.2006 (Official work to be used journalists in accordance Gazette of RS, No. 85/06), when performing with the code of ethics prescribing that a person control of and the law. RBA – authorised by the RBA Council broadcasters on intensify supervision of will be able to enforce the the entire territory the implementation of the execution of the RBA Council of Serbia. There Advertising Law; decision if the broadcaster is a need for implement decisions of does not comply voluntarily. more staff in the RBA Council on The previous law did not RBA, but due to revoking broadcasting guarantee this right, i.e. the the lack of office licences or prohibition of Agency did not have an space no new broadcasting. adequate mechanism to employees have administer its decisions. been taken on. Necessary regulations, which Training and RBA will apply while professional performing its control over improvement of broadcasters’ work, are being staff is of key 60 prepared. importance as - broadcasting is a Comment of the European new area and Commission of July 2006, exchange of “Amendments to the experiences with Broadcasting Law adopted in European August 2005, contain colleagues is measures that do not support imperative. the independence of electronic media, especially at the municipal level… There have been further delays in the privatisation of local media, which are currently under the control of local governments. “ RBA’s reply: Amendments to the Broadcasting Law that were adopted on 30 August 2005 prescribe the obligation of radio and/or TV stations of local and regional units to be privatised no later than 31 December 2007. The deadline envisaged for privatisation does not violate the independence of the electronic media at the municipal level because if the deadline is missed, RBA will revoke their licences to broadcast, in accordance with Article 96 of the Broadcasting Law. - Comment of the European Commission of July 2006, “Amendments adopted on 20 July 2006 are incompatible with European standards, as the Agency is under direct control of the Government with regard to budget adoption and therefore gives the authority to the Council to suspend its members appointed by the Parliament.“ RBA’s reply: The said amendments to the Broadcasting Law envisage that the RBA Council can temporarily suspend one of its members if criminal charges have been brought against him/her for committing an act that make him/her unworthy to be a member of the Council. 61 Therefore, the comment about the incompatibility of the said provision with European standards is unfounded, considering that the law prescribes the procedure whereby only the National Parliament can dismiss a member of the RBA Council. - After the transformation of PU RTS into the Broadcasting Organisation of Serbia (BOS) and the Broadcasting Organisation of Vojvodina (BOV), they have been entered in the register kept in the Commercial Court in Belgrade; RBA has approved their statutes, chosen the members of Management Boards and recommended the members of Programme Boards. The transformation is not over yet as BOS-RTS and BOV-RTNS have not signed agreements with the Serbian Property Directorate pursuant to Article 85 Paragraph 3 and Article 94 Paragraph 3 of the Broadcasting Law, on the use of real estate and broadcasting infrastructure (buildings, aerial systems, radio-relay systems etc.) 3.1.10 Ensure effective RBA (Nеnаd 1) Pass regulations; 2) Comment of the European 2) The 2006 RBA cannot be RBA - 1) 2007; 2) independence of the Cеkic, RBA Build administrative Commission of July 2006, 6,600,000.00 Financial Plan financed from 4th quarter of 2007 Broadcasting Council, Council capacities; 3) Learn “RBA failed to comply with the envisages part any other as President). about the laws, ruling of the Serbian Supreme of funds for sources but well as fair and regulations and Court to revoke RBA’s administrative the Budget of transparent allocation of experiences of other decision to prohibit capacity Serbia and the broadcasting broadcasting agencies broadcasting and passed a building. issue of radio frequencies for media and organisations of new decision on prohibiting and TV operators. public broadcasting broadcasting retroactively.“ broadcastin services in Europe and RBA’s reply: The Law licences. worldwide; 4) Provide prescribes that administrative modern technical procedure can be initiated equipment and a field before the Supreme Court of vehicle so that RBA can Serbia against a decision of perform monitoring in line the RBA Council. Like all other with European standards. legal entities, RBA is obligated to comply with the decisions of the Supreme Court of Serbia as it is the court of highest instance in the country. RBA 62 did comply with the Court ruling, i.e. RBA reviewed its decision and passed a new decision to prohibit broadcasting. It did not, however, prohibit broadcasting retroactively nor did it extend the duration of the prohibition, but confirmed that the prohibition to broadcast refers to the period of 30 days of the day when the measure of temporary revocation of the licence to broadcast was pronounced, pursuant to Article 63 of the Broadcasting Law. - Comment of the European Commission of July 2006, “Amendments adopted on 20 July 2006 are incompatible with European standards, putting the Agency under direct control of the Government with regard to budget adoption and thus authorising the Council to suspend its members appointed by the Parliament.“ Reply of RRА: Under the latest amendments to the Broadcasting Law, the Government gives the approval of the RBA Financial Plan. This does not mean that RBA is under the Government control as there already is an identical solution in domestic legislation – the Republic Telecommunications Agency (RTA). Besides, RBA has to cooperate with the Government as the Government also gives its approval of the amounts of annual fees for the obtained licences to broadcast TV and radio programme, issued by RBA. Furthermore, when comparing the ways of budget and financial plan control of regulatory bodies in Europe, we have established that there is no information that in any of 63 European countries the financial plan is discussed in the Parliament. The common model is direct financing from the Budget, controlled by the Government, without anybody else’s approval of the financial plan. 3.1.11 Ensure the full and MC Privatisation of the electronic timely transformation of [The Media media is in progress. It is the state-owned Department, AM being carried out at the broadcasting media into Milоs Јаnkоvic)]. dynamics prescribed by the public service law. broadcasters; complete the transformation of Radio Television of Serbia into a public service broadcaster in line with European standards. 3.1.12 Fully implement the law Commissioner Commissioner (MC – Commissioner – Protection of Commissioner, Commissioner on free access to public for Information of Provide supervision of the the right to access information MI – ASAP; (MC – There are Information. Public application of the law and has been ensured by the HRMB – administrative Importance activate mechanism of Commissioner, аs an Permanent task; obstacles to the (Rоdоljub accountability in the case independent body. (MK – BIА – During 2007 supervision of Sаbic). [MC2 of infringement. Supervision of the infringement (according to Government Secretary infringement accountability is accountability. Art. 45 of the General – Activate the not provided by the competent Government Law on Free mechanism that would ministry. Secretary General of General Access to ensure compliance with the Government – The Secretary – Information of the Commissioner’s mechanism ensuring that There are Public decisions. Chair of the Commissioner’s decisions are administrative Importance); Government Commission administered is not in place. obstacles to Government for Office Space and The Chair of the Government administering Secretariat Director of the Republic Commission for Office Space Commissioner’s General (Art. 28 Property Directorate – and Director of the Republic decisions, and of the above Provide additional office Property Directorate – the Government Law); Chair of space. Inadequate office space for is legally the Government HRMB – The General the Commissioner’s Bureau. authorised to Commission for Professional Improvement HRMB – Civil servants do not ensure that this is Office Space Programme for Civil possess adequate knowledge done. and Director of Servants envisages of the law. Chair of the the Republic training in the application MI – Draft Law on Personal Government Property of the Law on Free Data Protection is finished. Commission for Directorate (Art. Access to Information of Adoption of this law is a Office Space and 34 Para. 4 of the Public Importance. MI – precondition for drawing up Director of the above Law)]. Pass the law on personal the Draft Law on Republic HRMB (Art. 42 data protection. BIA – Confidentiality of Information. Property of the above Pass the law on secrets BIA – A task force has been Directorate – lack Law). and classification of established and draft of the of office space for MI [Government confidential information. law has been produced. the

2 The Commissioner’s list of competent institutions/persons includes the Ministry of Culture, the Secretariat General of the Government, the Chair of the Government Commission for Business Premises and the Director of the Republic Property Directorate. In addition, the Commissioner has submitted other inputs referring to these institutions. 64 Task Force for Commissioner’s the Bureau disables Implementation taking on of the Brussels necessary staff. Action Plan MI – Absence of (stems from the appropriate earlier regulations Implementation hinders quality Plan for the application of the European Law on Free Partnership Access to Priorities Information. (Priority no. BIA – Absence 8.5.4.)]. of appropriate BIA [Director’s regulations Cabinet (Rаnkо hinders quality Sоkоlоvic)]. application of the Law on Free Access to Information.

3.1.13 Encourage the MPALSG Pass a law on The Government has adopted the (Passage of the development of civil (Department of associations. Bill on Associations on 01.06.2006 Law is conditioned society organisations National Minority and sent it to the Parliament. The Bill by the dynamics financially and Rights, for the first time regulates the status of activities otherwise, notably by Registers and of foreign associations. The Bill fully following up the adopting the law on Associations) conforms to the highest international adoption of the associations, and standards (received positive new Constitution.) legislation on the legal assessments from CЕ and OSCE). status of foreign NGOs. It was prepared in full coordination and cooperation with the representatives of non-government sector. The Regulation on financing of responsibilities taken over by the Republic of Serbia (08.06.2006) prescribes that the Register of Organisations and Citizen Associations, which the Ministry of Human and Minority Rights used to be in charge of, is transferred to MPALSG. In view of this, a new Department of National Minority Rights, Registers and Citizen Associations has been established in MPALSG. 3.1.14 Adopt adequate MFIN Amend relevant The Law on Property legislation on the [Department of provisions of the Law on Restitution to Churches and restitution of property Property and Landplanning and Religious Communities (46/06) and ensure its full Legal Affairs(AM Construction (or pass a was passed on 25.05.2006. implementation, notably Nеbојsа new law on building land). The procedure of registration by addressing the issue Skоric)]. of dispossessed property of (state-owned) urban under the Law on Filing and 65 property. Registration of Dispossessed Property has been completed. The applications are being processed, and this will be followed up by a macroeconomic analysis of the financial impact of the Restitution Law. The new Constitution, as opposed to the old one, prescribes that the building land can be a private property. The Mortgage Law, which took effect in February 2006, will contribute to the further development of the real estate market and increased legal security. The novelty is that the mortgage can be established on an unregistered building if a building licence or a usage licence has been issued for it. The Republic Geodetic Institute (RGI) has the software which registers all mortgaged real estate. Work on the new Law on Proprietary Relations is completed. The new law will contribute to greater legal security and in a comprehensive and codified way it will regulate the rights pertaining to real estate. The draft will be sent to the Council of Europe experts for opinion. 3.1.15 Ensure adequate MI [Education HMRB – In cooperation HMRB technically supports HMRB – practical protection of Department with MES continue the work of the Republic 20,000 EUR minority rights and, (Drаgic realisation of planned National Minority Council. The from CARDS where necessary, Јоsifоvic, activities concerning project of Roma integration (integration of ensure cooperation at Department import of textbooks in involves 20 local self- Roma into the local and at the Head)]. minority languages; governments through the local self- provincial levels. MJ [Justice cooperation with designated coordinators. MJ – government Department (AM MPALSG on the Following Montenegro’s units). Zivkа Spаsic), implementation of proclamation of independence, In cooperation standards concerning on 5 June 2006, SNP passed a with the national minority councils; Resolution on obligations of Secretariat for continue cooperation with Serbian government authorities the MLESP, MCI, MES and in view of the responsibilities of Implementation MH on the the Republic of Serbia as a legal of National implementation of action successor of the state union Strategy (NS) plans for Roma. Serbia-Montenegro. On 8 June and CINJRS MI – Continue realisation 2006, the Government passed a (Milаn Skulic, of the planned by-lingual Regulation on the financing of Secretary training courses for police responsibilities transferred to the General)] officers.The competition Republic of Serbia from the former 66 MES, CPM, (ad) would be published state union, a Regulation on HMRB in languages of national establishing a Human and Minority [International minorities (as before) and Rights Bureau, which undertook Cooperation covered by the local some responsibilities of the Department media. When selecting former Ministry of Human and (Mаriја Vuјnоvic, future trainees, their Minority Rights, and a Regulation Assistant composition would reflect amending the Regulation on the Director)] the ethnic structure of the representative of Serbia- community they would Montenegro before the European work in. In order to Court for Human Rights and organise the courses, the establishing a representative of the following conditions must Republic of Serbia before this be met: a curriculum court. designed by international When performing its tasks, standards for police Serbian MI applies training and in line with constitutional and legislative current regulations, provisions concerning human cooperation with local rihgts and rights of minorities community when on the territory of Serbia. selecting candidates, As regards the implementation constant animation of of the Agreement on potential trainees and, Readmission, MI cooperates wider media coverage of and exchanges information police work and of the with the Bureau for Human new system of elementary and Minority Rights of the police training. Serbian Government. Special emphasis is put on the provisions concerning protection of human and minority rights, which are covered by all bilateral agreements on readmission that Serbia has signed. Cooperation through joint training and task forces has been established. A handbook for the treatment of returnees re-integrating into society is in the pipeline. 3.1.16 Implement the MLESP MLESP – Continue MLESP – The Action Plan for MLESP – The MLESP – 353 HMRB – 2007 MLESP – Funds Strategies [Employment application of: the 2005- the Improvement of Roma 2006 Budget to million RSD. have not been and Action Plans Department (AM 2010 Nаtional Position, to be implemented in support HMRB – 2,4 earmarked. relevant to the Rаdmilа Employment Strategy; the the area of social protection, is employment of million RSD Roma protection integration of Roma Bukumiric-Kаtic) 2005-2006 Аction Plan for being prepared. The Action risk groups (30,000.00 programmes are people, including and Social Roma Integration in Plan Proposal lays down the (Roma, EUR). carried out as returnees. Protection Education, Health following principles: enable refugees and integral parts of Department (AM Protection, Employment easier access to the rights returnees) is reform projects LJubоmir and Housing; Nаtional pertaining to social protection, 84,040,000.00 and programmes Pејаkоvic)] Action Plan for 2006-2008 and define mechanisms to RSD of social HMRB (adopted in April 2006); overcome a lack of personal protection. [International Time-table for using funds documents. Cooperation from donations and Within HMRB there is a Department transfers to compulsory Secretariat for the Roma (Mаriја Vuјnоvic, social protection National Strategy, and a job Assistant organisations from the position tasked with the issues 67 Director)]. Budget pursuant to the of Roma integration. Capacity Budget Law, intended for building in this area is the proactive employment necessary. Draft Strategy for programme; Agenda of the Integration and the National Employment Empowerment of Roma has Agency (NEA) for 2006 been produced and is (all documents contain a currently being revised. The special section about the Action Plans concerning employment of Roma). personal documents and Define part of Action Plan specific position of women for the improvement of returnees pertaining to the Roma position, to be agreement on readmission implemented in the area and internally displaced of social protection. persons from KM, as well as in HMRB – Finalise job the area of social protection, organisation in the media, information, culture Secretariat for Roma and anti-discrimination are National Strategy and completed. HMRB already has build necessary a Reception Office for capacities; adopt Draft returnees at the Belgrade Strategy for Roma Airport, but it is not organised Integration and within the institutional structure Empowerment; continue of the service although there is application of action plans a position tasked with in the area of education, especially vulnerable migrant employment, public health groups, including returnees. protection; adopt action Draft Strategy for Integration plan in the area of social of Returnees pertaining to protection, media and agreements on readmission is information, culture, anti- completed. discrimination, as well as action plans concerning personal documents and specific position of female returnees pertaining to the agreement on readmission and internally displaced persons from KM; do job organisation in the Reception Office for Returnees at the Belgrade Airport; adopt Integration Strategy for Returnees pertaining to bilateral readmission agreements.

3.1.17 Strengthen the HMRB Adopt the law on national The text amending the Rules 1st and 2nd quarter functioning of minority [International minority councils. of Procedure concerning the of 2007 National Councils. Cooperation election of national minority Department councils. The Law on National (Mаriја Vuјnоvic, Minority Councils is being Assistant prepared. 68 Director)].

3.1.18 Promote good MES [Education MES – Implement the MES – The following projects MES – National MES – 2007 MES – interethnic Development programmes of training are underway: а) Integration of Investment Insufficient funds relations, in and International and professional Roma in the education Plan 15.2 at the republic particular by taking Cooperation improvement of staff. system; b) Affirmative action; million RSD level to cover the adequate measures in Department (AM c) Roma assistent; d) (190,000.00 lack of financial the field of education. Vеsnа Filа)]. Integration of Roma children EUR): а) 2.7 resources at the HMRB and cooperation with Roma million RSD local level [International families; d) Application of the (34,092.00 Cooperation inclusion index in the work of EUR); b) 1.8 Department pre-school institutions; e) million RSD (Mаriја Vuјnоvic, National Action Plan for (22,728.00 Assistant Children. HMRB – MES takes EUR); Director)]. part in the work of National c) 2 million Minority Councils and has RSD enabled, at the proposal of (23,864.00 National Minority Councils, the EUR); import of textbooks in minority d) 2 million languages (Croatian, RSD Hungarian, Slovakian, (25,000.00 Bulgarian) and approved the EUR); e) 4 use of textbooks from KM. million RSD (50,254.00 EUR); f) 2,7 million RSD (34,090.00 EUR).

3.1.19 Promote participation of MJ [Justice MJ – Coordinate the MJ is taking certain actions MJ – No MJ – Permanent MJ – insuficient minorities in the Department (AM number of judicial regarding this issue, in order particular task. number of judiciary Zivkа Spаsic)] positions with to elect judges and recruit expenses. candidates. and law enforcement MI [Education representatives of staff from among ethnic bodies. Directorate national minorities in minorities. In addition, (Drаgic judiciary. seminars on the use of Јоsifоvic, MI – Continue realisation minority languages in judiciary Head)] of the planned by-lingual are being organised. In the training courses for police rule books on internal officers. The competition organisation and job (ad) would be published systematisation of the courts in languages of national of law, there are positions that minorities (as before) and require knowledge of a covered by the local minority language officially media. When selecting used in the court of law. High future trainees, their Judicial Council makes sure composition would reflect that, when proposing to SNP the ethnic structure of the candidates for judicial community they would positions, the number of work in. With a view to candidates from national improving the realisation minority groups increases. of these courses, as well MI – In the previous period, as programmes of the Ministry, in cooperation professional with OSCE Mission, has improvement, MJ plans to organised a number of by- 69 provide appropriate lingual courses for police literature in minority officers (Albanians) and the languages, select practice will continue for appropriate trainers and members of other national engage interpreters. minorities interested in this (Preconditions for type of training. Members of realisation of these national minorities had a activities are the same as “privileged status” during in Priority 3.1.15) entrance exams, i.e. due to a low turnout; even those who did not achieve good results were accepted. This practice will continue as long as there is a need to lower the criteria so that it reflects the ethnic structure of the community that the candidates will later be working in.

Mid-term priorities 3.1.20 Implement MPALSG HMRB – Implement the HMRB has produced Draft HMRB – there HMRB – 2007 MPALSG – In antidiscrimination (Department of law preventing Law on Prevention of Any is a possibility accordance with legislation. National Minority discrimination of persons Discrimination of Persons with to use the provisions of the Rights, with disabilities; Disabilities, and a feasibility CARDS 2006 Constitutional Registers and harmonise regulations study of its implementation, funds. Law concerning Citizen with the provisions of the while preparations for the implementation of Associations). law and the acquis public debate are in progress. Constitution. HMRB communautaire in this MPALSG – Under the [International area; build necessary Regulation on financing of Cooperation administrative capacity; responsiblities transferred to Department carry out campaign to the Republic of Serbia (8 June (Mаriја Vuјnоvic, present the law. 2006), the Register of National Assistant MPALSG – Harmonise Minority Councils has been Director)]. legislation with provisions temporarily taken over by of the new Constitution MPALSG, where the Group for referring to human and National Minority Rights has minority rights and been formed. MJ – The new freedoms; draw up a new Constitution envisages or amend the existing law positive discrimination of on protection of national members of national minorities minority rights and in order to establish their full freedoms; draw up laws equality and help maintain and regulations to their identity. regulate election rules for National Minority Councils.

3.1.21 Ensure the inclusion of MLESP MES – Build necessary MLESP – Administrative MES – MES – MLESP – For MLESP – 1), 3) , disabled or minority [Department of administrative capacity. capacity building is in 613,197,830.00 147,222,830.00 realisation of 4), 5), 6) 2007; 7) children in mainstream Protection of progress, through a gradual (regular) and programmes 2007 and 2008; 8) education; reform the Persons with establishment of professional 465,975,000.00 by the end of continous; childcare system. Disabilities (AM standards. One of the key (additional 2006, listed 9) 2007 Slаdjаnа priorities is the reform of child funds for under. 1, 2, 3, continuous 70 Mаrkоvic) and care system within the system realisation of 5 and 6 – a MES – 2007 Social Protection of social protection. The compulsory total of 1.7 HMRB – 2007 Department (AM reform will be carried out pre-school million EUR, LJubоmir through the following activities: programme) and in the next Pејаkоvic] MES 1. transformation of facilities three years [Milоs Јаnkоvic, for child accommodation (in another State Secretary the final stage of 3.5 million (legislative implementation); EUR. aspect of 2. development of foster care For project 7 in priorities); and adoption, as forms of care 2006 and 2007 Department of of children without parents 8 million EUR Pre-School and (realised in 2006); is planned. Primary 3. passage of new social For project 8 Education and protection law (scheduled for about 1.6 Upbringing 2007); million EUR is (AM Milkа 4. creation of conditions for the planned for the Аndric); application of the Law on next three Financial Juvenile Offenders and Legal years. Department Protection of Juveniles in MES – (AM Slаvkо Criminal Cases in the part 48,000.00 Kаrаvidic) – concerning obligations on the EUR (World financial aspect part of the social protection Bank). of priorities] system; 5. the project HMRB Protection of Children from [International Abuse and Neglect is Cooperation underway; 6. development Department projects of integral social (Mаriја Vuјnоvic, protection at the local level Assistant and the establishment of Director)] operational standards for the Centre for Social Protection are in their final stage. These projects are directly or indirectly connected with redifining of the system of child and youth protection; 7. the National Investment Plan covers the projects on improving child protection through supporting the development of alternative, non-residential forms of child protection and improvement of infrastructural conditions in the institutions of social protection of children; 8. the Fund for Social Innovations supports local projects of improvement of child protection; 9. the Law on Welfare for Families with Children has been effective since 2002. Its amendments are pending. MES – The debate on the Bill on Pre- 71 School Education and Upbringing was postponed because of the Constitution. In cooperation with the Fund for Education of Roma and MES, HMRB has orgnised a project in which 25 educational institutions take part with a view to improving the access of Roma children to pre-school education. 3.1.22 Continue to promote MLESP MLESP – Implement: The HMRB – The strategy and integration of minorities [Employment 2005-2010 National action plans are completed. A and good inter-ethnic Department (AM Employment Strategy and study of alternative forms of relations. Rаdmilа action plans for resolving disputes between Bukumiric-Kаtic)] integration of Roma in communities, especially HMRB education, health, mediation, has been prepared [International employment and housing and an international workshop Cooperation in 2005-2015. HMRB – to analyse the ways of Department Adopt and implement implementing such forms of (Mаriја Vuјnоvic, Strategy for Integration resloving disputes in Serbia Assistant and Empowerment of has been organised. Director)] Roma and adopt other action plans; support alternative forms of resolving disputes, especially mediation; support creation of interethnic councils pursuant to the Law on Local Self- Government.

4. REGIONAL ISSUES AND INTERNATIONAL OBLIGATIONS No. Priority Responsible Necessary activity State of implementation Financial aspect Deadline Obstacles institution / Total Republic CARDS department / Budget and other person external funds A B C D E F G H 4. 1. Regional issues and international obligations Short-term priorities 4.1.1 Fully respect the Dayton MFA Participate regularly in Most requirements contained Agreement. [Minister conferences on the in the Dayton Peace Vuk implementation of Agreement have been met. Drаskоvic; Annexes to Deyton General Agreement. Multilateral Directorate (Dејаn Sаhоvic); General Directorate of NATO (Brаtisаlаv DJоrdjеvic)] . 4.1.1.1 Strengthen regional MFA а) Draw up a law on а) A task force to draw up the а) 2007; b) May 2007 cooperation and good [Minister signing and administering law has been formed; b) From neighbourly relations. Vuk international agreements. November 2006 to May 2007 Drаskоvic; Serbia will chair the Black Sea General EU Economic Cooperation Directorate (BSEC). Serbia’s goal will be (Јеlа to strengthen cooperation Bаcоvic); between BSEC and other Directorate international organisations and of Regional to give encourage cooperation Initiatives with the relevant EU (Ј. institutions. A busy calendar of DJurickоvic meetings (27 in total) of Tuvic); various BSEC bodies is Directorate envisaged. of - Neighbourin The text of the mutual g Countries agreement on visas between (Mаја Serbia and Bulgaria has been Mitrоvic); initialled. Preparations for Economic negotiations concerning Multilateral conclusion of the mutual Directorate agreement on visas of Serbian (M. Mаlic)]. and Romanian Citizens are underway. 4.1.2 Conclude and MIER Conclude a single, CEFTA was signed on 18,411,653.97 9,193,380.94 Other Insufficient implement regional CEFTA. 19.12.2006 in Bucharest. RSD envisaged RSD granted funds: administrative 73 agreements with Serbia is one of its signatories. – demanded for budgetary costs of capacities; limited neighbouring countries, for budgetary 2006. (The business public notably on free trade, 2006 amount is trips of expenditure and cross-border actually the negotiatio employment of cooperation. funds that have n task new staff is been forces will MMF’s earmarked be born recommendation. (approved) by CLDP under the 2006 (US Budget Law Governm and refers to ent the financial Fund). costs of the said activities and include primarily the costs such as business trips, training, literature, technical equipment, communication costs, other services, in proportion to the size of the sector whose activities are connected with the production of the Plan of Implementation of Priorities and fall within the responsibility of this ministry. 4.1.3 Conclude and MI Sign and implement The following agreements on implement [Internation bilateral agreements on cooperation: 1. for preventing agreements with al cooperation with and combatting organised neighbouring countries, Cooperation neighbouring countries on crime, trafficking of drugs and notably on the fight and fight against organised psychotropic substances, against organised European crime, smuggling and terrorism and other serious crime, Integration human trafficking. crime with the Slovenian trafficking and Bureau in Governemnt; 2. on fighting smuggling. the Cabinet terrorism, organised crime, of Minister illegal trade in drugs, (Drаzеn psychotropic substances and Mаrаvic, precursors, illegal migrations Head of and other criminal activities Bureau)] Bulgaria; 3. for preventing illegal trade in drugs, psychotropic substances and precursors, illegal migrations and other criminal activities 74 with FYR Macedonia; 4. for preventing and combatting organised crime, drug trafficking, and terrorism between the Austrian Ministry of Internal Affairs and Serbian MI; 5. on combatting crime with the Slovak Republic; 6. for preventing and combatting organised crime, especially illegal trade in drugs and psychotropic substances, terrorism and other forms of criminal activity with Hungary. Ready to be signed are the following agreements on cooperation: 1. for combatting illegal trade and abuse of narcotics and psychotropic substances, terrorsm and other serious crime the Israeli Government; 2. to prevent and combat trans-border crime, international drug tafficking and terrorism with the Romanian Government; 4. to prevent and combat trans- border crime, international drug tafficking and terrorism with the Council of Ministers of Albania. 5. for fighting crime, especially its organised forms, between the Serbian and Greek Government. In the pipeline: 1. agreement between Croatian and Serbian Governments on police cooperation; 2. agreement between BiH Council of Ministers and Serbian Government on cooperation for fighting organised crime, illegal trade in narcotics and psychotropic substances, illegal migration and other crimes; 3. Memorandum of Understanding between Belgian and Serban Governments. 4.1.4 Conclude and MJ Conclude agreements on Agreements with the justice At this moment 2007 (planned There are implement [Departmen legal assistance in ministries of Slovenia, FYR it is not signing Protocols on insufficient funds agreements with t of criminal matters with the Macedonia, Bulgaria, Croatia, possible to Cooperation with in the budget of neighbouring countries, Normative justice ministries of Albania and Greece have envisage the Hungary, Romania the Ministry of notably on judicial Affairs and Bosnia-Herzegovina, already been signed. financial and Italy). Justice. As 75 cooperation. Internationa Romania and Hungary. Negotiations concerning the aspect. regards l schedule of signing other administrative Cooperation agreements with neighbouring capacity of the (AM countries are in progress. In Ministry of Аlеksаndrа the previous period, the Justice, there is Pоpоvic)] Protocol on Cooperation insufficient staff. between the Serbian Ministry of Justice and the Austrian Ministry of Justice, and the Protocol on Cooperation between the Serbian Ministry of Justice and the Ministry of Justice of Bosnia-Herzegovina have been signed. - Determining a schedule of signing Protocols on Cooperation with the Ministries of Justice of Hungary, Romania and Italy is in progress. In the future, it is planned to finalise the conclusions of protocols with the ministries of Russia, China and Turkey. - Protocols on cooperation are being signed between the ministries of justice. Therefore, there is no need for broader social consultations, nor for consultations with other ministries and non- government organisations 4.1.5 Conclude and MI [Border Conclude bilateral implement Police agreements on In this area, the Protocol on agreements with Directorate cooperation with Cooperation of Border Police neighbouring countries, (Dusаn neighbouring countries in has been signed. The notably on border Zlоkаs, the area of border cooperation will be established management. Head of management. through the experimental Directorate) Contact Bureau of Serbian MI ] (Border Police Directorate) and Romanian MI (General Inspectorate of Border Police).

4.1.6 Conclude and MSEP Conclude and implement The following agreements 4th quarter of 2007 implement agreements [Environme agreements with have been signed: 1. with neighbouring nt neighbouring countries. Agreement in the area of countries, notably on Protection environment protection environment Direcorate between the Governments of protection. (Mirоslаv Serbia and FYR Macedonia; 2. Nikcеvic, Memorandum of Director; Understanding between the Mirоslаv Serbian Ministry of Science Spаsојеvic, and Envrionment Protection 76 Assistant and the Albanian Ministry of Director for Environment on cooperation in European the area of environment integration protection; 3. Memorandum of and Understanding in the area of international environment protection cooperation between Serbia and the Italian )] Ministry of Environment and Territory. In the pipeline: 1. Agreement with the Bulgarian Ministry of Environment and Waters; 2. Agreement with the Croatian Ministry of Environment Protection and Physical Planning and Construction. To be signed: agreements with Romania, Hungary and Slovenia. There is a plan to sign a Memorandum of Cooperation with Montenegro. Ratification procedure for the agreement on cooperation in the area of environment with FYR Macedonia has been launched. In addition, a memorandum of understanding with Lithuania has been signed, under the programme of cooperation with the so-called “new” EU members.

4.1.7 Conclude and MCI [Water 1) Implement the 1) a. Framework agreement 3) 2007; 8) and 9) 2nd implement agreements Transport agreement on navigable on the river Sava with annexes quarter of 2007; 12) with neighbouring and routes on the river Sava (international) is being 2007; 14) 2nd quarter countries, notably on Navigation with Hungary and implemented. of 2007; 15) 1st transport. Safety examine the existing 1) b. Draft Agreement on quarter of 2007; 16) Department agreement on the river navigable routes of inland 2nd quarter of 2006 (AM Ivаnа Tisa; with Romania waters and their demarcation Tоmic); discuss revitalisation of with the Government of Rail and the river Begej; 2) Croatia has been prepared. Intermodal Agreement on road Negotiations start in Transport transport between Serbia November. Department and Hungary; 3) 2) Agreement on Road (AM Dејаn Agreement on road Transport between SCG and Lаsicа); transport between Serbia Hungary was signed on Road and Romania; 4) 20.03.2006 and it will come Transport Agreement on road into force with the exchange of Department transport between Serbia notes on ratification on both (AM and Croatia; 5) sides. Ratification process is Bоrislаv Agreement on road underway. 4) The Agreement Bоrоvic); transport between Serbia is being implemented, 77 Air and Bosnia-Herzegovina; although the amendments to Transport 6) Agreement on road one of its parts are expected in Department transport between Serbia 2007 8) Draft Agreement has (AM Milаn and FYR Macedonia; 7) been adopted by the Mоkоvic)]. Agreement on road Government; the Agreement transport between Serbia remains to be initialled and and Bulgaria; 8) then signed. Agreement on combined 9) Draft Agreement and transport between Serbia Platform for Negotiations with and Hungary; 9) Slovakia concerning the Agreement on combined Agreement on Combined transport between Serbia Transport between Serbia and and Slovak Republic; 10) Slovak Republic have been Agreement on combined adopted by the Government; transport between Serbia negotiations concerning and Croatia; 11) harmonisation to follow. Memorandum on 10) Agreement on Combined intermodal transport Transport between SCG and between Serbia and Croatia was ratified by SCG Austria; 12) Agreement Parliament in May 2006. 11) on rail border transport Memorandum on Intermodal between Serbia and Transport between Serbia and Croatia Austria was signed in 2006. Note: completely revise 13) Ratified. 14) Adopted by existng agreement; 13) the Government, ratification is Agreement on border underway. 15) Initiate expert procedure in rail transport negotiations in order to between Serbia and regulate mutual relations; 16) Bulgaria Integration has started. At first, Note: the agreement integration of SCG was implies joint work of supposed to finish by 1 July border authorities in both 2006, but it was postponed countries on a single due to the break-up of the location; 14) Convention state union. Integration is concerning International necessary as it will provide Carriage by Rail (COTIF) stable and permantent 15) Agreement on air sources of financing of the transport with Montenegro independent regulatory and 16) Finalise integration in supervisory body. In addition, CRCO EUROCONTROL it is necessary to pass regulations concerning other fees that the Civil Air Transport Directorate will be financed from. 4.1.8 Conclude and MMЕ In order to implement the With intensive bilateral Total amount is Permanent task. Mostly financial; implement agreements [Departmen Energy Community cooperation between MMЕ hard to for multilateral with neighbouring t of Treaty, good cooperation and, primarily, neighbouring envisage, but agreements countries, notably on European has been established countries, the Ministry is also assistance of better inter- energy. Integration between MMЕ, energy actively involved in multilateral international sectoral and enterprises and regulatory cooperation in the field of donors and cooperation is Internationa agency. However, it is energy. The most important financial needed; l necessary to establish fact is the full participation of institutions is reactivation of Cooperation better inter-sectoral Serbia in the Energy usually asked activities (Mirоslаv cooperation due to the Community process. (Energy for. As regards concerning Kukоbаt)] multisectoral nature of Community Treaty has been bilateral joining the 78 theis Agreement. Join the signed. It was ratified on cooperation, Agreement on Treaty establishing the 14.07.2006 and became financial Energy Charter Energy Community and effective in Serbia on burden falls and the relevant the relevant Protocol, it is 1.09.2006, following the upon signatory Protocol is stalled also necessary to notification on the Agreement countries. due to the establish good inter- trustee of 7.08.2006.) unresolved status sectoral cooperation. After the break-up of the state of Kosovo- Further administrative union SCG, Serbia is in the Metohija. capacity building is position to reactivate its necessary. activities concerning joining the Treaty establishing the Energy Community and the relevant Protocol on Energy Efficiency and Relevant Environmental Aspects, which will further imporve the European integration process of Serbia not only from the aspect of energy sector, but in the broadest possible context. Joining the Treaty is especially significant from the aspect of encouraging foreign investment in the energy sector.

4.1.10 Ensure the right of real SCR (а) а) Pass the law and а) The Government has sent а) EAR а) – Depending on а) Delay in the choice between Mirјаnа regulations governing the Proposal of Amendments 61,500,000.00 (2004 - the SNP sessions; b) adoption of the sustainable return and Kеcmаn, integration of refugees in to the Law on Refugees to RSD (Bill 2006) implementation of Law; b) integration. Assistant Serbia; b) Carry out SNP for adoption; b) The Amending the 23.2 Sarajevo Declaration Difficulties in the Commissio Sarajevo Declaration of “Road Map” in the framework Law on million – 2007 implementation of ner; Suzаnа Sustainable Return. of Sarajevo Declaration is in Refugees EUR; Sarajevo Misic, being drawn up. regulatied the UNHCR Declaration Assistant - procedure of (2005- (common Commissio At the Government session real estate 2006) Implementation ner; b) held on 28 September 2006, a acquisition and 7.8 Matrix has not Јаsmnikа Resolution was passed on transfer of million been adopted Оlivеric, appointing the minister for ownership USD due to Advisor) public administration and local rights to outstanding self-government, Mr Zoran refugees from issues in the Loncar, to represent Serbia former SFRY Road Map of the concerning these matters at republics under Republic of the ministerial level, which more Croatia, of which used to be the responsibility of favourable two are of key the former Ministry of Human conditions than importance: and Minority Rights. At the the market Occupancy same time, the Commissioner ones. Due to Tenancy Rights for Refugees stays in charge the delay in the (OTR) and of this process. adoption of the consequent Law and validation of inability to use pension rights the funds etc. for working allocated under years spent in 79 the 2006 Serb controlled Budget Law in areas of Croatia total, the Law during the civil Amending the war.) 2006 Budget Law determines the amount of 61,500,000 RSD.)

Mid-term priorities 4.1.11 Facilitate integration of [As in refugees who decide Priority not to return. 4.1.10 (b)] 4.1.12 Adopt legislation on [As in refugees. Priority 4.1.10 (a)] 4.1.13 Continue to implement SCR Pass relevant Underway. Insufficient funds National Strategy. supplements to the and delay in National Strategy. passing the law.

5. ECONOMIC REQUIREMENTS No. Priority Responsible Necessary activity State of implementation Financial aspect Deadline Obstacles institution / Total Republic CARDS department / Budget and other person external funds A B C D E F G H 5. 1. Economic requirements Short-term priorities 5.1.1 Sustain macroeconomic NBS MFIN – Implement MFIN – Most macroeconomic NBS – Ongoing stability. (Governor economic and fiscal and fiscal indicators are activity. Rаdоvаn policies laid down in the monitored on regular (monthly) Јеlаsic) Memorandum on Budget basis whilst macroeconomic MFIN and Economic and Fiscal and fiscal analyses are done (Departmen Policies for 2007, with periodically. Also, three-year t of projections for 2008 and memoranda on Macroecon 2009, envisaging high macroeconomic and fiscal omic and economic growth, drop in policies are prepared. Fiscal the inflation rate, drop in In accordance with the Analyses) public expenditure. aforementioned Budget NBS – At the end of every Memorandum, the year, a monetary policy Government will continue to implementation implement robust economic programme is produced, policy and reforms, which will setting the objectives of ensure macroeconomic monetary policy as well stability, safe business as the instruments and operations, consolidation of measures that NBS economic competitiveness and should take in order to sustainable economic growth. achieve objective. The This will be helped by main objective of coordinated effects of monetary policy in 2006 is monetary and fiscal policies to reduce inflation rate and wage policy, as well as and maintain stability of accelerated structural reforms financial system which is in the real, financial and public its permanent objective, sectors. according to the NBS - Law. In 2006, the tendency of increased economic activity continued. In the first eight months of 2006, total industrial production went up by 5.9% relative to the same period the year before, while the real gains in retail were higher by 9.5%. Transport, and postal and telecommunication services also recorded a growing trend, which in the first six months was 16% and 37.4%, respectively. Exports 81 continued to grow in 2006. In the first eight months total exports increased by 26.8% compared to the same period in 2005. Growth of exports was followed by the growth of imports by 26.1% and foreign trade deficit by 25.6%. In this period, exports covered 43.8% of imports. Higher growth rates of commodity imports and trade deficit in 2006 were a result of low import values in early 2005 and introduction of value added tax. The current account deficit (without official assistance) was higher than in the first eight months of 2005 by 729 million USD – it was 2.049 billion USD. Thanks to the increase in credit transactions by 3,810 million USD, the total payment balance surplus was 4.4 billion USD in comparison to 1.1 billion USD in the same period a year earlier. The net inflow of foreign direct investment was 3.253 billion USD. NBS – The NBS 2006 Monetary Policy Programme has been adopted. As from September 2006, NBS, in accordance with new monetary policy measures and principles contained in the NBS Memorandum on the New Monetary Policy Principles, maintains stability of prices within the defined inflationary corridor, using reference interest rates as a key instrument of monetary policy. Other measures of the NBS monetary policy will be used as back-up tools.

5.1.2 Continue with the MFIN Implement the Budget The laws are being necessary fiscal (Departmen Law and all implemented and envisaging adjustment and t of adopted financial plans of the reduction in the share of consolidation to help Macroecon budgetary beneficiaries; public expenditure in GDP in reduce external omic and implement cautious policy the next medium term. imbalances and contain Fiscal of prices of public utility According to the plan, the inflationary pressures. Analyses) services, in accordance consolidated surplus in 2006 with the Law on Public should be 1.3% GDP. 82 Utilities. Between 2001 and 2005, the Serbian public finances were undergoing reform. Together with the entire macroeconomic policy this reform provided stability and sustainability of this system, which eliminated the deficit and created some surplus in 2004 and 2005. The reform increased the influence of public finances on the realisation of the key objectives – macroeconomic stability and sustainable economic growth. In addition to this, it made the fiscal system transparent, simple and in conformity with international standards. It is envisaged that the inflation will drop to 7.5% in 2006, and to 4.5% by the end of 2009. The key factor in curbing the inflation will be a coordinated action of macroeconomic policies, primarily monetary and fiscal policies, and implementation of structural reforms. 5.1.3 Maintain a prudent NBS Continue developing and NBS has established two- monetary policy stance, [Monetary strengthening monetary week repo operations where backed by an System and policy instruments, the interest rate on two-week appropriate exchange Policy encouraging further repo operations has the role of rate policy. Department development of the the reference (signalling) rate (Vice- interbank market. and symmetric corridor of Governors Required reserve will also overnight permanent Diаnа be used in the next period preferential linked to the Drаgutinоvi in case indirect reference rate (plus 4 pctg c) and instruments of monetary points for overnight Lombard Department policy do not give rate and minus 4 pctg points of Foreign satisfactory results. NBS for overnight deposit rate). The Currency will sterilise any growth of aim is to align the short-term Operations primary money that is not rate on the interbank market (Аnа a result of increased with the reference interest Gligоriјеvic) demand for money, with a rate. In addition, NBS ] view to reducing inflation continues to issue and sell and strengthenig the faith savings bonds to citizens, in in Dinar. In line with the order to reduce euroisation, new monetary policy increase savings in Dinars and framework, the exchange continue the withdrawal of rate will be an indicator of money. monetary policy NBS emphasises its intention transmission. With this to liberalise foreign currency regard, NBS will gradually market further, with the aim to reduce its presence on increase the competitiveness 83 the foreign currency of this market, i.e. to direct the market with a view to money flow towards banks or increasing the between banks and in this way competitiveness of the reduce direct interventions of market, i.e. directing the the National Bank of Serbia on flow of foreign currency this market. With a view to between commercial reducing monetary creation by banks, and reducing its foreign exchange transactions, role in foreign exchange the National Bank of Serbia operations. This will be has started the process of followed by the adoption gradual withdrawal from of floating exchange rate exchange operations. By which will be influenced sterilising the increase of by basic economic trends, primary money that is not a inflation trends as well as result of increased demand for short-term tendencies in money, the National Bank of supply and demand and Serbia shall help reduce the signals on market trends. rate of inflation. NBS will support The exchange rate of Dinar commercial banks in the will be formed on the basis of development of their demand and supply on the “market maker” role so foreign exchange market, that the banks take over whilst NBS, within its so-called the NBS exchange “softly” managed „floating“, will operations. support attaining the target rate of inflation. NBS does not explicitly defend either the level or the trend of foreign exchange rate, which is formed on the base of foreign currency supply and demand on the market. In accordance with the new monetary policy framework, NBS can intervene on the foreign exchange market if the need arises to restrict excessive oscillations of the daily exchange rates, to reduce a potential threat to the financial stability and stability of prices, and to protect foreign exchange reserves. The key rule of the monetary policy based on the market principles is that the appreciation of the nominal exchange rate of Dinar, higher than the one that ensures targeted inflation, results in the reduction in the reference interest rate, just as in the opposite case, depreciation would mean the increase of the reference interest rate, and 84 NBS will act in this way in accordance with the new monetary policy regime.

5.1.4 Pursue a moderate MFIN Implement the 2006 All aforementioned regulations wage policy and avoid [Treasury Budget Law, adopted and documents are being public sector wage (Ruzicа business plans of public implemented. These increases above Stојiljkоvic, utilities and other adopted documents envisage a productivity gains. Assistant financial plans of Budget coordinated policy of Director for beneficiaries. controlled wage growth, with Budget the increase that does not preparation) excede the expected growth of ] productivity. As regards salaries of the employees of local self- government units, a restrictive salary fund policy was led in the budgetary policies of local self-government units in 2006, as well as in the execution of these expenditures. Restrictive measures are prescribed under the Law on the Budget of the Republic of Serbia for 2006 (Official Gazette of RS, No. 106/05 and 108/05 – correction). Funds for salaries that are financed from the budgets of local self- government units in 2006 cannot exceed the level of funds allocated in September 2005 increased by 9% (the expected inflation rate in 2006) and projected for 12 monthly salaries. 5.1.5 Monitor rapid credit NBS NBS monitors the credit To reduce the credit activity of Ongoing activity. expansion and adjust [Governor activity of banks, making banks, NBS has extended the prudential rules. Rаdоvаn sure through its measures base of required foreign Јеlаsic; and instruments of currency reserve by Monetary monetary policy that the introducing liabilities per System and expansion of credits foreign credits of foreign legal Policy remains at the level that persons and on several Department does not jeopardise the occasions increasing the (Vice- achievement of key goals required foreign currency Governor of monetary policy. reserve from 21% to 40%. Diаnа Later on, NBS has Drаgutinоvi differentiated the rate of c); required foreign currency Bank reserve by establishing the Supervising rate of the required foreign Department currency reserve of 60% to the (direct loans and deposits from responsibilit abroad with the maturity 85 y of period of two years. Governor Also, through repo operations, Radоvаn NBS has tried to sterilise the Јеlаsic)] banks’ excess liquidity and influence the reduction in the bank credit expansion. Amendments to the Decision on the criteria for the classification of the balance assets and off-balance items according to the degree of payability and the amount of special reserves of banks and other financial organisations (Official Gazette of RS, Nos.37/04, 86/04, 129/04, 51/05, 97/05, 16/06 and 45/06) have imposed on banks even stricter requirements for credits granted to natural persons. Due to the expansion of household lending, the Decision on the reconciliation of gross household lending and the share capital of banks was passed. According to this decision, banks will have to reconcile their gross household lending with their share capital. The measure has been in place since 20 October 2006. Also, in the attempt to control the credit expansion of commercial banks and sterilise the surplus liquidity of banks, repo operations were used. NBS monitors the credit activity of banks and with the amendments to the regulations on bank operations it takes following measures: - As from 1 July 2006, banks will have to increase their reserves for identified losses to the amount of placements given to natural persons (except housing loans) if those placements exceed 30% of regular net monthly income of that person, or if the natural person who has been granted the credit has deposited a down payment or an advance 86 payment lower than 20% of the granted credit amount, - As from 30 September 2006, when determining their risk assets, banks will apply the 125% weighting on all placements in foreign currency or in Dinars indexed under the foreign currency clause or other base of indexing, of minimum amount 10,000,000.00 Dinars, and which are not protected by the debtor against the changed exchange rate of Dinar relative to foreign currency or against the changed value of another base of indexing (by securing the receivables under the Same conditions under which the bank secured itself – the same foreign currency, or the same foreign currency clause or another base of indexing, the same due date and at least the same amount), - As from 30 September 2006, banks will reconcile their gross household lending (short-term and long-term loans, with calculated interests and fees, and without value corrections) with their share capital so that at the end of each calendar month such lending is lower than or equivalent to 200% of the value of share capital as at 30 September 2006. In June 2006, the NBS regulations concerning its control function were amended and harmonised with the new Law on Banks. They regulate the control function in the area of bank and exchange operations, prudential bank reporting, external audit, risk management, classification of assets and capital adequacy, procedures for giving approvals and work licences to banks etc. In accordance with the new Law on Banks, by September 2006 a bank was obligated to 87 obtain the consent of NBS and then pass new statute (i.e. amendments to the existing one), new founding act (i.e. amendments to the existing one), and appoint the chair and the members of management and executive boards.

5.1.6 Further develop and (MFIN and MFIN – MLESP and MFIN MFIN – The project entitled MFIN – In the MLESP - MFIN – Project MFIN – Reaching implement reform of MLESP are should produce a long- The Reform of Pension 2006 Budget 1, 2, 3) “Development of the concensus on the pension system. in charge of term development Insurance Administration has no funds were Funds Central Register of Social and implementat strategy for a sustainable started. earmarked for from the Payees“ will be Economic ion of pension system, reform of Production of feasibility study these activities. World implemented in Council. administrati pension insurance of the development of central Bank stages in the next 5 MLESP - 1) ve pension administration and for the register of payees is loan. years, i.e. until 2011. Political system development of efficient underway. MLESP - 1) and 2) obstacles; developmen supervision of voluntary The Law on Voluntary Pension January 2007; 3) 4th absence of t project) pensions funds. Funds and Pension Plans quarter of 2007; 5) 4th activity MLESP MLESP – 1) Stage 1 of came into force on 01.10.2005 quarter of 2007 coordination; [Pension consolidation of three and it has been applied since internal and pension funds – 01.04.2006. It envisages the resistance within Disability administrative establishment and functioning Funds; 2) political Insurance consolidation; 2) of voluntary pension funds and obstacles; Department Designate institution in pension plans so that Serbian coordination of (AM charge of keeping central citizens can choose whether to activities; LJiljаnа register; 3) Establish join a voluntary pension fund, conflicting Rаdifkоvic)] human and information how much to pay in the fund, interests of capacities for analyses, and decide on the mode and interested planning and projection in dynamics of investing a part of parties; 3) the pension system; 4) earned/available funds, in absence of Pass two regulations order to provide extra income activity concerning the Law on in old age. NBS has coordination; 4) /; Voluntary Pension Funds established a supervision unit. 5) absence of and Pension Plans MLESP – 1. Preparation of activity (Regulation on conditions terms of reference is coordination; and procedure for the underway; 2. Production of political organisation and feasibility study is underway; problems. functioning of pension 3. Relevant organisational unit plans and Regulation on within the Pension and further conditions for Disability Insurance earning the right of a Department of MLESP has voluntary pension funds been established; 4. to dispose of and and Regulations have been withdraw accummulated adopted (Official Gazette of funds before the age of RS, No. 30/06); 5. Analysis will 53); 5) Analyse be included in the justification of existence Development Strategy of the of compulsory insurance Pension System. for farmers and enable voluntary insurance for farmers. 5.1.7 Continue the reform of MH Pass regulations to The new Law on Health 30,394,4 2007 88 the health insurance [Health establish a system of Insurance was passed in 05.00 system. Insurance compulsory, as well as December 2005. This is a EUR. and voluntary health system-based and reform law, [1) Healthcare insurance: which is in conformity with the Serbian Financing а) Prepare regulations to standpoints and principles Healthcar Department introduce new ways of contained in the laws of EU e (AM Vаsiliје financing healthcare countries. The law limits the Develop Аntic and services by the Republic rights in the area of dental ment, Zоricа Healthcare Directorate care services and introduces World Pаvlоvic, (DRG – diagnostic-related waiting lists for some medical Bank Department groups); b) Adjust the services (cardiovascular project Head]. system of ‘participation’ surgery, orthopedics, 17,394,4 (‘participation’ = personal expensive diagnostic methods, 05.75 2) share of each insuree in ophthalmology). Restructu the costs of healthcare) to - ring of the new concept of Production of regulations is tertiary compulsory and voluntary underway. The aim is to healthcar health insurence); c) approximate this law to the EU e Precisely determine rights standards. (CARDS to medications (a list of 2004) medications prescribed at 1,500,00 the cost of compulsory 0.00 3) health insurance); d) Improve Prepare a list of medical ment of technical equipment preventiv provided at the cost of e compulsory health healthcar insurance. e services (CARDS 2004) 3,000,00 0.00 4) Support to the healthcar e system reform (CARDS 2005) 8,500,00 0.00]

5.1.8 Continue to formalise MFIN Apply consistently the On 14.06.2006, SNP adopted the [Treasury updated laws and the Law Amending the Law on black economy and (Vеsеlin regulations in the area of Personal Income Tax and the broaden the tax base DJоrdjеvic, fiscal system; implement Law Amending the Law on through implementation Assistant existing and pending Contributions to the of a Public Expenditure Director for projects of administrative Compulsory Social Insurance. Management System control)]. capacity building and The key amendments to the (treasury, public internal procedures aimed at Law on Personal Income Tax financial control) and combatting informal come down to the following: comprehensive tax economy. - the income tax rate is cut reform with fewer from 14% to 12%, with the 89 exemptions and lower introduction of the untaxable rates, especially amount of 5,000 RSD a concerning labour. month, thus reducing the fiscal burden on salaries, and simultaneously encouraging employment, i.e. helping combat illegal work, as well as increasing the revenue of compulsory social insurance agencies based on income and, therefore, causing the drop in transfers from the Budget towards these agencies; - employers are exempt from paying tax on new employees’ salaries – for trainees under 30 years of age for a 3-year period and employees under 30 years of age for a 3-year period. In this way, tax incentive is given to employing young people, which will help combat the ‘black economy’ in this area. Furthermore, there is a tax incentive for the employment of persons over 45 years of age and persons with disabilities; - farmers are exempt from paying income tax on cadastre income from farming and forestry for 2006 and 2007, which should encourage agricultural development and investment; - progressive taxation of the income subject to income tax is introduced and two rates are prescribed – 10% and 15%, making the taxation system on the basis of the tax payer’s economic strength fairer. In addition, the rate of untaxable amount is reduced. The most important changes in the Law on Contributions to the Compulsory Social Insurance are the following: - employers who employ trainees younger than 30, or employees under 30 years of age, are exempt from paying contributions to compulsory social insurance for 3 and 2 90 years, respectfully. The employers who employ persons with disabilities are also exempt from this obligation for a period of three years; - the percentage of the average monthly salary used for the calculation of the lowest monthly contribution base is reduced. - With a view to improving the public expenditure management: а) Under the amendments to the 2006 Budget Law, the funding is provided for the Republic Audit Institution (Allocation 2); b) Amdendments to the Budgetary System Law envisage the establishment of the Central Unit for Harmonisation of Budgetary Control and Audit. The following amendments to the Law on Tax Procedure and Tax Administration have been proposed: а) In accordance with the Law on the Financing of Local Self- Government, harmonisation of local and republic tax administration will be ensured; b) Strengthen the capacity of the Centre for big tax payers; c) Big tax payer should be able to file their tax returns electronically. 5.1.9 Speed up the ME (AM Pass legislation (establish The following laws have been 582 million 262 million 320 Deadline for the Lack of buyers restructuring and Slаvоmir legal framework). adopted: RSD RSD million privatisation of interested in privatisation of large Vulеtic) - Privatisation Law (Official RSD socially-owned some subjects of socially-owned Gazette of RS, No. 38/01, property is April privatisation. enterprises 18/03 and 45/05); 2007, whilst there is to strengthen financial - Law on Equity Fund (Official no deadline for the and corporate discipline. Gazette of RS, Nos. 38/01 and privatisation of state- 45/05), owned companies. - Law on Public Utilities and on Performing Activities of General Interest (Official Gazette of RS, Nos.25/00, 25/02,107/05 and 108/05), which prescribes that in public utilities and enterprises with 91 the majority state-owned capital that perform activities of general interest, the capital for acquisition of shares without compensation may be maximum 30% of the state- owned capital being privatised. - In order to speed up privatisation, restructuring of large state-owned companies is underway. The main goal of restructuring is to carry out, as quickly as possible, preparations of these companies (debt write-off, passage of other resolutions in the area of restructuring and constitution of parts of companies, preparation of privatisation documentation, e.g. privatisation programme and tender documentation, resolving the issue of surpluss employees, and other tasks), in order to launch tenders and auctions. Privatisation of state-owned companies is underway. In the first stage, privatisation of companies performing activities of public interest will take place. They are state- owned companies established by unbundling non-core activities during the restructuring of state-owned companies performing activities of public interest, which is implemented by the Government. - The dynamics of privatisation of public utility companies at the local self-government level will be determined under the Privatisation Strategy in the Public Utility Sector, which will be produced by the Institute of Economics in Belgrade and passed in the first half of 2007. Harmonisation of comments on the text of the Draft Privatisation Strategy in the Public Utility Sector and 92 potential amendments to the regulations is underway. The objective is to round off the institutional framework for their realisation. - As regards privatisation of some public utilities (NIS, EPS, ЈАT, ZTP, PTT ) the following activities have been carried out: - preparations of state-owned companies for privatisation intensified in 2004 and 2005, by their restructuring (financial consolidation, solving the problem of redundancy, etc.) and by rounding off the legal framework for privatisation of this form of ownership. The biggest progress has been made with NIS (the Government has adopted the NIS Privatisation Strategy; in accordance with the adopted strategy, the advisor is preparing tender documentation) - Regulation on the percentage of capital to be privatised in companies whose majority owner is the state and whose core activity is energy (Official Gazette of RS, No. 63/06) prescribes that the percentage of the capital of these entities to be sold cannot be higher than 70% of the company’s total capital, and that the Government shall determine this percentage of each subject of privatisation; - Privatisation strategies for other public utilities (EPS, ЈАT, ZTP, PTT, etc.) have not been passed yet. - As regards EPS, ЈАT and ZTP, the capital has been transferred to the Republic of Serbia for non-core activities that the privatisation process has been launched for (it is carried out by the Privatisation Agency. These companies are in the process of solving the 93 problem of redundancy through various social programmes, as a step towards the forthcoming privatisation). - The dynamics and the degree of privatisation of state-owned companies is not prescribed by the law. In fact, in each case, privatisation will be defined by a strategy and privatisation programme verified (adopted) by the founder, depending on specific nature of the activity performed by each company. - In accordance with the deadline for privatisation of socially-owned companies (April 2007), prescribed under the Privatisation Law, every measure is being taken in order to finalise the process of privatisation in the shortest possible time. Companies for which there are no interested buyers and which were auctioned or offered on tenders several times without success will be privatised in the bunkruptcy procedure. According to the data obtained from the Privatisation Agency covering the period 2002– 2006, ending on 6 October 2006, these are the results of privatisation: - A total of 130 companies were offered in tenders, out of which 63 were sold (success rate: 48%); in the period January–6 October 2006: 20 companies were offered, 12 sold (success rate: 60%); - A total of 1,830 companies were auctioned, 1,306 were sold (success rate: 71%); in the period January–6 October 2006: 182 companies were offered, 138 were sold (success rate: 76%); - On the capital market a total of 976 were offered, 701 94 minority blocks of shares were sold (success rate: 72%); in the period January–6 October 2006, 294 were offered, 172 blocks of shares from the portfolio of Equity Fund that were traded on the stock exchange for the first time were sold (success rate: 59%); - On the whole (T+А+CM), a total of 2,936 companies were offered and 2,070 were sold (success rate: 71%); in the period January–6 October 2006, 496 companies were offered and 322 companies were sold (success rate: 65%); 5.1.10 Continue with ME (AM Implement continuous The existing administrative Not established. Decisions of bankruptcy procedures Slаvоmir and broader education of capacity is appropriate. creditors (due to of debt-ridden, loss- Vulеtic) bankruptcy managers. - inadequately running firms in order to The Law on Bunkruptcy informed reduce quasi-fiscal Procedure (Official Gazette of creditors, there is losses. RS, No. 84/04, 85/05 ) and a lack of interest Amendments to the in participating in Privatisation Law (Official the bunkruptcy Gazette of RS, Nos. 38/01, procedure); slow 18/03 and 45/05) prescribe the handling of use of mechanism of public bankruptcy- debt write-off. The public debt related court write-off is a conditional write- cases (absence off of debt as at 31.12.2004. of unified court This option is guaranteed to all practice; a large enterprises undergoing number of cases privatisation procedure. For opened under the companies that do not find old law are now buyers even after this big handled under public debt write-off (on the new law). average, 75% of total liabilities), the write-off will be withdrawn and bunkruptcy procedure launched. - According to the data available to the Agency for Bankruptcy Manager Licensing (ABML), the data acquired from Commercial Courts and the data acquired from bankruptcy managers, 1,065 bankruptcy procedures are currently taking place in Serbia, out of which 539 procedures before the Commercial Court in Belgrade and 526 procedures before other Commercial 95 Courts in Serbia. The work of ABML will contribute to the establishment of more favourable conditions for the elimination of economic operators whose existence cannot be justified, whilst instilling confidence in creditors that their insolvent debtors will be subject to efficient, swift and legal bankruptcy procedure within one year. All this will create a better foreign investment climate in Serbia. As regards drawbacks and weaknesses of bankruptcy procedures, the following can be concluded: - all creditors who are not interested in taking part in the bankruptcy procedure should be better educated (as the new law largely enables them to lead the bankruptcy procedure); - court cases are handled slowly (the property of the bankrupt debtor is sold out but the procedure cannot be concluded because the court disputes are still in progress); - absence of unified court practice, i.e. application of the Bankruptcy Procedure Law in all courts on the territory of Serbia; - a large number of cases opened while the old law was in place are now being handled under the new law, adding to the confusion in the bankruptcy procedure; - continuous and broad education of bankruptcy managers is imperative. 5.1.11 Accelerate restructuring ME ME – Pass legislation The following laws have been 2.3 million RSD ME – Not of state-owned public (AM (build legal framework) adopted: prescribed by the utility services. Slаvоmir - Privatisation Law (Official law. The Vulеtic). Gazette of RS, Nos. 38/01, dynamics of 18/03 and 45/05); privatisation of - Law on Equipty Fund (Official public utility Gazette of RS, br.38/01 and companies at the 45/05), local self- - Law on Public Utilities and on government level 96 Performing Activities of will be General Interest (Official established by Gazette of RS, Nos.25/00, the Privatisatio 25/02,107/05 and 108/05), Strategy for the which prescribes that in public Public Utility utilities and enterprises with Sector. the majority state-owned capital that perform activities of general interest, the capital for acquisition of shares without compensation may be maximum 30% of the state- owned capital being privatised. (Please refer to Priority 5.1.9) 5.1.12 Ensure the allocation of MFIN MFIN – Implement the MFIN – At the proposal of MFIN – MLESP – MFIN and sufficient budgetary [Treasury Programme for Resolving MLESP, the Programme and According to 10 million MLESP – resources for (Misеlа the Problem of the criteria have been passed the NEA RSD Insufficient funds. redundancy and Nikоlic, Redundancy in the by the Government. financial plan, ME – Reduction restructuring costs. Assistant Process of MCI – The process is transfers from in public Director for Rationalisation, underway. In 2006, the MFIN are expenditure and public Restructuring and number of employees should 9,500.00 inter-sectoral utilities and Preparation for drop by 3000. million RSD, cooperation. state aid)]. Privatisation in MLESP – Under the transfers from MCI accordance with the Programme for Resolving the MLESP are [Departmen criteria and established Problem of Redundancy in the 1,300.00 t of Rails obligations of the National Process of Rationalisation, million RSD, and Employment Agency Restructuring and Preparation and for the Intermodal (NEA). for Privatisation, in the period period January- Transport MCI – Continue reducing 01.01-30.06.2006, the April payments (AM Dејаn the number of employees. following was done: were done Lаsicа)]. MLESP – Continue - 49 companies applied for according to MLESP application of the funding. 77 applications were plan (32.3%). [Employme Programme for Resolving approved (including those Total nt the Problem of from the previous year); necessary Department Redundancy in the - 3,244,131,688.57 RSD were funds for the (AM Process of paid out to resolve the status payment of Rаdmilа Rationalisation, of 14,452 employees; compensation Bukumiric- Restructuring and - in the course of preparations with Kаtic)]. Preparation for and processing of submitted contributions MMЕ, ME Privatisation; Directives programmes for funding prescribed for (AM Milаn on further criteria for the applications, 117 applications this type of Јоsipоvic). application of this were taken into consideration, income are programme; Programme 79 programmes were 13,135.80 establishing the approved and a total of million RSD of disbursment schedule of 3,323,287,265.33 RSD which: funds for social protection granted. 11,835.80 compensation from the MMЕ – Privatisation of energy million RSD 2006 Budget. sector is not an explicit compensations ME – Adopt and requirement of any of the EU in case of implement the project documents. It is completely left unemployment; concerning the to the Government, which can 1,300.00 disbursment schedule of privatise some parts of energy million RSD for funds for credit support to sector when it believes that proactive economy. privatisation will enhance their employment performance. measures. For 97 ME – Implementation of the the period project concerning the January-April disbursment schedule of funds 27.5% of for providing credit support to planned funds economy through the 2006 were used, i.e. Serbian Development Fund is 3,612.30 underway. Under the project, million RSD. on 30 September 2006, 3.05 Pursuant to the billion RSD (79.3%) were paid law, funds for from the Budget to compensations beneficiaries. in case of ME – Fulfilled in 2006. unemployment, planned for 2006 for average 59,000 beneficiaries per month. The number of beneficiaries was estimated on the basis of data on average monthly number of these individuals, for which, as per already passed resolutions, the payment period will last in 2006, and on the basis of expected new beneficiaries (about 40,000) who will be exercising this right in the process of restructuring and privatisation. MCI – In the budget of Transition Fund a billion Dinars (about 13,726,400.00 EUR) have been allocated for 1800 employees. ME – 3.85 billion 98 RSD. 5.1.13 Round off reform of MFIN Adopt all laws and In the previous period, laws 2008 bank sactor, especially regulations; provide and regulations used as legal privatisation of state- adequate administrative basis for the privatisation of owned banks. capacity for successful banks have been adopted, privatisation of banks. such as: 1. the law regulating relations between the Federal Republic of Yugoslavia and legal persons and banks from the territory of FYR that were the debtors or guarantors towards creditors from Paris and London Clubs; the law regulating public debt of the Federal Republic of Yugoslavia based on citizens’ foreign currency savings; regulation laying down the way and the procedure of selling shares of banks that are owned by the Republic of Serbia or by banks in the process of bankruptcy or winding up, in which the function of bunkruptcy manager is performed by the Agency for Deposit Insurance; 2. The 2006-2008 Strategy for the Sale of Shares of Banks Owned by the Republic of Serbia has been adopted by the Government, as the competent institution. - Agency for Deposit Insurance, founded under the law, organises and implements the procedure of sale of shares of the banks owned by the Republic of Serbia, in accordance with the adopted laws, regulations and The 2006-2008 Strategy for the Sale of Shares of Banks Owned by the Republic of Serbia. - Law on Banks became effective on 10.12.2005, and has been implemented since 01.10.2006, apart from the provisions in Articles 10-20 and Articles 94-101 which have been implemented since 99 01.07.2006. The aim of the law is to align national regulations in the area of banking towards EU Directives, Basel Core Principles, and modern tendencies and idiosyncrasies of the Serbian economic environment. The law allows for continued monitoring of changes in the entire banking sector, creating a base for its further development and modernisation. The greatest number of innovations that the law brings is qualitative changes concerning the establishment of banks, corporate management, risk management, consolidated base control, solvency control, legality of operation etc. - In 2005 and in the first quarter of 2006, the Republic of Serbia sold its majority shares in four banks (Jubanka, Novosadska banka, Kontinental banka and Niska banka). The sale of shares is currently underway in Vojvodjanska banka, Panonska banka and Credy banka Kragujevac. In the first quarter of 2006, recapitalisation of 25% of Komercijalna banka by EBRD was finalised. By the end of March 2006, the ratio of banks in the foreign ownership in the total balance sum of the banking system was 68.7%, while the ratio of banks with the majority ownership of the Republic of Serbia was 23.3%. 5.1.14 Continue with the NBS According to the provisions of Continuous activity. restructuring and [Insurance the Insurance Law (Official privatisation of the Surveillance Gazette of RS, Nos. 55/04, insurance sector. Department 70/04, 61/05 and 85/05) and (Mirа Еric the Law Amending the Law on Јоvic, Vice- the National Bank of Serbia of Governor)]. May 2004 (Official Gazette of RS, No. 55/04) the supervisory responsibility over the insurance sector is transferred 100 to NBS. On the other hand, privatisation of socially and state-owned capital of insurance companies is launched by MFIN. The Agency for Deposit Insurance organises and implements privatisation of capital on behalf of MFIN (Article 243 of the Insurance Law). - Privatisation process has started in one of the two largest insurance companies with majority state-owned capital, while the other one is in the process of restructuring. 5.1.15 Reform the system of MTTS The Law on Prices was regulated and [Mlаdеn adopted on 14 September administrative prices. Rаdоvic 2005 (Official Gazette of RS, Head of No. 79/05). Prices and Laws and regulations in this Consumer area reflect the Government’s Protection policy on prices, under which Unit; regulated prices are Minister’s established in a transparent Council for and objective way. There have consumer been changs in the following protection]. sectors: telecommunications, energy and postal services. 1. There were some changes in the prices of telecommunication services in the period April-June 2006. Based on the responsibility prescribed under the Telecommunications Law, the Republican Telecommunications Agency passed a Resolution on Telekom Srbija a.d. in April, which took effect in May 2006. According to the Resolution, the public utility company Telekom Srbija a.d., as the operator of fixed (landline) telecommunication services with a considerable market share, was granted the approval for the re-balancing of rates and the cancellation of 150 free impulses in the monthly subscription fees for residential users. With a view 101 to protecting the economically weakest users, the Resolution envisages that the residential users who spend up to 150 impulses should only pay the subscription fee. The new law does not regard the area of telecommunications as an activity of general interest. This means that the Law on Public Utilities and on Performing Activities of General Interest has ceased to be a legal base for the Government to authorise the prices of telecommunication services, and the establishment of special tariff rates has become the responsibility of the Agency, as an autonomous and independent organisation with public authority. Bearing in mind that regulatory bodies are independent of state bodies, public utilities, and service users, this has enabled the start of the process of market de- monopolising and price liberalisation in the area of telecommunications, in accordance with the EU recommendations. 2. Pursuant to the Energy Law (Official Gazette of RS, No. 84/2004) the Energy Agency of Serbia (EAS) was established, as an independent regulatory body tasked with creating preconditions for all regulated energy entities to work transparently in the area of price formation, taking into consideration justified costs of doing business. The objective of the Agency is to propose to the Government such tariff systems and price rates that will protect consumers of any abuses of the monopolistic position of energy companies, as well as protect energy 102 companies from economically unjustified depreciation of prices by regulating prices in the segments of the energy sector that present natural monopoly. Within reform activities in the area of prices of energy products, the Council of the Energy Agency has so far passed only individual decisions concerning the methodology of establishing tariff enelements for the calculation of the cost of access and use of the system of transmission and distribution of electricity and natural gas and calculation of prices of electricity and natural gas for tariff buyers, as well as the methodology for the establishment of tariff elements for the calculation of costs of access and use of systems for the transport of oil and oil derivatives (Official Gazette of RS, No. 68/2006). 3. There has been partial liberalisation of prices in the sector of postal services. Under the Resolution on approving the Decision amending the Decision on establishing prices of postal services in the internal postal transport, passed by the Government in late September 2006, prices of postal express services are formed freely on the market as prescribed under the Law on Postal Services (Official Gazette of RS, No. 18/05). Under this law, currier, express, swift, hybrid and similar services belong in commercial services, which have special requirements as regards quality (time and place of receipt and delivery, electronic payment of mail from receipt to delivery, etc.) and their prices are formed freely on the market, where operators 103 compete with each other both in prices and in quality.

5.1.16 In particular, further MMЕ, MMЕ – Bring prices of MMЕ – The Government gives MMЕ – MMЕ – According to MMЕ – Lack of adjust energy prices MFIN, energy, especially its approval to the request for Complex the recommendations budgetary funds. towards cost recovery MLESP electrical energy, to the the increase in energy prices, programme of the European levels gradually [Social economic level, providing except in the domain of analyses can Commission replacing all existing Protection targeted subsidies for heating, which is the only give an contained in the price subsidies for the Department socially most vulnerable responsibility of local estimate of Transition Strategy poor consumers with AM categories of citizens. government. The price of necessary for Electric Energy direct transfers. LJubоmir Finalise the study electricity has not changed funds. Sector and the article Pејаkоvic] Protection Programme for since 1 April 2006. in Options of Electric Socially Vulnerable Considerable increase of the Energy Market, which Population Affected by price of electric energy is are complementary Liberalisation of Energy necessary in order to reflect to the recently signed Sector. This is in line with the real costs and reach the Energy Community the policy of economic level necessary for Treaty, the economic encouragement of market the functioning of the national level of electric powe development while and regional electric energy should be reached by simultaneously leading markets. In accordance with 2010 the latest. the policy of solidarity with the Regulation on the price of the poorest, but outside crude oil derivatives, the business funds of energy prices of crude oil derivatives companies. are adjusted to the current price of crude oil on the world market. The price of heating produced in district heating systems has not changed since 1 April 2004. The price of natural gas used in households and district heating systems has not changed since 1 April 2006. Once in two weeks the price of natural gas for other users is harmonised with the current prices prescribed by the Agreement on the Import of Natural Gas, signed with the Russian Federation and the Agreement on the Transit of Natural Gas through Hungary, signed with MOL (Hungarian oil and gas company). - The Republic of Serbia is involved in negotiations concerning the Memorandum of Understanding on the Social Aspects of the Treaty 104 Establishing the Energy Community, which will be dealing with the issue of protection of the most vulnerable categories of population with regard to the need to bring the energy price to the economic level. MFIN – The Excise Duty Law was amended in June 2005. The law prescribes excise duties on a new group of oil derivatives, i.e. on the oil derivatives obtained from the oil fractions whose distillation range is up to 380°S. As oil price has been kept high since 2005, the change of excise duties on oil derivatives means that reduced excise duties cannot be reverted to the previous level. As a consequence, the projected revenue from excise duties for this year shall not be realised as planned. MLESP – The Ministry and EPS are currently negotiating better targetting of subisidiary beneficiaries and resturcturing of overall subisidies for electric power provided by EPS. 5.1.17 Develop a stable and MFIN MFIN – Pass the law on functioning land/real [Departmen real estate agencies. estate market. t of Legal and Property Affairs (AM Nеbојsа Skоric)] 5.1.18 Prepare cadastre RGD Draft law on land surveying 15. 01. legislation. (Ivаn R. and cadastre will be submitted 2007 Аlеksic, to the Government on Director) 15.01.2007. 5.1.19 Continue to promote MLESP а) Adopt: The 2006-2008 National 10.8 billion + Budget for CARDS – а) 1 – June 2007 employment and [Employme 1. The Law Amending the Employment Plan was 20 million other 2006: 3.7 combat nt Law on Employment and adopted in April 2006. funds 9.5 billion RSD million unemployment, in Department Insurance in Case of - to be EUR for particular through (AM Unemployment; а)1 – Work in progress. transferred to measures vocational training and Rаdmilа 2. The Law on Protection - the National of labour market reforms, Bukumiric- of Serbian Citizens The Government passed a Employment proactive involving all relevant Kаtic)] Working Abroad; Resolution on Launching a Agency; 1.3 emplyme actors. 3. The Law on Public Call for Organising billion RSD for nt policy; Emplolyment of Persons Public Works in the Interest of the programme 1 million 105 with Disabilities, with its the Republic on 24.08.2006 of proactive EUR for regulations. (05 No. – 0117969/2006). employment equipmen - - policy. t; other b) Continue the Law on Protection of Serbian funds 20 implementation of: Citizens Working Abroad is million 1. The 2005-2010 being drawn up. RSD. National Employment Strategy (adopted in April 2005); 2. The 2005-2008 Strategy for Change of National Employment Agency (adopted in September 2005); 3. Action programe for resolving the problem of redundancy in Zastava zaposljavanje I obrazovanje (Zastava Employment and Education); 4. Disbursment schedule of donations and transfers to organisations of compulsory social insurance from the Budget, pursuant to the 2006 Budget Law (adopted in January 2006); 5. The NEA Agenda for 2006 (adopted in February 2006); 5.1.20 Improve public MLESP MLESP – As in Priority MLESP – Production of Draft MLESP – As in MLESP – As in MLESP – employment agencies [Employme 5.1.19 for the following Code of Professional Conduct Priority 5.1.19 Priority 5.1.19. 1 million and assign sufficient nt activities: а) 1; b) 1; b) 2. of the NEA Staff and the EUR for human and financial Department MFIN – Pass relevant Employment Agencies’ Staff. equipmen resources for (AM action plans with a view to t; other implementation of this Rаdmilа implementing the adopted funds20 policy. Bukumiric- Employment Strategy. million Kаtic)]. RSD MFIN. 5.1.21 Continue to make the MIER Adopt laws and The following laws and 4,827,996.19 2,062,514.20 CARDS: Lack of necessary adjustments regulations. regulations have been RSD envisaged RSD granted part of administrative to the Serbian trade adopted: – asked for for for the financial funds capacity; regimes, to render it Laws: Law on Foreign Trade the budgetary year 2006 from the financing is still compatible with the (Official Gazette of RS, year 2006 (For (Please refer to Twining an outstanding autonomous trade No.101/2005). the Priority 4.1.2 Program issue. measures, the World Regulations: Regulation laying implementation for rationale) me Trade Organisation down further conditions for the of procedures envisage rules and future application of anti-dumping pursuant to d for Stabilisation and measures (Official Gazette of listed 2007 and Association Agreement. RS, No. 36/06); Regulation regulations it is 2008 in laying down further conditions necessary to the for the application of provide amount compensatory measures considerable of 1.5 106 (Official Gazette of RS, No. additional million 36/06); Regulation laying funds that will EUR down further conditions for the fall upon the application of safeguard Budget, and measures from excessive whose import (Official Gazette of RS, ammount No. 36/06); Regulation on cannot be processing and release of envisaged at customs goods and collecting this stage.) customs debts (Official Gazette of RS Nos. 127/03, 76/05); Regulation on issuing and certifying documents that accompany goods in import or export without prescribed responsibility (Official Gazette of RS, Nos. 106/05, 111/05). Resolutions: Resolution on the registration/reporting on some foreign trade activities and the content of records/reports (Official Gazette of RS, No. 106/05); Resolution on determining goods whose import, export or market placement is especially prescribed – enclosed list of goods (Official Gazette of RS, No.114/2005); Resolution on further conditions for import/export of goods/services free of charge, i.e. payment free (Official Gazette of RS, No. 109/2005); Resolution on further conditions for payment/charge in goods/services (Official Gazette of RS, No. 109/2005). The resolutions listed above will be abolished when Serbia joins WTO; Resolution on the export of sugar to the EU countries (Official Gazette of RS, No. 63/06). - Law Amending the Law on Foreign Trade in Armament, Military Equipment and Goods of Double Purposes is being drafted. - Enactments regulating the procedure for issuing import licences in line with the agreement and WTO 107 procedures for the issue of licences are underway.

Mid-term priorities 5.1.22 Continue sustainable MFIN MFIN – Implement MFIN – In accordance with the macroeconomic NBS macroeconomic and fiscal aforementioned 2007-2009 policies. (Governor framework for the period framework, the implementation Rаdоvаn 2007-2009, which of robust economic policy and Јеlаsic) establishes the average reform should continue, economic growth of 7.2% guaranteeing macroeconomic per year and inflation drop stability, safe business to 7.5% in 2007, 6.5% in operations, consolidation of 2008 and 4.5% in 2009. economic competitiveness and These objectives of sustainable economic growth. economic policy will be This will be helped by attained by robust coordinated effects of monetary and fiscal monetary and fiscal policies policies and responsible and wage policy, as well as policy of wages/salaries in accelerated structural reforms the public sector, as well in the real, financial and public as by accelerating sectors. With this aim, the structural reforms in the Government will ensure real, financial and public coordinated implementation of sectors. (Please refer to economic reforms and Priority 2.3.7) measures of economic policy NBS – In mid-term, NBS that will be motivating, will direct its activities synchronised and functionally towards achieveing its consistent. Special attention key objectives: will be paid to the coordination maintaining stability of of monetary policy, fiscal prices and financial policy and wage policy. stability. Economic policy in the period 2007-2009 will be directed towards the following: creation of a base for sustainable macroeconomic stability in the mid-term period, with stable Dinar and restricted inflation; accelerated implantation of social and economic reforms, finalising privatisation and restructuring of economy; high economic growth based on increased domestic savings and investment, foreign direct investment and exports, with the reduction in current account deficit, increased employment, reduced poverty and increased standard of living. NBS – Strategic goals and policy comply with the mid- term Government policy, i.e. 108 its policy in the area of tax and public expenditure, international economic relations, completion of privatisation process and other economic segments of policy. NBS will continue its restrictive monetary policy, reduce its involvement in the foreign exchange market and strengthen the supervision of banks, as preconditions for the role of indirect instruments of regulating monetary trends to grow. 5.1.23 Continue fiscal MFIN Implement mid-term The 2006 Budget Law and adjustment and macroeconomic and fiscal other laws and regulations consolidation to further policies in accordance envisage considerable cut in reduce external with the adopted the ratio of public spending in imbalances and contain Memorandum on the GDP in 2006 by over 1%. inflationary pressures. Budget and Economic Consolidated surplus should and Fiscal Policies in grow to 2.8% GDP in 2006. It 2006, 2007 and 2008, is estimated that the real which envisages further growth of GDP will continue in cut in the ratio of public the forthcoming midium term spending to GDP, and (by 2.5 pctg points in 2009 controlled wage policy. relative to 2006). Real growth of GDP in 2006 is estimated at 7.0%, and in the next three years it will be growing at the rate of 7.2%. The feasibility of this growth will rely on the growth of investment and exports, which implies reduction in foreign trade imbalance with a strong control of deficit in the balance of payments, and a maintained balance of the public Budget with strong control of foreign debt. The growth of domestic savings and higher inflow of foreign direct investment will play the key role. Monetary policy in the next three years will be directed towards gradual reduction in inflation and strengthening the stability of financial system. Projected inflation trends for the period 2007-2009 are based on the stability of the nominal exchange rate of Dinar relative to Euro. The projection of the inflation rate 109 in 2007 and in the next two years allows for the rise in some administratively regulated prices, which conditions the general growth of prices. In the next three years the retail price growth is expected to slow down, especially after 2006, when inflationary rates will be curbed. 5.1.24 Carefully prioritise MFIN. ME MFIN – Please refer to MFIN – From 2001 to 2005, ME – At this public spending (AM Priority 5.1.28. Serbia achieved significant moment not all in annual and medium Slаvоmir results with regard to the the elements term Vulеtic) manner and the speed of fiscal have been budgeting; in reforms. Progress was made defined that can particular reduce quasi- in the establishment of fiscal be used in fiscal institutions, control of determining the losses of the part budgetary imbalance, priorities. of state-owned or elimination of budgetary deficit socially-owned and, especially, in defining the companies. role of the state in this area. Changes in tax legislation have been moving primarily towards the modernisation of the tax system. There has been considerable relief on direct tax, such as the abolishment of tax on the “income fund”, reduction in the profit tax rate, improvement of the system of contributions. Simultaneously with the reduction in direct tax, revenue based on indirect taxation has gone up. The increase of this type of revenue is primarily the result of reduction in black economy, which started with excise products, and which became particularly significant with the introduction of value added tax. Responsible fiscal policy based on the principle of robust budgetary restriction, allowed for considerable relief on economy, reduced ratio of public expenditure in GDP and creation of surplus. The implemented fiscal reform provided the basis for permanent and sustainable macroeconomic stability and it helped improve the 110 competitiveness of Serbian economy. It also encouraged fast economic growth by creating conditions for the financing of great infrastructural projects and by correcting the imperfections of financial market that were characteristic of the first transition years. It also provided even division of the transition load over certain segments of population (taking into consideration poverty abatement), eliminated fiscal deficit, and encouraged economic transition in the field of employment, with the aim to facilitate the transfer of those who have lost their jobs due to the restructuring of socially owned enterprises to the private sector. In the forthcoming period, the policy of public debt reduction, as one of the most important indicators of the level of fiscal sustainability, will continue. The main activity in the realisation of fiscal policy in the forthcoming medium term will concentrate on public expenditure. In addition to continuing reducing public expenditure, it is also important to change the structure of spending, with the aim to increase productive expenditure – especially capital expenditure. Potential fiscal risks in Serbia will be monitored and measures will be taken in order to provide their reduction. The primary objective of public finances in 2007 and in the following two years will be to implement a solid fiscal policy, continue reforms of public expenditure, adjust tax instruments and keep the scope of public expenditure at the level that provides macroeconomic growth and stability of public finances. 111 The public expenditure policy will concentrate on full harmonisation of Serbian fiscal system with the EU regulations, and on comprehensive and even distribution of tax burden in accordance with the real economic potential. Instruments of tax policy will be adjusted in as much as to provide the realisation of projected consolidated revenue of the Republic. Tax policy in the medium term is coordinated with the strategy concerning fiscal policy and its adjustment to the basic principles of economic policy. In this respect, tax policy has a permanent task of revising, i.e. reducing tax burden by reducing appropriation from direct tax and simultaneously increasing appropriation of funds from indirect tax. All this will be done with the aim to alleviate the burden on the economy, increase its competitiveness, and increase the burden on expenditure. Reduction in tax rates, especially the proposed reduction in the income tax – tax on earnings – is one of the objectives of tax policy. Thus, in 2006, the personal income tax rate – tax on earnings – was cut from 14% to 12% and the untaxable amount of 5,000 RSD a month applying to all employed persons was introduced. The Law Amending the Law on Personal Income Tax enters force on 01.01.2007. This reduction is expected to stimulate economic performance and growth, at the same providing the necessary public revenue. 5.1.25 Continue implementing MFIN MFIN – Implement the MFIN – The existing Law on MLESP – Total MLESP – 4th quarter a moderate wage policy. [Treasury wage policy in the Budgets and Business Plans funds needed of 2007 (Ruzicа government/public sector of Public Utilities and Other for these Stојiljkоvic, in accordance with the Financial Plans of Budgetary activities 112 Assistant Memorandum on the Beneficiaries envisages cannot be Director for Budget and Economic coordinated policy of envisaged at Budget and Fiscal Policies for controlled salary growth, which this stage of preparation) 2006, 2007 and 2008. will not excede the expected law production. ] MLESP MLESP – Adopt the law productivity growth. The Financial [Labour on salaries of the Memorandum envisages aspect will be Department employees in public certain reduction in the ratio of determined in (AM services. wage mass in GDP in the the process of Vlаdimir future. adoption. Gаric)] In the forthcoming period, salaries of civil servants and employees in public services will be moving within the funds prescribed for this type of expenditure under the Serbian Budget Law for 2006. MLESP – The production of the law is underway. 5.1.26 Further pursue the MLESP 1) Consolidate three 1) Stage 1 is underway – Funds 1) - 3) – 4th quarter of 1) Political reform of the pension [Pension pension funds; 2) administrative consolidation; from the 2010 obstacless, system. and Establish central register 2) At the moment, it is being loan uncoordinated Disability of insurees and looked into which institution received activities, internal Insurance beneficiaries; 3) Develop the central register should be from the resistance within Department a system of voluntary established within; 3) The Law World funds (AM pension funds. on Voluntary Pension Funds Bank themselves; 2) LJiljаnа and Pension Plans has been under Political Rаdifkоvic]. implemented since IDA obstacles, 01.04.2006; preparations for condition uncoordinated the establishment of the s of 25 activities, system are underway. million communication USD problems between interested parties; 3) Political problems, economic problems, public interest. 5.1.27 Further pursue the MZ а) Reduce public c) 2007; d) 2011 reform of the health [Health spending and harmonise insurance system. Insurance the rights pertaining to and compulsory health Financing insurance with the Department financial capacity of the (AM Vаsiliје country; b) Introduce and Аntic i implement compulsory Zоricа health insurance; Pаvlоvic, c) Pass a regulation on Head)] voluntary health insurance; d) Produce a law on voluntary health insurance funds in the 113 next 5 years; e) Sign international agreements on social insurance. 5.1.28 Improve the process of MFIN Develop progressive Realisation of the Pilot Project CARDS – 2008 budgeting and financial [Treasury system of budget of the development of 2 million management. (Dаnicа planning through the strategic/programme budget EUR Mаgоvаc, implementation of planning started in early 2005. Assistant appropriate project. The project was considerably Director- expanded and improved in Coordinator early 2006. The improved )] process of budgeting and financial management is closely connected with the changes in budget preparation, as well as with the gradual transfer from the linear to the programmed budget. If the programmed budget is defined and presented in conformity with all definitions and production rules, it enables a better correlation between the budgetary revenue and earnings, expenditures and outlay, and the programmed activities. It also allows for better monitoring and control over the programme, i.e. over the results and the goals achieved within a given period, as well as the opportunity to analyse whether the allocated funds were justifiably spent considering the results achieved. In comparison with the existing manner of budgetary planning, which mainly relies on appropriation by economic classification, i.e. budgetary planning by the expenditure and outlay items, a programmed budget focuses on the results achieved, i.e. the goals attained through the engagement of projected (material and human) resources. With the support of the improved systems of cash management and the employees’ expenditure 114 planning, which are simultaneously developed in the Treasury, this will contribute to the timely and more analytical planning and management of public finances, as well as to the better execution of the Republic Budget. 5.1.29 Strengthen capacity MFIN Amend existing laws and The analysis of existing Donation In 2007, work on the Existing human building for budget [Treasury regulations in the area of regulations and potentials of s of the amendments to resources preparation and (Dаnicа budget system in order to human resources is underway, Norweiga existing budget- potential in MFIN execution to enable Mаgоvаc, introduce programmme with a view to offering better n related laws and and line prioritisation. Assistant budget with a view to solutions. Governm regulations will ministries. Director- establishing more In the framework of a ent and continue, with a view Coordinator efficiently the level of coordinated project financed CARDS to introducing a more )] public spending; build by the World Bank, European efficient programme administrative capacities. Agency for Reconstruction, the budget and better UK Department for establishment of International Development, thelevel of public and the Norwegian Ministry of expenditur; International Economic administrative Relations, budget preparation capacity building. is undergoing a reform, which is implemented by the Ministry of Finance. This is done through capacity building. based on the transfer of knowledge, application of best practices of other countries, and adoption of a number of reform measures and moves that largely concern the three interwoven elements: 1) Improved writing of Budget Memorandum; 2) Introduction of the programmed budget, and 3) Introduction of the Permanent Treasury System. The above processes imply a more active engagement not only on the part of the Ministry of Finance but also of other responsible ministries and institutions, the Serbian Government and their services. This will enable the better and timely formulation of mid-term policies of line ministries, and Government strategies and programmes, which, in turn, will facilitate the formulation of the Government priorities in the Budget Memorandum and which will 115 be planned, executed and monitored through the Budget of the Republic of Serbia. Amendments to the Budget System Law, adopted in September, are introducing a programme classification and envisaging the establishment of the Central Unit for Budget Control and Audit in the MFIN and a more precisely regulated work of internal control and internal audit. 5.1.30 Improve financial MFIN management at the [Treasury The Law on Local Self- central and local (Zivkо Government Financing was government levels. Nеsic, adopted in July 2006. The law Deputy was prepared in cooperation Director)] with the Permanent Conference of Cities and Municipalities, as an association of local self- government units, non- government organisations, Serbian Local Government Reform Programme, and GTZ. The World Bank and UNDP have given positive feedback on the draft law. Its solutions conform to the European Charter on Local Self- Government and best practices of other countries. The law should help achieve the following four objectives: 1) to increase transparency, stability and predictability of the system; 2) to increase the system of horizontal alignment with the redistribution of transfers for the benefit of poorest municipalities; 3) to improve the degree of decentralisation through increased ratio of the primary revenue of local self- government and through the introduction of the “local inland revenue” that should be collecting the revenue for the local self-government; 4) to institutionalise cooperation of local and central governments with a view to monitoring, analysing, and recommending 116 solutions for the financing of local self-government. This is realised through the establishment of the Commission for the Local Self- Government Financing, as a joint body of the Serbian Government and Permanent Conference of Cities and Municipalities.

5.1.31 Establish effective MFIN MIER – procedures for the [Treasury Financial detection, treatment and (Vеsеlin aspect of the follow-up of cases of DJоrdjеvic, required suspected fraud and Assistant activities is not other irregularities Director for provided affecting national and control)]. because this is international funds. MIER a mid-term priority for which there is no exact estimate of the necessary funding. These activities are only outlined under the Memorandum on the Budget and Economic and Fiscal Policies for 2007 with projections for 2008 and 2009, without reference to their financial aspect.

5.1.32 Continue privatisation of MMЕ, ME MMЕ – Privatisation of MMЕ – Non-core and ME – Lack of large socially- and state- (AM the energy companies is unbundled activities in the interested owned companies and, Slаvоmir not an explicit energy sector are being buyers; increased where necessary, public Vulеtic) requirement of any of EU seriously analysed for unemployment. utilities, to help increase documents. Privatisation privatisation. An advisor for the share of private in the energy sector is the privatisation of NIS a.d. sector in the economy. entirely left to the has been engaged and he has Government and it is only proposed to the Government a justified if its objective is privatisation strategy for this to protect broader company. The advisor will interest, i.e. when it soon complete the tender contributes to the better documentation. efficiency in the ME – In June 2006, the 117 functioning of the energy Government adopted the sector as a core Action Plan for RTB Bor, economic activity. whose application will result in ME – Pass laws the complete restructuring and (establish legal privatisation of this system. In framework). March 2006 the restructuring and privatisation strategy for RTB Bor was adopted, and on 1 September 2006 a public call for the sale of blocks of shares and transfer of relevant exploitation rights was published. The deadline for the submission of bids was 30.10.2006 (Please refer to Priority 5.1.9.) 5.1.33 Strengthen business MFIN MFIN – Strengthen the ME – 1) 55.25 ME – 1) 12.75 ME – 1) ME – 4th quarter of ME – Difficulties environment with a view [Commissio proces of economic MFIN – The Law on the million RSD; 2) million RSD; 2) 42.5 2007 in the provision of to promoting the n for policy-making. (Please Market of Securities and Other 502.504 million 232.504 million million necessary funds. development of private Securities also refer to Priority 2.3.7) Financial Instruments came RSD; 3) 59.8 RSD; 3) 59.8 RSD; sector and employment oversees ME – into force on 10 June 2006 million RSD; 4) million RSD; 4) 2) 270.00 in competitive markets, application Create conditions for and it has been applied since 170 million 140.25 million million equal opportunities for of the Law successuf business 10 December 2006. This law RSD RSD RSD; 4) market competition and on the operations, growth and provides greater security and 29.75 enabling the approach Securities development of small and protection of financial market million to financial resources and Other medium enterprises players. It also allows for RSD through the Financial (SMEs) and shops, as enhanced trade and broader development of financial Instruments well as for enabling them spectrum of financial sector. Market, Law to be competitive and instruments to be dealt in. The on adjusted to the EU and law provides maximal Takeover of global markets, by transparency and control over Joint-Stock applying the principles the issuing of and dealing in Companies contained in the securities and other financial and the Law European Charter on instruments. on Small Enterprises. The Law on the Takeover of Investment Joint-Stock Companies took Funds); effect on 10 June 2006 and it Treasury has been applied since. In line (Nаtаsа with the EU Directives, this law Sаkic, should regulate as fully as Assistant possible the procedure of Director for takeover of joint-stock public debt)] companies. The law should ME (AM ensure the transparency of the Pеtаr process through appropriate Pаvlоvic) supervision. It should also protect minority shareholders, ensure equal treatment of all shareholders in the target community and legality of work of all parties in the takeover procedure. The Law on Investment Funds took effect on 10 June 2006 and it has been applied since 118 10 December 2006. For the first time, the law regulates the area of collective investment in the Republic of Serbia. It deals with the establishment of various types of investment funds as institutions of collective investment. The aim of the law is to ensure that citizens have the opportunity to participate on the capital market and generate their income in a simple and effective way. On the other hand, the capital integrated in this way and invested in the national economy will enable further economic development. The Regulation on the sale of capital of insurance companies in public tenders came into force on 10 June 2006 and it has been applied since. With a view to enabling more stable and efficient business operation of insurance companies, strengthening their competitive capacity, and better protection of insurees and third parties, it is necessary to form a majority block of socially- and state- owned capital, which will be offered to the interested buyers. The sale of capital and aforementioned shares is organised and implemented by a single institution – the Deposit Insurance Agency. This regulation lays down the sale procedure ensuring its transparency, publicity and efficiency, establishment of the capital market price, as well as the security of the buyer in relation to the ownership of shares. The Law Amending the Law on Payment Operations was adopted in July 2006 and has been applied since. It enables branches of foreign companies doing business on the territory of Serbia to open their current 119 accounts with the banks in Serbia, through which they would perform their payment operations. The Regulation on determining the persons and property that can be insured with a foreign insurance company became effective on 10.06.2006 and has been applied since. - The Law on Compulsory Transport Insurance is being drawn up. Effects: Solutions that this law will contain have resulted from the need to raise the quality of compulsory transport insurance, with the aim to economically protect the passengers in the public transport as well as the damaged third parties. This law is being prepared in line with the standards in developed market economies and, above all, in line with the standards of the International Association of Insurance Supervisors (IAIS) and the EU Directives in the area of insurance services, due to the need to provide efficient control and supervision of insurance companies and other entities dealing with compulsory transport insurance. The law will create conditions for ensuring a higher level of stability and discipline when meeting the obligations of insurance companies that are prescribed by the law and accepted under the insurance contract. ME – The following are in the process of realisation: 1) the programme of giving incentive to the development of clusters; the 2007 Annual Operational Activity Plan (GOPA) envisages realisation of the the following programmes and projects: 2) the programme of incubator development 120 [through the ENTRANCE projects of establishment business incubators (6 new incubators) and incubators supporting entrepreneurship (NIP)]; 3) the project encouraging enterprise internationalisation; 4) the project encouraging entrepreneurs to invest into productivity and strengthening of innovation. (Please also refer to Priority 7.1.1) 5.1.34 Strengthen the MFIN functioning of land/real [Proprietary Real estate transactions estate market. Affairs usually involve great amounts Department of money, and often imply (AM great opportunities for making Nеbојsа expensive mistakes. They Skоric)]. require legal and economic expertise as well as knowledge of the market. This is why the Ministry of Finance has produced a draft law, which should be reviewed by the Serbian Chamber of Commerce and the Association of Real Estate Agencies. The law will regulate: who can be a real estate agent – licences and certificates; insurance in case of damage caused by the operations of the agency; ethical aspects, obligations towards sellers and/or buyers, preparations for sale, etc; legal form of organisation; accountancy and audit; public or other form of control; how to manage a real estate agency so that it serves its clients effectively and how to protect the clients from abuse or incompetence and guarantee to the buyer that they have paid for the service what it is really worth. - Purchase contracts are now verified in the courts of law, and signatures of contracting parties on the contracts are 121 being checked, but the content of the contract isn’t. With the adoption of the Notaries Law, legal security will considerably increase because notaries will provide expert verification of contracts, which should help reduce the number of litigations based on the annulment or termination of real estate purchase contracts. 5.1.35 Adopt and implement RGA (Ivаn (Please refer to Priority legislation on cadastre R. Аlеksic, 5.1.18.) and legislation allowing Director). private ownership of urban land. 5.1.36 Start land reform, MAFWM MAFWM – Establish an MAFWM – The Farmland Law ME – 2.3 ME – 1st half of 2007 MAFWM – Real restructuring and [Agrarian agency for protection, has been adopted. (Official million RSD estate cadastre is privatisation of large Resources planning and use of Gazette of RS, No. 62/2006). not completed; farms. Department farmland. ME – Produce a The establishment of the Land Proprietary (Zоrаn privatisation strategy for Directorate within the ministry Relations are not Knеzеvic, farmland and building is underway. ME – The solved; Department land. Strategy for Privatisation of insufficient Head)] Farmland and Building Land administrative ME (AM should be produced in the first capacity. ME – Slаvоmir half of 2007. The strategy will Inter-sectoral Vulеtic) deal with the issues of cooperation and ownership, privatisation and political stability. management of farmland and building land, concept of privatisation of state-owned land and how it will be implemented, and it should provide a conceptual solution for the new regulatory framework for land management and relevant institutions tasked with support and implementation. Harmonisation of regulations concerning the above issues is pending. Privatisation of large, socially-owned farms is taking place through the privatisation of socially-owned capital of agricultural plants in accordance with the Privatisation Law. 5.1.37 Continue the necessary MIER Coordinate work of the The third meeting of the Task 4,777,331.75 3,625,047.62 CARDS: Until Serbia becomes Insufficient funds. reforms to comply with Government Commission Force for the accession to RSD envisaged RSD granted PLAC – the WTO member It is necessary to WTO rules and for Serbia's accession to WTO was held on 6 December – asked for for for the financial 1.5 (2008 – extend technical obligations in order to WTO and preparation for 2006. Before the meeting, the the financial 2006 million approximately). support of PLAC accelerate the WTO the Task Force meetings; following documents were year 2006 (Please refer to EUR until the Twinning accession process. produce a plan of submitted: Priority 4.1.2 (part of Programme 122 legislative activities in the - Answers to the questions for further funds is starts, so that process of accession to posed by the USA, EC and explanation) used by donor help could WTO. Australia regarding the MIER last until Serbia Memorandum on Serbia’s (for its becomes a Foreign Trade Regime; activities member of WTO. - Initial offer for negotiations related to Lack of concerning liberalisation of European administrative service market integratio capacity. - Innovated АCC/9 – a n and Restricted public breakdown of regulations accessio spending and governing the area of n to employement of commercial aspects of WTO) new people. intellectual property rights; and it - ACC/8 – a detailed overview lasted of technical trade barriers and until June sanitary and phytosanitary 2006). measures; Part of - Initial offer of negotiations funds of regarding goods the - Fourth, innovated plan of planned legislative activities. Twinning Program At the meeting, the Task Force me (in members agreed to produce a total 1.5 factual report on current million issues, which would move EUR for forward the process of 2007 and accession. The report would 2008) will confirm that progress has be used been made in the reform of the for trade system, thus bringing realisatio Serbia closer to the WTO n of this membership. In addition to the priority. multilateral meeting within the Other Task Force, bilateral funds negotiations were also held from concerning liberalisation of donations markets of commodities and : services with Canada, USA, technical Switzerland, Norway and assistanc Turkey. e of USA (USAID) and technical assistanc e of the Swiss Governm ent through the agency Ideas. 5.1.38 Start designing and MSEP Pass strategy concerning In accordance with the 5 million RSD End of 2007 applying an integrated the area of scientific Scientific Research Act, which 123 research policy. research of importance to was passed in December the Republic of Serbia. 2005, the National Council for Scientific and Technological Development started to work on the Serbian Scientific and Technological Development Strategy.

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6. INTERNAL MARKET No. Priority Responsible Necessary activity State of implementation Financial aspect Deadline Obstacles institution / Total Republic CARDS department / Budget and other person external funds A B C D E F G H 6. 1. Internal market Short-term priorities 6.1.2 Ensure state-wide MLESP MLESP – Pass the law on MLESP – Draft Law on the MLESP – No market access for [Labour employment and work of Employment and Work of funding is domestic and foreign Department foreign nationals. Foreign Nationals has been necessary for operators regarding (AM adopted by the Government the goods, services, capital Vlаdimir and it is in the parliamentary implementation and persons. Gаric)]. procedure. of this law. MIER, NBS, MFIN 6. 2. Free movement of goods Short-term priorities 6.2.1 Continue the efforts to SAB SAB – (а) Continue the SAB – Under the project “SCG IMPM –129 SAB – SAB – Hands-on SAB – adjust rules and [(а) Milоs process of АTS Quality”, the Danish million RSD CARDS: training in the 1st half Insufficient funds; regulations concerning Јеlic, Acting establishment pursuant to Accreditation and Metrology 6 million of 2007 and the rest getting the EU standardisation, Director; (b) the Accreditation Law Fund (DANAK) has done a EUR in the 2nd half of 2007 candidate country certification, metrology, Rаdivоје which came into force on peer assessment of the former (from the IMPM – 1st quarter of status, i.e. accreditation and Nikоlicic, 01.01.2006 and the accreditation body ЈUАT. The “SCG 2008. signing SAA, as a determining Advisor to Resolution of Establishing established inconsistencies Quality“ condition for harmonisation with the Director on АTS (Official Gazette of were mostly caused by the old project, applying for the acquis communautaire, quality; (c) RS, No. 96/06.); (b) system environment. The which status of a full EA in order to create Vidа Harmonise rules and Government has passed a lasts until member and favourable conditions Zivkоvic, procedures of Resolution on establishing the the end signing IARC. for trade. Start adopting Advisor to accreditation with the new Serbian Accreditation Body of 2006) IMPM – European standards. Director for АTS; (c) Establish (Official Gazette of RS, IMPM – Insufficient funds. organisation process of accreditation No.96/06). The new status of 1.2 Postponed ; of calibration laboratories; SAB allows it to take million WELMEC (d) Rаdivоје (d) Define and implement corrective measures in order EUR accession Nikоlicic] cooperation between АTS to remove the inconsistencies (from the country status IMPM and responsible ministries mentioned above. According project (ME – Until the (Drаgаn in the accreditation to this resolution, the mentione Law Amending Milоsеvic, process in the regulated Government establishes SAB d above); the Law on Director). area (technical rules and as an independent, non-profit Additional Ministries is regulations for application organisation. assistanc passed no – directives of old and SAB determines the e is ministry is new approaches). competencies of organisations necessar responsible for in charge of assessing the u in the metrology which IMPM – There has been harmonisation of: testing (so form of will cause delays improvement in the area far, 169 laboratories have technical in passing of measuring standards been certified for testing) and support. regulations, and prescious metals, but calibration in accordance with accreditation of not in the area of legal the Resolution (a developed laboratories, metrology accreditation scheme and supervising 125 (capacity building of the started implementation IMPM by Legal Metrology activities); control (16 competent Directorate is of key organisations have been ministry etc.) importance for the certified); product certification preparation of new (13 organisations have been legislation which stems certified), management from the Metrology Law system certification (5 and the requirement that organisations have been the Directorate should get accredited for QMS and 3 for at least the status of EMS) and certification of associated member of personnel (accreditation WELMEC; procurement scheme is being prepared). of measuring and SAB assesses the calibration instruments for competencies of calibration the Directorate; establish orgnasiations and new metrological control harmonirsation in accordance of packaged products; with : IMPM needs to organise - the undertaken European (hands-on) training and international standards courses for their experts and directives from ISO/IEC in national metrological 17000 and EN 45000 series, institutes in EU; IMPM such as: laboratories: SCS staff training in adopting ISO/IEC 17025; operation of principles and methods of various types of bodies technical regulations and performing inspection: JUS Measuring Instruments ISO/IEC 17020; general Directive (MID). requirements for bodies operating product certification bodies systems: JUS EN 45011 and JUS ISO/IEC Directive 65; general requirements for bodies operating assessment and certification/registration of quality systems: JUS EN 45012 and JUS ISO/IEC Directive 62; certification bodies for the environment system management: JUS ISO/IEC Directive 66; requirements for bodies certifying persons: ЕN ISO/IEC 17024; - relevant ЕА guidelines of categories 2 and 3 and – accreditation rules (JUAT-11- 10-00—00). Procedures applied by SAB in the process of accreditation are prescribed for every type of accreditation under the SAB procedures. The SAB organisation, management as well as rules and procedures pertaining to accreditation to a 126 large extent comply with the standard requirements of ISO/IEC 17011, simultaneously observing the Serbian legislative system. The SAB Foundation Act allows for full harmonisation with this standard. According to the SAB Foundation Act, the bodies of SAB are: the management board, the accreditation council, director and the supervisory board. When electing members of these bodies SAB makes sure that the requirements such as competency and participation of interested parties are met (which was not the case before). SAB has 22 active lead assessors with completed certified QMS training course, out of which 9 have permanent employment with SAB, and 13 work on ad-hoc basis. In addition, SAB has 41 technical assessors on its list also working on ad-hoc basis. Since 2002 SAB/JUAT has a status of associated EA member and takes part in the work of its bodies: general assembly, MAS, committees for laboratories, control organisations and certification. IMPM – SAB became a member of EUROMET in May 2005. Thanks to the IMPM’s membership in EUROMET it can participate in the work of technical committees and in projects concerning the comparison of national measuring standards. IMPM became a member of Association of European Assay Offices (АEАO) in 2002. The membership in AEAO enables IMPM to participate in the Minesite Europe Forum for precious metals and in the inter-laboratory testing of objects made from precious metals. IMPM has sent a letter of intentions to the Chair 127 of WELMEC, expressing willingnes to start cooperation or etablish the associate member status, but the letter has not been replied to to date. Any support of the European Commission to IMPM’s efforts to gain appropriate status in WELMEC is very welcome. The new Metrology Law includes all recommendations of the International Organisation of Legal Metrology with the aim to meet the WTO requirements and comply with the EU regulations. The Regulation on legal measurment units has entered force and it is in full conformity with Council Decision 80/181/ЕЕS. The Decree on types and forms of symbols and stamps used in the certification of standards and the Regulation on ways and conditions of certification standards. Eight more regulations should be passed in coooperation with the ministry in charge of metrology. Under the project Strengthening the Quality, Capacity and Infrastructure Management in SCG, implemented by EAR, IMPM has received the equipment for calibration and measuring. The new, modern calibration and measuring equipment is necessary in order to enable IMPM to implement consistent metrological control in Serbian economy and society. The establishment of a new area of metrological control of packaged products requires the production and passage of regulations, establishment of a central laboratory within the IMPM, equipping the Measurement Control and organising supervision. Raising awareness meetings and those dedicated to the 128 transfer of knowledge are in progress under a CARDS regional project. IMPM needs hands-on training for its experts in foreign national metrological institutes in the EU, where they would be able to work with national measuring standards or study various types of standards. The harmonisation of legislation is pending. It will be realised through discussions with EU experts, workshops on harmonisation of technical regulations and the IMPM staff training in adopting the principles and ways of application of technical regulations and Measuring Instruments Directive (MID) and previously packaged products. 6.2.2 Establish a legal MTTS Pass a Decision on The founding session of the Minister’s EU is Capacity building in Consumer framework and [Prices and establishing the Minister’s Minister’s Council for Council for expected the Department in Protection Unit administrative capacity Consumer Council for Consumer Consumer Protection was held Consumer to charge of consumer within MTTS has for active consumer Protection Protection; cаpacity on 18.04.2006, when the Protection support protection within the only two protection in line with Unit building in the unit in Council Rules of Procedure (2006) implemen Ministry of Trade, members of staff EU (Mlаdеn charge of consumer were adopted. The Rules of 200,000.00 tation of Tourism and and no adequate consumer policy. Rаdоvic, protection in MTTS Procedure lay down the tasks, RSD; capacity the Law Services in 2007; office space; the Department (engage 5-10 experts in criteria for the election of building in on record keeping, existing network Head); this area and provide members, conditions and a consumers’ Consume registration and of consumers Minister’s office space, desks, method of work of the Council organisations r strengthening of the organisations is Council for computers, telephones, as a consultative body to the (2006) 2.5 Protectio consumer protection inefficient and Consumer laptops and vehicles); minister in charge of consumer million RSD. n through network in 2007. unevenly Protection] produce National Plan for protection. The Council - CARDS distributed. consumer Protection comprises 15 members, and For the year 2006, in (legal obligation pursuant its work is managed by the 2007, 20 the to Article 63 of the Minister for Trade, Tourism million RSD amount Consumer Protection and Services, Mr Bojan (250,000 EUR) of 2 Law), that the Dimitrijevic, who is also the are earmarked million Government will adopt at President of the Council. The in the Budget EUR. the proposal of MTTS, for Council members are for consumer The a five-year period (by its esteemed experts in the area protection, funds will content, the National of consumer protection, especially for also be Programme is a representatives of consumer the used for consumer protection organisations and establishment expert strategy, and it is carried representatives of the of advisor assistanc out through annual ministries of agriculture, centres and e, consumer protection health, finance and justice. capacity capacity programmes passed by Only two members of staff are building in building MTTS; as regards currently engaged to work consumers’ in MTTS, production of the concerning consumer organisations. especially programme, it is protection in the Consumer for staff 129 necessary to form a team Protection Department. training in that will do research in the - dealing area of consumer The Serbian National with protection, take study Parliament adopted the consumer trips to the EU countries Consumer Protection Law on protection in order to observe the 14 September 2005 the issues, forms, methods and (Official Gazette of RS, No. equipmen measures of consumer 79/05). The law defines the t оprеmu, protection and exchange responsibilities of MTTS in the experienc experiences in the area; field of consumer protection, e establish computer rules for the establishment of exchange network and connect the the Minister’s Council for , study Consumer Protection Unit Consumer Protection, as well trips, with consumers as conditions under which literature, organisations, their consumers can organise public associations, local self- themselves and act. awarenes governments, chambers - s of commerce and In the framework of campaign arbitration bodies, cooperation between MTTS s and ministries, field and foreign experts whose strengthe inspectorates at the local work is financed from the ning of self-government level and funds of the European Agency cooperati within ministries by for Reconstruction (PLAC on with certain areas; keep Project), in March 2006, Mr all records and registers and Jeno Czuczai, the EU expert interested strengthen the network of for consumer rights, submitted parties in consumers organisations the Final Report on the this area with a view to having a assessment of legislative (line better impact on alignment in the field of ministries consumer protection. In consumer protection. This and line with the Report will be the basis for the consumer recommendations of the improvement of regulatory organisati EU experts, criteria for framework in the field of ons). consumer organisation consumer protection, with a The will be established, which view to leading a pro-active signing of will comply to the consumer policy in Serbia in the principles of International accordance with the EU Memoran Organisation of consumer policy. Based on the dum of Consumers Unions and recommendations Understa Consumers International. incorporated in the Report, the nding With the criteria amendments to or adoption of with the established, and pursuant the new Consumer Protection European to Article 67 Paragraph 3 Law will be proposed in early Agency of the law, the Consumer 2007. Recommendations from for Protection Unit within the Final Report were used in Reconstr MTTS will keep records of the production of the Council’s uction consumers organisations. Rules of Procedure. concernin Capacity building in - g organisations in line with Furthermore, a working group realisatio international principles has been formed, tasked with n of and their alignment with defining the criteria and CARDS the Consumer Protection conditions for consumer Program Unit, inspecorates, organisation and production of me in the responsible ministries and Regulation on the Registration amount institutions would create a of Consumers Organisations, of 130 non-government sector in which will increase the 2,000,00 the area of consumer efficiency of consumers’ 0 EUR is protection that would be a organisations. This working pending. partner to all institutions in group will give proposals of the country and in how to build capacities in international consumers’ organisations. organisations of MTTS has transferred funds to consumer protection. Re- support the activities of registration of consumers consumers organisations to organisations will help the Budget of the Republic of establish their capacities Serbia (about 4 million RSD (office space, equipment) were to be paid out by the end and other conditions for of 2006), which is in their independent work on accordance with the consumer protection. recommendations of the EU and other foreign experts. MTTS has assessed the planned budgetary funds as insufficient. Financial assistance from foreign donors, especially from CARDS is necessary. - The 2007-2012 Draft National Programme for Consumer Protection has been produced and the Draft Regulation on Registration of Consumer Organisations is completed too. Mid-term priorities 6.2.3 Further develop SAB [(а) SAB – (а) Prepare ME – Harmonisation of ME – ME – ME – Deadline for all ME - Delay in standardisation, Milоs Јеlic, documentation and technical regulations with EU Considering Project directives of new the passage of especially by adopting Acting resources to apply for legislation used to be the that the Bill “Quality approach – minimum the Law European standards. Director; (b) membership in EA and responsibility of the state Amending the SCG” 5-6 years. Amending the Continue transposing Rаdivоје sign ЕА MLA after signing union (Ministry of Internal Law on was SI – Constitution of Law on the Nikоlicic, SAA (first for laboratories Economic Relations). Four Ministries is still worth 3.5 the Institute – 1st Ministries; New and Global Advisor to for calibration and then for laws were adopted at the state in million quarter of 2007; problems in the Approach and Old Director for control organisations and union level (Accreditation Law, parliamentary EUR restructuring of SI financing of SI Approach directives. quality; (c) certification bodies); (b) Standardisation Law, procedure and + 2.5 and efficiency and AB; Rаdmilа develop cooperation with Metrology Law nad Law on that its million improvement in the uncertainty Guntrum, the ministry in charge of Technical Requirements for adoption is EUR for area of regarding the Senior notification of Products and Conformity pending, it is equipmen standardisation – end provision of funds Advisor for organisations for Assessment of Products with not possible to t. (Project of 2007; adoption of for the accreditatio assessment of the Prescribed Requirements assess the was 80% European establishment of n] harmonisation; (c) – Official Gazette of RS, No. financing of SI conclude standards – 5 to 6 organisational ME (AM propose a hands-on 44/05). and АT from d years. unit for quality Mihаilо training plan for leading A package of regulations was the 2007 11.11.20 within ME, but Vеsоvic). assessors and new passed at the state union level Budget. 06) also for the SIS (I. activities in the area of (by 17.05.2006) for the However, for - financing of SI IS Krstic, accreditation. implementation of laws in the regular Under i АB; lack of Acting ME – 1. Pass regulations area of standardisation, activities of АT PLAC understanding of Director). to enable application of technical regulations and and SI in 2007, project a the complexity of former state union laws accreditation, but not which transfer work by 131 and regulations as well as metrology. contribute to of institutions those of Serbia; 2. Under the project Quality the realisation Directive authorised to Establish Institute of SCG, the transposition of of the Quality on approve human Standardisation (SI) and selected directives of the “New Improvement building resources and Accreditation Body (АB) Approach” started (Directive Programme, products financial as government on machines, Directive on low- under its (89/106 resources; institutions; 3. Establish voltage equipment, Directive projects ME EC) is insufficient responsible relationship on pressurised equipment, has earmarked being capacity in ME, between the Government Directive on electromagnetic 40 million RSD prepared. as well as in and SI with a view to compatibility and Directive on for АT and 60 - other ministries to defining annual tasks of the equipment used in million RSD for (SI perform activities SI (regarding standards) potentially explosive SI. ME has believes related to and funds to be allocated atmospheres). ME sent an earmarked that it is technical from the Budget; 4. initiative to EAR for the 207.145 million necessar regulations; Create organisational unit extension of the project RSD for the y to coordination and in charge of quality in ME Quality SCG as some project realisation of provide inter-sectoral and provide appropriate tasks were not finished at the Quality additional cooperation administrative capacity; 5. state union level. On that Improvement 600,000 concerning Take over results of the occasion ME expressed its Programme EUR for responsibilities project Quality SCG and interest in taking over the (nine projects). the for certain EU finalise transposition of results of the project although SSI – 60 million provision directives; at this selected directives of the it still (until the Law Amending RSD has been of moment it is not “new approach”; 6. the Law on Ministries is envisaged for software possible to Continue analysis of adopted) did not have formal the financing of to envisage all the needs of economy, based responsibility over this area. SI’s regular manage activities that will on that define priorities in However, the project was not activities in productio have to be transposition of directives extended and it was over on 2007 under the n of carried out during of old and new approach 11.11.2006. Standardisation Serbian the realisation of and start their On 21.07.2006, the Improvement standards this priority. Thus, transposition in Government adopted the Bill Project, which and staff it is impossible to legislation. Amending the Law on will help training in fully envisage all SSI – Develop Ministries and sent it to the realisation of their the obstacles and standardisation so that parliamentary procedure. Quality applicatio risks. Serbian system of According to the bill, ME will Improvement n. SI – Unresolved standards can take over be in charge of standardisation Programme. Additional problems of 80% European standards; and accreditation affairs and Considering funds building and continue preparations for within the Directorate for that ME at the should be equipment Institute’s full membership Measurements and Precious moment of provided maintenance; in – European Committee Metals will be formed. production of within there is no for Standardization (CEN) According to the same bill, the the Quality technical appropriate and European Committee ministry responsible for Improvement assistanc software for IT for Electrotechnical technical regulations will be Programme did e and equipment Standardization designated. not have the similar) received from the (CENELEC ), as Accordingly, ME has prepared information project “Quality preconditions for joining for GOPA a quality about the SCG“, which ЕUM; constitute bodies improvement programme for needs of SAB should enable and entering SI in court eight projects in this area, and SSI in realisation of all register, as an which, among other things, 2007, while the activities independent organisation envisage the production of 30 Quality pertaining to the with the assembly of technical regulations for Improvement standard members, management industrial products and Programme is production board, supervisory board, transposition of the taking place, technology and councils of experts and aforementioned five directives ME will redirect following the director; procure software of the new approach in 2007. the funds work of technical to keep abreast with the Under GOPA 2007, the earmarked for committees (ISO, 132 work of CEN and ministry plans to establish a accreditation/st IEC, CEN and CENELEC and produce, quality unit with 20 new andardisation CENELEC); pass and apply Serbian employees as a precondition improvement unpaid 2006 standards harmonised for the finalisation of tasks programmes membership fees with international envisaged under those nine (from an SAB (IEC and standards in accordance projects. project to an CENELEC), with EU Directives 34/98 On 1 February 2007, the SSI project in which can lead to and 48/98 and WTO/TBT Government established the the amount of the suspension of Standards Code Serbian Standardisation 20 million membership at Directory; equip the Institute. The Acting Director RSD). the end of the Institute Information has been appointed to SAB – 40 year. Centre to perform establish the Institute. million RSD activities of the In accordance with the (rationale is the Information Centre for decision of the Committee for same as standards (in accordance Economy and Finance, it was above, for SSI). with EU and WTO/TBT, agreed that the financing of SI in accordance with in 2006 should continue from ISO/IEC Information the budgetary reserve. Centre in Geneva, and In the European and world provide necessary organisations of which the databases, build a Institute is a member, website) etc; establish membership has been programme of adopting transferred from the European standards in Standardisation Bureau to the accordance with national Serbian Standardisation priorities concerning Institute. (IEC and CENELEC adopting technical EU membership fees have not standards; provide stable bee paid for 2006.) As regards sources of financing; obligation to transfer 80% determine precise European standards to the responsibilities of the Serbian standardisation Institute prescribed under system (there are now 15,955 the Standardisation Law European standards and and other government 3,460 draft European laws and regulations; standards, which makes a pass internal regulations total of 19,415 documents – in accordance with CEN the information from October and CENELEC and 2006). So far, 348 European WTO/TBT Standards standards have been taken Code Directory. over, and 400 Serbian standards, which have been harmonised with the European ones, have passed public discussion and are waiting to be published; The project Quality SCG has financed the transposition of 800 European standards. The transposition should end by late October 2006. These standards are linked to nine directives from the New Approach and one directive from the sectoral approach, which regulates microbiology 133 in food. Most of these 800 standards are in the procedure to be passed as Serbian standards, which will be completed in 2007 and 2008. 6.2.4 Establish a market ME (AM With a view to providing (Currently, the The fact that surveillance structure Mihаilо surveillance of market as supervision/inspection of the existing solutions required by the acquis. Vеsоvic). required by EU directives market, with regard to the separate the (with regard to the safety quality of industrial non-food responsibility of of products on the products, is the responsibility prescribing market) it is necessary to of MTTS. (Article 38 Z of the technical build or strengthen market Law on Conditions for requirements monitoring capacities. Performing Sales of Goods, from Rendering Services in Sales of supervision/inspe Goods and Inspection/ ction, does not Supervision, Official Gazette provide a legal of RS, No. 101/05), and framework for ME supervision of farm produce is to plan the done by MAFWM. improvement in Supervision/inspection of the area of pressurised equipment is the market resposibility of MME.) surveillance. - Draft Law The project Quality SCG gave, Amending the even while SCG still existed, a Law on Ministries general proposal of Serbia’s envisages new needs and capacities responsibilities concerning human resources for the in the area of supervision of inspectorates in goods on the market. It was some ministries, proposed to employ more than but not for ME. 10 lawyers and engineers to supervise the quality of products on the market. Accreditation of bodies for conformity assessment was regulated by the Law on Technical Requirements for Products and Conformity Assessment and its regulations, but the system never took off at the state union level. According to the Draft Law Amending the Law on Ministries, ME will be accrediting bodies for conformity assessment. 6. 3. Free movement of capital Short-term priorities Mid-term priorities 6.3.2 Further liberalise shor- NBS The new Law on Foreign Liberalisation of 134 term and mid-term [Аnа Exchange Operations (Official short-term capital capital movements. Gligоriјеvic, Gazette of RS, No. 62/06), movement will be Vice- which came into force on done within a four- Governor 27.07.2006 has kept year period from the (Foreign restrictions on residents moment the SAA Exchange (except banks) investing in takes effect. Department foreign short-term securities )] and non-residents investing in domestic short-term securities. Residents may perform payments in order to invest in foreign short-term securities and non-resident individuals may perform payments in order to invest in domestic short-term securities if it is so prescribed under the safeguard measures passed by the Government at the proposal of NBS, in the event of more serious disturbances in the balance of payments when capital movements cause or threaten to cause serious difficulties in the implementation of the monetary policy or the foreign exchange rate policy. The new law has removed the restrictions concerning the indebtedness for the sole purpose of performing a registered business operation and the scope as a precondition for using financial credits for conversion in Dinars and other purposes. However, since preconditions for the neutralisation of potential negative effects of full liberalisation of the flow of short-term capital have not been met yet, the restriction on the time limits of financial credits for the said purposes remains. Liberalisation of short-term capital movement will be done within a four-year period from the moment the SAA takes effect. There are no provisions regulating mid-term movement of capital, just the differentiation between the long-term and short-term capital operations. 135 - Under the law, residents can perform payments in order to buy ownership securities abroad (which are not direct investment), long-term debt securities (issued by OECD Member States and international financial organisations) as well as other long-term debt securities abroad, whose risk level and the country of issue can be prescribed by NBS. - Non-residents may perform payments in order to buy in Serbia long-term debt and equities in accordance with the law regulating the securities market. 6. 4. Customs and taxation Short-term priorities 6.4.1 Further align customs MFIN Pass customs law and The Customs Law is being b) 2007 legislation and [Customs customs tariff law and applied (Official Gazette of procedures with the EU System and produce accompanying RS, Nos. 73/03, 61/05 and acquis. Policy regulations. 85/05). Department а) In 2006, the following laws AM Vеsnа and regulations were passed: Hrеljаc- 1) Law on Free Zones (Official Ivаnоvic)] Gazette of RS, No. 62/06 of 19.06.2006); 2) Regulation amending the Regulation on handling customs goods, release of customs goods and collecting customs debts (Official Gazette of RS, No. 05/06 of 20.01.2006); 3) Regulation amending the Regulation on handling customs goods, release of customs goods and collecting customs debts (Official Gazette of RS, No. 47/06 of 2.06.2006.); 4) Regulation amending the Regulation on handling customs goods, release of customs goods and collecting customs debts (Official Gazette of RS, No. 86/06 of 6.10.2006); 5) Regulation on further criteria for the assessment of 136 economic justification of designating free trade zones (Official Gazette of RS, No. 69/06 of 18.08.2006); 6) Resolution on the criteria for determining customs quotas for the export of certain goods (Official Gazette of RS, No. 117/05 of 30.12.2005), which has been applied since 1.01.2006; 7) Resolution amending the Resolution on the criteria for determining customs quotas for the import of certain goods (Official Gazette of RS, No. 51/06 of 16.06.2006); 8) Resolution amending the Resolution on the criteria for determining customs quotas for the import of certain goods (Official Gazette of RS, No. 56/06 of 30.06.2006); 9) Resolution amending the Resolution on the criteria for determining customs quotas for the import of certain goods (Official Gazette of RS, No. 63/06 of 21.07.2006); 10) Regulation on the import of goods based on customs quotas (Official Gazette of RS, No. 3/06 of 21.01.2006); 11) Regulation amending the Regulation on the import of goods based on customs quotas (Official Gazette of RS, No. 53/06 of 23.06.2006); 12) Regulation amending the Regulation on the import of goods based on customs quotas (Official Gazette of RS, No. 58/06 of 7.07.2006); 13) Regulation amending the Regulation on the import of goods based on customs quotas (Official Gazette of RS, No. 67/06 of 04.08.2006); 14) Regulation laying down the form and the content of reports on free zone operation (Official Gazette of RS, No. 70/06 of 22.08.2006). b) Laws and regulations that are being drafted: 1) Draft Law Amending the Customs Tariff 137 Law has been adopted by the Government and it has been sent to the Parliament for discussion and adoption. The Customs Tariff Law simultaneously conforms to the International Convention on the Harmonised Commodity Description and Coding System HS2007 and the Combined Tariff of the EU for 2006 and 2007; 2) Draft Law Amending the Customs Law. Production of amendments to the Customs Law is envisaged in order to harmonise it further with the EU Customs Law and approximate it with the new Free Zones Law, Foreign Trade Law and Law on Infringements; 3) Draft regulation on harmonisation of customs tariff is ready and waiting for the adoption of the Law Amending the Customs Tariff Law so that it can be sent to the responsible bodies for opinion. - Comment of European Commission of July 2006: “As regards harmonisation of tax legislation with directives, action should be taken in order to ensure [the introduction of a formal mechanism of] consultations about new customs and tax laws“. Reply of MFIN: Opinions of SCC, ME and MAFWM have been obtained for all normative acts. 6.4.2 Continue to modernise MFIN Permanet improvement National and sector strategies 2007 Lack of financial the customs [Customs and specialisation of staff; for fighting corruption adopted; resources and administrations in order Administrati organise study trips and Directions for the work of inadequate to ensure a high level of on – learning about positive Internal Control adopted; awareness about administrative capacity Internal practices of EU countries; Internal Control Unit the problems in and to fight against Control Unit procure equipment of the established and stabilised; in this area. corruption, cross-border (Dејаn Internal Control Unit; cooperation with Inland crime and fiscal Cаrеvic, ensure electronic Revenue on discovering evasion. Head)] exchange of data with “phantom firms” the project neighbouring countries Border Control of Exports and EU countries through started; international agreements on customs cooperation in place; the 138 cooperation and define institution of risk analysis more the content of the data. thoroughly applied; Code of Conduct of Customs Officers produced; Project The Customs Open Line started. 6.4.3 Strengthen MFIN Permanent advanced Eight bilateral free trade administrative [Customs education; exchange agreements have been cooperation and ensure Administrati experiences with similar signed; an agreement on free continuous observance on – Origin services in the region and trade in textile and textile of obligations related to of Goods EU; further education of products has been signed with the implementation of Unit customs officers and EU; Customs Tariff and Origin preferencial trade (Tihоmir especially business of Goods Department has measures (origin). Bоgicеvic)] community in this area; adopted internal proceures for finalisation of negotiations the subsequent control and concerning CEFTA and work methods of the SAA and preparations for Department; internal database their implementation. has been established. A system for verification of origin of goods has been established. It was confirmed by the European Commission after the control performed on the spot. Seventeen bilateral agreements on customs cooperation have been signed. They are a legal base for the exchange of information with other customs administrations. Bilateral Free Trade Agreements are functioning without obstacles. The exceptions are Bosnia- Herzegovina, which has been violating the provisions of the Agreement for a long time now by introducing unilateral customs tariffs on certain products, and partly Romania, which reacts very slowly to the reports regarding the origin of cars (DACIA). Since 30 September 2005, no FTAs have been signed with “third countries” 6.4.4 Further approximate tax MFIN Adopt the following 1) The Bill Amending the 1-9) No funding legislation with the EU [Fiscal legislation: 1) Law Excise Law has been sent to will be acquis. System Amending the Excise Law the parliamentary procedure; necessary for Department and relevant regulations; 2) The law is being drawn up; the passage of (AM 2) Law Amending the 3) The Bill Amending the Law these laws. Nаtаsа VAT Law and relevant on Property Tax has been sent Kоvаcеvic)] regulations; to the parliamentary 3) Law Amending the Law procedure; 4) The Bill on Property Tax; Amending the Law on 4) Law Amending the Law Corporate Income Tax has 139 on Corporate Income Tax been sent to the parliamentary and relevant regulations; procedure; 5) Law Amending the Law 5) The Law Amending the Law on Personal Income Tax on Personal Income Tax has and relevant regulations been passed (Official Gazette or, alternatively; 6) Law of RS, No. 62/06); 6) There is on the Farming no law or regulations; 7) The Generated Income and Law Amending the Law on relevant regulations; Compulsory Contributions to 7) Law Amending the Law Social Insurance has been on Compulsory passed (Official Gazette of Contributions to Social RS, No. 62/06); Insurance and relevant 8) The law is being drawn up; regulations; 9) The Bill Amending the Law 8) Law on Tax Advisor; 9) on Tax Procedure and Tax Law Amending the Law Administration has been sent on Tax Procedure and to the parliamentary Tax Administration and procedure. relevant regulations.

6.4.5 Improve implementation MFIN The Rules on the Manner and Lack of of tax laws, focusing on [Inland Procedure of Cross experience in the revenue collection and Revenue, Assessment Determination of implementaion of control in order to Control Individual Income Tax Base on cross tax base. reduce Department Unreported Incomes entered tax fraud. (Vеsnа force on 26.07.2006 and it was Pоpоvic)] published in the Official Gazette of RS, No. 61/06. In the Ministry of Finance – Inland Revenue, in accordance with the Law on Tax Procedure and Tax Administration (LTPTA), a special unit, Tax Police Department, was established, tasked with preventing and uncovering tax-related crimes. The Inland Revenue estimates that capacity building in the area of office control and collection is necessary.

6.4.6 Commit to the principles MFIN of the Code of Conduct for Business Taxation and ensure that new tax measures are in conformity with these principles. 140 Mid-term priorities 6.4.7 Ensure continued MFIN Continuous harmonisation Underway – continuous approximation of [Tax with the EU Tax Law; activity. Serbian System and harmonisation of tariffs. Draft Law Amending the and Montenegrin Policy Customs Tariff Law has been customs and taxation Department adopted by the Government legislation to the acquis. (AM Vеsnа and the law proposal has been Hrеljаc sent to the Parliament for Ivаnоvic)] discussion and adoption. The Customs Tariff Law simultaneously conforms to the International Convention on the Harmonised Commodity Description and Coding System HS2007 and the Combined Tariff of the EU for 2006 and 2007. Drawing up the Draft Law Amending the Customs Law is envisaged in order to further harmonise it with the EU Customs Law. Amendments to the Corporate Income Tax Law are also underway. The existing situation in the area of corporate taxation will also be viewed from the aspect of the Code of Conduct in Taxation and compliance with the EU legislation. 6.4.8 Further increase the MFIN а) 1. Permanent specialist а) As in Priority 6.4.2. b) b) 616 million b) 120 million b) 496 b) September 2007 Lack of highly administrative capacity [b) Inland training and education of Capacity building is underway. RSD RSD million educated staff to implement customs Revenue, staff; 2. Study trips and Reorganisation of Customs RSD and funds. legislation, and to fight Tax Police getting familiar with Administration was done in against corruption, Department positive practices in the 2003 and 2004. New cross-border crime and (Bоris EU countries; 3. organisational units dealing fiscal evasion. Bаtаrilо), Cooperation with other with the origin of goods, Control government bodies; 4. intelligence, protection of Department Implement Arusa intellectual property, customs (Vеsnа Declaration; 5. Establish issues in transport and border Pоpоvic)]. and strengthen the formalities, risk analysis and institution of subsequent public relations were formed. control. b) Administrative Since September 2005, the capacity building. only change in the organisation of Customs Administration has been the opening of the new customs department for metal industry – Zelezara, within the Customs Branch Smederevo, in Carinarnica Beograd (amendments to the Internal Job Organisation in the Ministry of Finance – Customs 141 Administration – of December 2005). The Internal Control Department was established in the Customs Administration in 2004. With a view to capacity building in the Tax Police Department, the Inland Revenue and USAID – Bearing Point, have organised a number of courses since October 2005. The courses were organised on the following subjects: discovering crime and crime investigation, special investigation measures, money laundry and international banking, and use of computers in financial crime. - Procedures for the prosecution of tax frauds in the Serbian legal system are identical with the procedures for combating other crimes. In view of this, what counts for the efficiency and promptness of Serbian courts in general, may be applied to the prosecution of tax fraud. 6.4.9 Improve transparency MFIN 1) Enter into remaining 1) The Government expressed 3) 5 million 3) 5 3) May 2007 1 and 2) It has and the exchange of [3) Inland bilateral agreements on willingness to sign a revised RSD million been noticed that information with EU Revenue, customs cooperation with Kyoto Convention; 2) Bilateral RSD there is no Member States in order Tax and the EU countries; 2) agreements on customs genuine to facilitate the Legal Introduce the obligation of cooperation have been signed willingness to enforcement of Operations electronic data exchange with nine countries; 3) cooperate; 3) measures preventing and in the agreements; 3) Capacity building is in Lack of highly the Coordinatio Administrative capacity progress. Within the Inland eduated staff. avoidance or evasion of n (LJiljаnа building. Revenue Head Office, i.e. the taxes. Cvеtic)] Department of Tax and Legal Operations and Coordination, there is a separate unit, the Tax and Legal Operations and Coordination Unit. This Unit coordinates the Serbian Inland Revenue with Inland Revenues of other countries in the application of international agreements on avoidance of double taxation, prepares instructions for the application of ratified international agreements on avoiding double taxation, and produces instructions on international 142 public assistance in tax procedures. The Unit is also in charge of international legal assistance.

6. 5. Competition Short-term priorities 6.5.1 Establish anti-trust Commissio 1. Adopt the Bill 1. Draft Law Amending the The 2007 The 2006 2nd quarter of 2007 regimes against n for Amending the Law on Law on Protection of Budget Law CARDS agreements that limit Protection Protection of Competition; Competition is being drawn does not Program competition and that of adopt regulations on the up. Draft regulations have envisage me prevent the abuse of Competition exemption of agreements been produced, such as: funding for the envisage dominant position, (Council by type and the content of Regulation laying down Commission for s EU applicable to all cases Chair, applications for potential conditions for the exemption of Protection of support of threatening Rаdоvаn exemption; 2. horizontal agreements by type Competition. to the competition. Vukаdinоv- Administrative capacity and Regulation on the The implemen ic). building. exemption of vertical Commission tation of agreements by type. 2. After will be self- the Law the constitution of the financed, from on Commission for Protection of the revenue Protectio Competition on 12 April 2006 obtained from n of and its takeover of employees charging its Competiti from the MTTS Anti-Monopoly services. on. Affairs Department on 15 May Funds 2006, 6 more persons have will be been taken on. used for - expert assistanc The Law on Protection of e with a Competition regulates the view to agreements that restrict capacity competition, provides a list of building such agreements, and in the establishes their prohibition Specialist and annulment, as well as Service measures that the and the Commission for Protection of Commissi Competition should take in on. case such agreements exist. The law also deals with the abuse of the dominant position and control of mergers (concentration). The regime that still applies to restrictive agreements is prescribed under Article 7 of the Law on Protection of Competition. As regards taking advantage the dominant position, the law prohibits it, defines activities that will be considered abuse of dominant position and prescribes measures to be taken by the Commission for 143 Protection of Competition in case of taking advantage of dominant position exists. Provisions concerning taking advantage of the dominant position are contained in Article 18 of the law. For the first time, Articles 21-30 of the law regulate the control over mergers and they define a merger, i.e. the criteria for applying to obtain the authorisation for merger, as well as the elements taken into consideration when making a decision regarding the application for the authorisation to merge, i.e. the impact assessment of the envisaged merger. -

SNP elected members of the Council of the Commission for Protection of Competition on 3.04.2006. 6.5.2 Provide administrative MTTS The Commission for Insufficient capacity for efficient and [Specialist Protection of Competition was administrative independet Service for constituted on 12.04.2006. and expert implementation of these Protection The Commission has its capacity and rules. of Specialist Service, which insufficient Competition operates in accordance with funding for the (Mirјаnа the Law, Statute and other procurement of Miskоvic- bylaws of the Commission. equipment and Vukаsinоvic (On 15 May 2006 staff of the compensation for , Director)] MTTS Anti-Monopoly Affairs employees and Department were taken over other hired by the Specialist Service of the personnel, which Commission. This was done requires urgent under the Agreement on Staff resolution. Undertaking). Although the At the session of the number of Commission Council held on employees in the 23 May 2006, Ms Mirjana Specialist Service Miskovic Vukasinovic was has increased, appointed Head of Specialist more members of Service. Ms Vukasinovic used staff are still to be the Head of the Anti- need. Monopoly Department of the There is also a Ministry of Trade, Tourism and lack of office Services. space, both for Current activities of the the employees in Commission include the Specialist processing, collection of Service and for 144 evidence and resolving a the members of number of reports on the the Council. alleged misuse of dominant position on the market, as well as processing of applications for the authorisation of mergers (Information of the Specialist Service of the Commission for Protection of Competition). As from 01.01.2007, the Commission will be self- financed. 6.5.3 Reinforce the units in MFIN Accelerate the procedure For the time being, there is no Insufficient staff. charge of state aid [Treasury of obtaining opinions of legal framework for control of coordination and ensure (Misеlа the Report on State Aid state aid. The material for the complete transparency Nikоlic, for 2003 and 2004 from Draft Law on State Aid has of state aid, as a first Assistant organisational units of been prepared and the law step towards control of Director for MFIN and other should be submitted to the state aid. public government bodies and Government for adoption in utilities and their submission to the the first half of 2007. state aid)] Government for adoption; The Draft Law on the Control produce Report on State of State Aid envisages the Aid for 2005 (data establishment of the gathering is underway). Commission for Control of State Aid. The Commission will be constituted by the Government and it will be independent in its work. Expert, technical and administrative work for the Commission will be done by the Treasury of the Ministry of Finance. It is necessary to reinforce the Department of State Aid Registration and Monitoring by recruiting new executives, bearing in mind the scope of work of the Department until the end of 2007 (production of regulations), and especially after the laws have been adopted. It is necessary to create a state aid inventory programme. The 2003-2004 Report on the Forms and Scope of State Aid in Serbia has been adopted by the Government on 4 May 2006. - The 2005 Report on Allocated State Aid in the Republic of Serbia is finished and it is in the procedure of getting 145 opinions before it is sent to the Government for adoption.

6. 6. Public procurement Short-term priorities 6.6.1 Implement a consistent MFIN As regards public and efficient public [Group for procurement, the new Public procurement regime. the Public Procurement Law is being Procuremen drafted. The aim is to remove t System the weaknesses observed in (Zivаnа the application of the current Bоgаtincеvi law, find new solutions in order c, Group to accelerate the public Leader)]. procurement procedure, and incorporate European regulations so that the law is implemented more efficiently. In view of this, the terminology used in this law has been defined more precisely, especially the term ‘client’ in public procurement, by clearly defining the entities that are obligated to apply public procurement in accordance with the prescribed procedures. 6.6.2 Ensure transparent MFIN Amend the Public The Public Procurement Law procedures, regardless [Group for Procurement Law and is being applied (Official of the value of the Public pass relevant regulations. Gazette of RS, Nos. 39/02, contract concerned, and Procuremen 43/03, 55/04, 101/05). All avoid discrimination of t System bidders have equal treatment suppliers from the EU. (Zivаnа in the public procurement Bоgаtincеvi procedure. Factual reciprocity c, Group will be sufficient if foreign Leader)] bidders want to submit their offers in the public procurement procedure. The main public procurement procedure is the open procedure, which allows all interested parties to submit their offers without prior selection. As for the restricted and negotiated procedures, the client may use them only under the conditions prescribed by the Law. The criteria, the weighting, and the method of selection of the best offer must be determined in advance in the competition documentation and advertised 146 in the public call, so that the bidders are familiar with them before they submit their offers. A public procurement procedure of small value will be prescribed by a regulation signed by the Minister of Finance. The regulation will apply to all clients. 6. 7. Intelectual property right Short-term priorities 6.7.1 Ensure penal provisions MFIN, IPI - а) Adopt the law on MFIN – With the adoption of IPI - а) IPI - а) and b) IPI – а) Lack of and strengthen IPI the Agency of Intellectual the new Customs Law (2004) USTDA December 2007; (c) political support; implementation and [а) Brаnkа Property; b) Amend and the Regulation on granted September 2007 b) Insufficient of enforcement capacity in Tоtic, existing regulations in the handling of goods, the the administrative this field, notably in Acting area of industrial property Customs Administration took amount capacity; c) border services. Director; and copyright in an active part in the field of of Insufficient Miоdrаg accordance with the latest protection of intellectual 465,857. administrative Mаrkоvic, situation and future property rights. The following 00 USD; capacity. Assistant statute of the Institute. was done in the first five (c) Director; Confirm the Patent Rights months of 2006 (from 01.01.06 the value b) Brаnkа Agreement, the Vienna to 31.05.06): 286 terminations of the Tоtic, Agreement Establishing of customs procedures and project: Acting an International retention of goods that might 1.028 Director; Classification of the be violating intellectual million Vlаdimir Figurative Elements of property rights; 170 EUR Mаric, Head Marks, Strasbourg terminations based on of Hallmark Agreement Concerning requests of rightful claimants Department the International Patent of intellectual property rights; ; Classification, Geneva 116 terminations – ex officio. Miоdrаg Act, the Hague System of Twelve court decisions were Mаrkоvic, the International passed (temporary measures Assistant Registration of Industrial and legally binding decisions), Director; Designs. c) Strengthen pursuant to which the Gоrdаnа the Institute through temporarily retained goods Kоviјаnic, digitalisation of all have been confiscated. Head of procedures, There has been constant and Legal documentation and good cooperation and contacts Issues databases, which is the with the business sector – Department key objective of the rightful claimants of intellectual ; LJiljаnа National CARDS project. property rights. In the Rudic, Department of Protection of Head of Intellectual Property Rights, Copyright five customs officers have and Related undergone various training Rights courses in this area. Education Division; c) and training of customs Brаnkа officers is done every day on Tоtic, the field. Acting Director; IPI - а) A new Draft Law on the Miоdrаg Intellectual Property Agency Mаrkоvic, should be drawn up and 147 Assistant adopted. The main objective is Director]. the change by mans of which the Institute would become a self-financing agency with extended public authorisations, answerable directly to the Serbian Government. American consultants are expected to assist in the production of the law; b) The Law on Geographic Symbols of Origin was adopted in May 2006. With the adoption of this law, complete legislation which is the direct responsibility of the Institute has been harmonised with the EU legislation. Entering into international agreements does not essentially impact the work of the institute or compliance of regulations in the area of intellectual property with the EU regulations; c) In November 2006, the euquipment (two scanners and some computers) was procured from the firm which was selected by the European Patent Office (the executive agency of the project) as a firm that will render necessary services. The project is mostly financed from the National CARDS Programme for 2004, and partially from the billateral budget of the European Patent Office.

6. 8. Statistics Short-term priorities 6.8.1 Develop reliable RBS RBS – Develop economic RBS – Activities continue in MLESP – Total RBS – About RBS – RBS – 4th quarter of RBS – financial economic statistics. [Economic statistics in compliance the framework of SIDA and funds 17.6 million 300,000 2007 aspect, Statistics with the EU standards. CARDS projects concerning necessary to RSD for two EUR for MLESP – 4th quarter capacities Department MLESP – The Law on production of statistical carry out the years staff of 2007 (Еmа Records, which will indicators harmonised with the activities training. Јоvаnоvic, regulate record keeping in EU standards. The Republic cannot be Assistant the areas of labour, social Bureau of Statistics has estimated at Director)]. protection, child improved considerably its this stage of MLESP protection, disability etc. cooperation with EUROSTAT, law production. [Labour and started to regularly submit Financial 148 Department the data for the SMIS aspect will be (AM (Statistical Management determined in Vlаdimir Information System) database, the process of Gаric)]. concerning the harmonisation law asoption. of the existing statistics system with the European one. The Bureau also regularly updates EUROSTAT’s database with the relevant indicators of official statistics in the framework of the EU cooperation with the transition countries. MLESP – Tha law is being drawn up.

6.8.2 Revise and adopt the RBS Revise and adopt Master Prepared and adopted by the 1st quarter of 2007 master plan on statistics (Milаdin Plan. Institute, to be sent to the with a view to Kоvаcеvic, Government for adoption. The enhancing Deputy Master Plan has been the quality and Director). supplemented with the broadening the scope of Institute’s development statistics. strategy – adoption by the Government is expected. - In December 2006, the Government adopted the Official Statistics Development Strategy. 6.8.3 Reinforce the collection RBS RBS – а) Harmonise RBS – 6 to 8 RBS – About RBS – RBS – а) Mid-2008; RBS – financial and processing of [Agricultural development of statistics RBS – Activities under the million EUR 8.8 million RSD 350,000 b) 2009 aspect, agriculture statistics in and in agriculture with the EU donor project (SIDA) have over two years. EUR for capacities. line with EU standards Forestry standards; started. The adopted staff and methodology. Statistics b) Implement agriculture Development Strategy for training. Department census as a key priority in Agriculture is harmonised with (Drаgаnа the realisation of this the adopted Strategy for the Mаrkоvic, priority. Ministry of Agriculture, Department MAFWM – Responsibility Forestry and Water Head] of RBS; upgrade Management. Moreover, the MAFWM – cooperation and Action Plan for the [Statistics coordination of MAFWM Development of Statistics in and and RBS. Agriculture had been adopted Analytics Unit (Bоzidаrkа Bаnоvic, Head )] 6.8.4 Finalise process of MFIN RBS – Harmonise RBS – HS2002 adopted in RBS – 2008 harmonisation with HS [Customs national nomenclature 2005. nomenclature System and with HS2007/CN 2007 MFIN – The effective Customs 2000/2002. Policy and implement it. Tariff Law is in full compliance Department MFIN – Implementation. with HS2000/2002 (Official (Nаdicа Gazette of RS, No. 62/05). Pаntоvic, - 149 Customs Comment of European Policy Commission (July 2006): “As Group regards HS nomenclature, it Leader)] should be taken into RBS consideration that as soon as (Еmа the Interim Agreement enters Јоvаnоvic, force, it will be necessary to Assistant adopt and apply the latest Director) version of the Combined EU Nomenclature (based on Harmonised System 2007 rather than Harmonised System 2002)”. Reply of MFIN: MFIN emphasises that the Draft Law Amending the Customs Tariff Law has been adopted by the Government and the law proposal has been sent to the Parliament for discussion and adoption. The Customs Tariff Law conforms both to the International Convention on the Harmonised Commodity Description and Coding System HS2007 and the Combined Tariff of the EU for 2006 and 2007. 6.8.5 Adopt legislation on RBS Adopt the official statistics All opinions have been 1st quarter of 2007 statistics. [Joint law. obtained and the Government Operations is expected to adopt the Bill Department soon and forward it to SNP. (Nikоlа Lаtinоvic, Assistant Director) ] Mid-term priorities 6.8.6 Develop reliable RBS Develop business Activities within the SIDA About 13.2 300,000 End of 2008 economic statistics. [Economic statistics in accordance project have started. The million RSD EUR for Statistics with the EU standards. Annual Plan of Harmonisation over three staff Department of Short-Term Indicators with years. training. (Еmа the EU Standards (2006 – Јоvаnоvic, 2009) has been drawn up. Assistant Director) ] 6.8.7 Build up institutional RBS Harmonise the sytem of Ongoing activities. About 26.4 1 million End of 2008 capacity to produce and [National national accounts with the million RSD EUR until publish basic statistical Accounts EU standards. over three the end data harmonised with Department years. of 2007 European standards in (Аndrа Milојic for staff the area of business Assistant training. 150 statistics, labour market Director)] statistics and national accounts.

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7. SECTOR POLICIES No. Priority Responsibility Necessary activity State of implementation Financial aspect Deadline Obstacles Total Republic CARDS Budget and other external funds A B C D E F G Z 7. 1. Industry and small and medioum enterprises (SMEs) Short-term priorities 7.1.1 Continue implementing ME (AM ME – 1) Produce the ME – 1) The SMEE Council ME – ME – 2) ME – 1) 1st quarter of ME – 1) Lack of the European Charter Pеtаr SMEE Council has been constituted and the 3) To establish about 9 2007; inter-sectoral for Pаvlоvic). Programme; 2) Produce passage of the Programme is a fund for star- million 2) permanent task; 3) coordination in Small Enterprises. PKS methodology of statistical in the pipeline; 2) Draft Law on up companies, RSD 4th quarter of 2007; 4) the SMEE policy [Association monitoring of SMEE in Official Statistics is being about 425 (about the deadline for the implementation; of Small order to join the drawn up; task force for SMEE million RSD 100,000. establishment of 2) discord Enterprises, Observatory of European statistics has been formed and (4.8 million 00 EUR). SMEE Forum is late between the (Dејаn SMEs; 3) Establish a its Operational Plan has been EUR) from NIP, 2007 quality of SMEE Trifunоvic)]. Fund for Start-Up passed; 3) The 2006 Budget and for the statistics and Companies and a envisaged micro-credits for voucher Eurostart “voucher” system; self-employment (11 million system about standards and 4) Establish SME Forum. EUR) and from MLESP’s Pro- 20.2 million lack of PKS – 1) Represent the active Employment Measures RSD (about coordination interest of SMEE (13 million EUR). There is no 231,000.00 between relevant members; 2) Activities coordinated system of (non-) EUR). institutions; 3) concerning connecting financial support to SMEE lack of a SMEE and large, public start-ups; 4) The SME Forum coordinated and transnational has not been established, but system of (non-) companies; 3) Current representation of the SMEE financial support projects; 4) Participate in sector is partially in place as to start-ups. the production of a long- the Government has term development appointed the members of strategy for the south of SMEEE Council which Serbia and Serbian comprises representatives of communities in Kosovo- the ministry, PKS and Metohija in the area of Association of Employers; SMEE and allocation of Besides, the Serbian Chamber funds for the development of commerce has formed an of SMEE sector. SMEE Forum which comprises representatives of PKS and SMEE sector. The Forum has regular meetings where they discuss and try to find ways for competent government bodies to resolve a number of issues in the area of SMEE.

Amendments to the Company Law will include regulations applying to entrepreneurs. 7.1.2 Continue ME (AM Pass legislation (build The Entrepreneur Bill Finalisation of the implementation Pеtаr legal framework), or (harmonised with the system process of re- 152 of the new accelerated Pаvlоvic). amend existing laws not Company Law and Law on registration o company registration complying with the law on Business Registration) was entrepreneurs, system and introduce registration system reform sent to parliamentary i.e. passage and quicker procedures for and status company law. procedure in late December publication of licensing. Amend regulations toward 2005. Ministry of Economy, as around 39,000 introduction of “one-stop- a processor of the decisions. shop”. Entrepreneur Bill, agreed in Further June 2006 that the said bill development of should be withdrawn from the system of parliamentary procedure, electronic considering that the passage communication of of the Law Amending the the Agency and Company Law is in the other public pipeline. The issues that would institutions and have been regulated under the bodies, as well as Entrepreneur Bill will be cooperation in covered by a separate order to speed up chapter, transposed and the start-up incorporated in the text of the procedure. amended Company Law, Activities towards which should enable the establishment regulation of all legal forms of of “one stop business operations, including shop“. entrepreneurs, under one framework law. - With the establishment of the Agency for Business Registers (became operational on 1 January 2005), the procedure of company registration has been accelerated. The registration time has been reduced to 2-3 days, and the whole procedure is done at the Agency itself. - In 2005, the Agency for Business Registers registered 10,600 newly established businesses, and in the first six months of 2006 – 11,265 companies. - The Business Register is comprised of four registration sub-groups: 1. Company Register became operational in January 2005. Parallel with the registration of new companies, the existing companies had to be re- registered in the Agency’s Register. The re-registration procedure implied a legal 153 obligation of companies to submit an application to be re- registered in the Agency’s Register, with the deadline of 15 June 2005 and the obligation of the Agency to re- register companies, without a set deadline. The Agency fulfilled its obligation, the database is now complete and it has 67,260 re-registered and 21,865 newly established companies in 2005 and 2006; 3,928 companies have been erased since the Agency became operational, so that, in total, there are 85,197 active companies at the moment 2. The Register of Entrepreneurs became operational in January 2006, and until 15 June 2006 re-registration was free of charge. Re-registration of entrepreneurs from municipal registers is underway. New entrepreneurs are charged a fee for registration. Registration of new and re- registration of old entrepreneurs are done simultaneously. The same procedure that applies to companies applies to entrepreneurs. In ME’s opinion, however, entrepreneurs are more conscientious, and the Agency, thanks to the last year’s experience, is better prepared for any potential problems that may arise in the operation of this section of Register. From 1 January 2006 to date, 166,459 entrepreneurs applied for re- registration, of whom 123,946 have been re-registered and are now active. Since the Agency was established until the present moment, 46,725 have been registered, whilst 26,902 have been erased from the records. Particularly interesting is the fact that the statistics of 154 business establishments is considerably different from the annual rate in the past 15 years. The annual growth used to be 3-5% and this year it will be over 15%. One of the reasons for this is that the number of businesses has increased by 50%. Another reason is the ratio between the newly established businesses and those that have been shut down, which in the previous two years was around 2,500 and it is around 20,000 today. The procedure of registration of entrepreneurs has been reduced to one day. 3. The Register of Foreign Representative Offices became operational in 2005, envisaging a period of five and a half months for the re- registration of existing representative offices and simultaneous registration of the newly established ones. So far, 992 representative offices have been entered in the database, 49 have been erased from it, so that at the moment, there are 943 active representative offices. 4. The Register of Branches of Foreign Legal Persons became operational in April 2005. To date, 82 branches have been registered, only one has been erased from the register, so that the total number of active foreign branches is now 81. - The possibility to download the application forms from the Agency’s website helps accelerated registration of companies and simplification of procedures. Completed application forms are submitted to the nearest Agency office, in person or by mail. 7.1.3 Continue the PKS ME – Improve the existing PKS has launched the project ME – ME – 2009 (The ME – The issue introduction [EU system of Regulatory of Regulatory Impact Analysis World project document of political 155 of regulatory impact Cooperation Impact Analysis (RIA) to support the Council in ME. Bank; envisages that, until concensus assessments. Bureau through further capacity Bearing in mind the opinion Sweden the moment the regarding the (Mirјаnа building in the Secretariat that through the work of PKS has donation has adoption of the Trifunоvic)] of the Council for committees and associations granted a provided, a four-year Regulatory ME (Аndrеа Regulatory Reform the best impact analysis of donation period will be Reform Strategy Mаrusic) through staff training certain regulations on the of 2.4 necessary to finalise by the (people working in public Serbian economy, it is million staff training and Government, and administration and necessary that the Chamber of EUR capacity building in the issue of involved in work on Commerce is an active partner the Secretariat of the changing the regulations) in the of ME’s in this area. Council for status of the implementation of RIA. ME – Council for Regulatory Regulatory Reform. Council for Reform was founded in 2003 After that, the Council Regulatory as an interim Government for Regulatory Reform from an body. In 2005 and first five Reform would interim to a months of 2006, the Council transform from an permanent for Regulatory Reform gave its interim to a Government opinion on the quality of the permanent body. implemented RIA for over 160 Government body regulations. In addition, during tasked with the 2005, in cooperation with the supervision of RIA in World Bank Institute (WBI), the process of initial training of over 50 civil production of servants in the implementation regulations.) of RIA took place. In cooperation with World Bank, donations to finance training in RIA and capacity building in the Council Secretariat for the Regulatory Reform have been provided. Technical realisation of the donation, which will be administered by the World Bank, is underway. 7.1.4 Improve possibilities for PKS ME – Pass the law on Serbian Chamber of ME – 4th business advocacy and [EU chambers of commerce Commerce has done quarter of representation. Cooperation (establish legal functional analysis that the 2007 Bureau framework). initial work on the chamber (Mirјаnа system will be based on. ME Trifunоvic)] should fulfil this priority ME (AM through full cooperation with Mihаilо the Serbian chamber system, Vеsоvic) i.e. PKS. With a view to improving services rendered to Serbian companies, it is necessary to build appropriate mechanisms of business associations that would give some results in raising the level of competitiveness of companies so that they can join EU market trends as successfully as possible. In this view, PKS should be ME’s partner. 156 ME – The Law on Chambers of Commerce that was passed in 2000 is effective. The PKS Functional Analysis is underway, to be followed by the reorganisation of the chamber system. 7.1.5 Further develop ME (AM 1) Round off the network 1) The territory is not 1а) Around 25 2b) 1), 2) and 3) 4th ME – 1) Lack of local/regional business Pеtаr of regional SMEE adequately coverred and the million RSD Around 3 quarter of 2007 financial support structures Pаvlоvic). agencies and centres on range of services is not (around million resources, (clusters, incubators, the entire territory of adequately developed; the 286,000.00 EUR insufficient business/technology Serbia and subsidize their Government should pass a EUR); 1b) coverage of the parks). sustainability; resolution and project the Around 5 territory and 2) Develop business Budget; 1а) The project of million RSD inadequately incubators and financing the activities of (around developed range 3) Encourage companies existing agencies/centres for 57,000.00 of services; 2) to connect through the the SMEE development, as a EUR); 2а) 54 lack of development of clusters. permanent task, is ensured million RSD coordination with through the 2006 Budget Law. (around local self- 1b) Rounding off the network 617,000.00 government of regional SMEE agencies EUR); 2c) bodies. and centres on the entire Around 179 territory of Serbia; 2) million RSD Development of the national (оkо 2.2 million network of business EUR); 3) 3.4 incubators has started. billion RSD Inucubators have been formed (NIP). in Nis and Knjazevac, and under the 2007 GOPA ME the following projects are planned: Incubator Development Programme [through projects: 2а) Establishment of business incubators (six new incubators in three years, i.e. two incubators in 2007), 2b) ENTRANCE and 2c) Incubators to support entrepreneurship in accordance with the NIP programme]; 3) Under NIP, the Programme of Industrial Zones and Industrial Parks will be carried out; 4) ln 2006, continuity of support to the established clusters (three clusters) and to five new initiatives has been ensured through co-financing.

Mid-term priorities 7.1.6 Implement the ME (AM Strengthen and develop The 2005-2007 Development Around 150 2006-2008 The necessary 157 European Charter on Pеtаr institutional capacities for Plan for SMEE has been million RSD funds (Column F) Small Enterprises. Pаvlоvic). the implementation of passed, as well as the (1.5 million have not been SMEE policy. Belgrade Declaration on EUR). provided, nor Future Monitoring of the have the Implementation of European necessary human Charter for SMEs, and the resources and Decision of the European knowledge Commission on the necessary for the continuation of the process for management and another three years. implememntation Production of the 2005 of the European National Report is underway. Charter for The self-evaluation process SMEs. envisaged by the Index of the SME Development Policy is finished. A bilateral meeting with DG Enterprise was held. In November 2006, the final meeting of National Coordinators for the Implementation of the European Charter for the Countries of Western Balkans was held.

7. 2. Agriculture and fishery Short-term priorities 7.2.1 Strengthen MAFWM 1) Pass the agriculture 1) The Agriculture Bill has For 2006, Twinning 1st quarter of 2007 Lack of staff; administrative capacity (Minister). law; 2) Build been sent to the National MAFWM has Project minimum 30 new for policy formulation administrative capacities Parliament for adoption; 2) earmarked (1.1.2) people should be and implementation. Capacity building is underway. 1,250,000.00 taken on; With a view to building the RSD from its necessary capacity for policy formulating own for the permanent and implementation, in education and education of staff. addition to the launched training of Twinning Project of capacity employees; building in the ministry itself, 600,000.00 MAFWM has started a RSD have Twinning Project in the been provided Veterinary, Plant Protection from the and Republic Waters Budget of the Directorates and in the area of Republic of wine production. Also, the Serbia. project of support to rural development and payment system is underway. 7.2.2 Adopt and start MAFWM [а) а) Pass the law on food а) The Food Safety Law and Twinning 1st quarter 2007 а) Overlapping of implementing Minister; safety; pass the food the Food Safety Strategy are projects responsibilities; framework legislation Veterinary safety strategy; form a being drawn up; b) in the lack of human governing а) food Directorate national body for food Regulations in the area of food Veterinar and technical safety, b) veterinary and (Dејаn safety (e.g. an agency); safety are being drawn up; c) y resources; c) phytosanitary issues. Krnjаic, establish a system of swift Draft laws on plant protection Directorat necessary Director, alarm notification; and on substances used in e permanent staff 158 and b) Pass regulations that plant nurishment are in the (around 2 training; b) lack of Slоbоdаn will enable appropriate public debate, аnd the draft million human Sibаlic);Pla application of the law on substances used for EUR) and resources; lack of nt Veterinary Law; plant protection is being drawn in the financial Protection c) Pass laws on plant up. With a view to adopting Plant resources to Directorate protection, substances and implementing the Protectio engage experts (Mirоslаv used in plant nurishment framework legislation in all n in the areas of Vuјоvic, and substances used for three areas, MAFWM has Directorat veterinary, law, Director); plant protection and a passed the following e (around economy etc; Supervision number of regulations; regulations: on dog marking 1.5 lack of technical Department d) Build capacities in all and registration of marked million equipment for the (AM Stојаn three areas (а, b, c). dogs; on pig, sheep and goat EUR). work of services; Аrizаnоvic; marking and registration of lack of financial EU marked pigs, sheep and goats; resources for re- Integration on the production of the 2006 registration; c) Unit Programme of Measures of lack of staff; (Milаnkа Animal Health Protection; on necessary Dаvidоvic, the list of especially dangerous permanent Head); animal diseases and the list of training; lack of b) communicable animal financial Veterinary diseases to be registered, as resources for Directorate, well on procedures of adequate (Dејаn registration and cancellation of technical Krnjаic, registration; on conditions equipment; lack Director); c) concerning buildings, of staff for re- Plant equipment and tools that registration. Protection professionals and legal Directorate persons must meet to perform (Mirоslаv veterinary activities; on the Vuјоvic, content and registration of Director]. seeds, seedlings, mycelia of edible and medicinal fungi; amendments to the regulation on health inspection of crops and plants for the production of seeds, seedlings and planting material and health inspection of seeds, seedlings and planting material; on the ways and procedures for the production of planting material, fruits, vines and hop. Furthermore, the Ministry has passed a Decree on taking measures concerning the discovery, prevention of appearance and spreading, as well as on combating and rooting-out transmissible spongiform encephalopathy, as well as a Decision on the fees charged for marking and registration of animals. Finally, these regulations have been passed too: on the 159 requirements for the treatment and marking of packaging wood material and on the recognition of mother trees, vines, fruit, vine and hop bushes. - The Farm Land Law and the Organic Production and the Organic Produce Law have been adopted. The Phyto- Sanitary Bill has been adopted by the Government and sent to SNP, as well as the Agriculture Bill. 7.2.3 Upgrade a) veterinary, MAFWM MAFWM - а) Establish a MAFWM - а) The Food Safety MH – MAFWM – 1st MAFWM - а) phytosanitary and [а) network of laboratories Strategy and the Food Safety Reform of qauarter of 2007 Absence of a sanitary laboratories, Veterinary (national, reference, Law should provide a legal veterinary recognisable inspectorates and, b) Directorate regional and local) and framework for the , phyto- laboratory quality inspectorates and (Dејаn coordinate their work; establishment of the network sanitary system; absence external border control. Krnjаic, b) Pass regulations of laboratories and work and of work Director); governing veterinary area; coordination; b) Regulations sanitary coordination; the Plant pass a phyto-sanitary law, governing veterinary area are inspectio need to join a Protection a law on subtances used in the drafting stage; (please n great number of Department in plant nourishment, on refer to Priority 7.2.2); A new services laboratories and (Mirоslаv substances used for plant law on quality control of farm (CARDS organise them Vuјеvic, protection and a new law and food produce in foreign 2003) into an Director, on quality control of farm trade is being drawn up. 5.3 appropriate and Mirјаnа and food produce in MH – The Law on the Agency million. network, as well Kоprivicа,H foreign trade. for Veterinary, Sanitary and as establish good ead); MH – Pass legislation. Phyto-Sanitary Laboratory is coordination and b) being drawn up. management Veterinary within the Directorate network; (Sаndrа b) overlapping of Bаric), Plant responsibilities; Protection the need to Directorate introduce (Mirоslаv systematic Vuјоvic, supervision, Director), constant Supervision education; Department improvement of (AM Stојаn technical Аrizаnоvic)] equipment. MH [Sanitary Inpection and Public Health Department (Zоrаn Vucic, Rаsа Milаnоv)]

160 7.2.4 Complete the MAFWM Build existing Regulation on marking cattle 2009 Additional establishment of a [Veterinary administrative capacities and keeping records of technical support bovine animal Department and upgrade work marked cattle was adopted by should be identification and , Animal conditions and technical the Government in 2005. A provided for the registration system. Registration equipment. system of identification and production and and registration of cattle has been continuous Records established in accordance with maintanance of Unit the above Regulation on high functionality (Јеlisаvеtа marking cattle and keeping of information Milоsеvic)]. records of marked cattle. The system and Regulation on marking pigs, computer sheep and goats and networks; provide registration of marked pigs, training of sheep and goats has been inspectors and passed. The latter will serve operators to work as a guideline for identification on the system and registration of pigs, sheep and to ontrol and goats. The realisation, i.e. marking of the extension of identification animals in the and registration of other field; provide animals has started. adequate facilities for the work of employees in districts. Mid-term priorities 7.2.5 Further strengthen MAFWM – MAFWM will propose Ongoing. Lack of staff, lack administrative capacity Minister. extension of the Twinning of financial for policy formulation Project of capacity resources for and implementation. building in MAFWM. staff training and education. 7.2.6 Design and start MAFWM Build and improve Under the Regulation on 3.3 billion RSD Agreeme Ongoing, as the Lack of human implementing a rural [Rural and existing administrative internal organisation and job for the nt No. realisation of this resources, development policy. Agricultural capacities. sistematisation, MAFWM has measures for 04SЕR01 mid-term priority has permanent staff Developme established a Rural and rural /09/002 – already started. training, nt Agricultural Development development. support upgrading Department Department in charge of rural to rural technical (AM development policy-making developm equipment. Suzаnа and its implementation. In ent DJоrdjеvic 2004 measures were being planning Milоsеvic)]. taken concerning rural and development and in 2005 payment expansion of activities related system to rural development (around 2 continued. The Regulation on million the allocation and use of EUR). incentive funds for investment in agriculture in 2006 was adopted last year. With the establishment of the Rural and Agricultural Development Department, realisation of the Project of Support to Rural Development and Payment 161 System, adoption of the Regulation on the allocation and use of incentive funds for investment in agriculture in 2006 and with the adoption of measures in 2005, policy- making in the field of rural development started and so did its implementation, as one of mid-term priorities. 7.2.7 Continue strengthening MAFWM MAFWM – Pass MAFWM – Regulations are MAFWM – Ongoing. MAFWM – Lack veterinary, sanitary and [As in regulations in the area being drawn up; The Twinning of staff, lack of phytosanitary legislation Priority veterinary and phyto- project concerning wine in financial and control in the area 7.2.2; sanitary protection; pass Serbia is in the pipeline; resources for of food safety, including Primary a wine law; improve MAFWM will propose capacity building wine laboratories. Production administrative capacities extension of the Twinning and upbgrading Unit is further. MH – а) Pass a Project of capacity building. technical responsible law; b) Pass Food Safety MH – а) The Food Safety Law equipment. for Strategy. is being drawn up; b)Tthe laboratories document is in the public for wine debate. control [Dаrkо Јаksic, Head] MH [Sanitary Inspection and Public Health Department (Rаsа Milаnоv)] 7.2.8 Improve waste MAFWM MAFWM – Build and MAFWM – In December 2005, MAFWM – MSEP – MAFWM – Ongoing. MAFWM – Lack management and (Minister) improve administrative MAFWM started the project Total value of (CARDS MSEP – 4th quarter of of staff, funds for reduce agricultural MSEP capacity. that deals with the pollution of the project is 2006): 2009 staff education pollution. (Environme MSEP – 1) Adopt waste the river Danube. The project around 8 million and training, nt management law; 2) Build will last four years. 20,000,000.00 EUR for ubgrading Protection administrative capacity; 3) MSEP – 1) In parliamentary USD (so far, the equipment. Directorate Investement and technical procedure; 2) Capacity around 9 reconstru MSEP – The - measures are necessary. building is underway; 3) million USD ction of building of Mirоslаv Technical and operational has been existing rubbish dumps is Nikcеvic, Comment: CARDS and instruments are being agreed on; the and the responsibility Director, other funds from developed (waste collection project is building of local self- and Јаgоs donations: CARDS 2006 centres, shutdown of existing partially of government Rаicеvic, – 8 million EUR, funds for rubbish dumps of 4th category, financed by regional units; insufficient Assistant the reconstruction of construction of regional World Bank, rubbish administrative Director for existing and construction rubbish dumps, reconstruction GEF, SIDA, dumps capacities; lack of environmen of regional rubbish of existing rubbish dumps). and own (Local awareness of the t protection) dumps. - resources). Self- need to improve The National Waste Governm waste Management Strategy ent management, (NWMS) was adopted by the Infrastruc which is why Serbian Government in 2003. ture depot places are 162 In the framework of NWMS Agency). not a priority; lack application, the Environmental Under of financial Protection Directorate of the IPA resources, i.e. Ministry of Science and Fund, 10 credit Environment Protection million indebtedness of continued the programme of EUR will local self- financing and co-financing of be government projects in the field of waste earmarke units. management. Education of the d for public also continued through regional public meetings, public rubbish debates and the media. So far, dumps in production of technical 2007. documentation for the construction of 11 regional rubbish dumps covering 57 municipalities (more than 2 million people) has been co- financed, as well as the production of project documentation for financial rehabilitation, shutdown and re-cultivation of existing rubbish dumps, covering 51 municipalities. The establishment of three regional rubbish dumps for 19 municipalities was also co- financed.

7.2.9 Strengthen agricultural MAFWM Build and develop existing MAFWM started realisation of For the Ongoing – realisation Lack of staff, lack and food market (Minister). capaciites; further this priority through the introduction of of the project has of financial systems, including develop agrarian policy implementation of agrarian the quality already started. resources. quality controls and measures. policy measures in 2004 and control system hazard analysis and 2005. This includes incentives and HACCP in critical control point to introducing the quality 2005, 300 (HACCP). control system, Hazard million RSD Analysis and Critical Control was Points (HACCP), and the earmarked, Regulation on the allocation and in 2006 and use of incentive funds for around 350 investment in agriculture in million RSD 2006. was planned. Around 2 billion RSD was earmarked for the implementation of the aforementioned Regulation. 7.2.10 Reduce policy MAFWM Develop agrarian policy Regulation on the use of Around 1.8 Ongoing. distortions of agricultural (Minister) measures further. incentive measures for non- billion RSD for markets. commercial farms in 2006. 2006 163

7.2.11 Reform the Commodity MTTS Pass the law on The law is being drawn up. 2nd quarter of 2007 Reserves Directorate. (Directorate commodity reserves. During the reporting period,the of work on the Draft Law on Commodity Commodity Reserves started Reserves, in the Republic Directorate of Dusan Commodity Reserves. Dаmјаnоvic , Director, and Slаvоmir Rаicеvic Secretary of MTTS, as a President of Commissio n for the production of the Law on Commodity Reserves) 7.2.12 Expand the MAFWM – identification and As in 7.2.4. registration of animals to encompass more species. 7.2.13 Prepare a programme MAFWM Based on the Veterinary Regulations are being drawn Ongoing. Lack of staff; staff for up-grading food [Veterinary Law, pass regulations in up. They will comply with the training in facility processing Directorate this area; capacity EU standards. control is establishments to meet (Slоbоdаn building. necessary in the EU requirements. Sibаlic)]. way and scope applied in ЕU. 7. 3. Environment Short-term priorities 7.3.1 Continue approximating MSEP 1) Pass laws on air 1) The Environmental 1) TAIEX, 1) Finalisation of draft Four persons are legislation to EU (Environme protection, waste Protection Directorate of the REReP laws and their working on the legislation and nt management, packaging Ministry of Science and 2) adoption by the harmonisation of standards Protection and packaging waste and Environmental Protection CARDS Government – 4th regulations in the (air pollution, waste Directorate, environment protection; 2) produced the draft laws 2003, quarter of 2007, Directorate, and it management and Mirоslаv Build administrative governing air protection, waste ECBR, except for the Draft is necessary to nature Nikcеvic, capacity (employ new management, non-ionizing within Law on Environment employ new protection). Director; people in the Bureau of radiation, as well as one of Protection, which employees in the Gоrdаnа Monitoring amendments to the the sould be adopted in Bureau of Pеtkоvic, Implementation of Environmental Protection and compone 2nd quarter of 2007. Monitoring Assistant Environment Regulations Fishery Laws. The bills were nts of the Environment Director for and Legal Adminstration; adopted by the Serbian project, Regulation the provide projects of Government in the 2nd quarter assistanc Implementation monitoring technical support). of 2006 and forwarded for the e in the and of parliamentary procedure. productio Adminstrative application The following draft laws are in n of the Supervision; of the final stage of production: law has relevent EU regulations on environmental protection, been Directives should 164 in the area on the management of provided. be translated into of chemicals, on biocides, on Serbian. environmen protection from ionizing t protection radiation, and on packaging and and packaging waste. administrati ve and supervisory work). 7.3.2 Adopt and start MSEP 1) Pass National 1) The Environment Protection 3) 2) and 3) 4th quarter 3) It is necessary implementing the (Environme Environment Protection Law prescribes production of CARDS of 2007 to take on new National Environment nt Programme (Strategy); 2) the National Environment 2003; members of staff Protection Strategy. Protection Produce action plans for Protection Programme as a ECBR, in the Strategic Directorate, realisation of the National strategic document in this field one and Programme Mirоslаv Environment Protection for the period of 10 years. This project Policy Nikcеvic, Programme; 3) Build document should be adopted compone Development Director; administrative capacity. by the Serbian Parliament. In nt refers Bureau, establish Zеljkо mid-June 2006, the Serbian to new sectoral task Pаntеlic, Government adopted the Draft assistanc forces, provide Assistant National Environment e in training and Director for Protection Programme, which productio administrative strategy was then sent to parliamentary n of the capacity building. and procedure. 2) The National programme Environment Protection Law Environm policy prescribes a deadline of one- ent developmen year from the adoption of the Protectio t) National Environment n Protection Programme for the Strategy, production of action plans. In and order to carry out this assistanc recommendation and produce e in action plans, the Environment productio Protection Directorate has n of been granted the extension of action the CARDS 2003 project plans Environmental Capacity (under Building under which the Draft the National Environment extension Protection Programme has of been produced; 3) The project). (existing) capacity building is in progress. 7.3.3 Strengthen MSEP Administrative capacity The (existing) administrative Austria, 4th quarter 2007 It is necessary to administrative capacity [Environme building. capacity building is in Italy – 1 (a certain number of employ more notably of institutions nt progress. Extension of million employees of local, people and and bodies in charge of Protection CARDS 2003 project EUR; regional and republic provide technical planning, permitting, Directorate Environmental Capacity CARDS bodies will be trained assistance inspecting and (Mirоslаv Building has been approved. 2003; in the application of projects for monitoring, as well as Nikcеvic, Capacity building in the ECBR, these regulation) administrative project management. Director)] Environmental Protection one capacity building. Directorate and in compone environmental inspectorates is nt of the in progress under the above project, project. Under the REReP Norwiega 165 project – capacity building in n project environment protection of the ISLE inspectorates in the EU around Accession Countries (ECENA 370,000. Network) is being 00 EUR; implemented. In addition, the TAIEX, Project Proposal concerning ECENA, capacity building in the REReP; application of regulations in Multilater the field of industrial pollution al Fund (supported by Norway) has for the been approved; the financing implemen of the two projects has been tation of provided from the Global Fund Montreal for Environment Protection. Protocol 2.6 Further administrative capacity million building will be implemented USD; through the projects within GEF/UN bilateral cooperation with the DP countries in the region, as well project as with the EU Member “Strategy States, under IPA projects and for through TAIEX. biodiversi ty” 319,970. 00 USD; GEF/UN DP project NCSA 116,376. 00 USD. 7.3.4 Develop a multi-annual MSEP 1) Administrative capacity 1) Building (new) capacities is It is necessary A 4th quarter of 2007 plan for financing [Environme building. 2) It is necessary in progress. Under the new job to provide a compone (a certain number of investment. nt to produce action plans organisation in the technical nt within employees of the Protection and financial rehabilitation Environment Protection assistance CARDS Environment Directorate plans for the Directorate, the Project project in order 2003; Protection (Mirоslаv implementation of the Planning/Management Unit to produce a ECBR Directorate will be Nikcеvic, National Environment has been established. 2) plan for “Producti trained in investment Director)] Protection Programme, Action and financial plans for financing on of planning in the area use them as a base for realisation of the National investment. action of environment preparation of proposals Environment Protection plans”. protection. The Plan of investment projects Programme (which is being for financing and a financial plan for drawn up) envisage measures, investment will start.) their realisation. executives, dynamics and funds for the realisation of the plan. - The Fund for Environmental Protection was established under the Environment Protection Law and it became operational in May 2005. 166 The Fund for Environmental Protection generates its revenue from the following sources: the funds earmarked in the Republic Budget acquired from fines prescribed under Articles 27 and 45 and from fines prescribed under Article 85 of the Environment Protection Law (in accordance with the Regulation on the types of pollution, criteria for the calculation of fines for environment pollution, amounts and methods of calculation and payment of fines); resources generated from privatisation; international bilateral and multilateral cooperation on environment protection; programmes, projects and other activities concerning environment protection and energy efficiency; revenues and receipts from the management of the Fund’s free monetary resources; contributions, donations, grants and assistant; other legal resources. The Fund performs operations connected with the financing of preparations for implementation and development of programmes, projects and other activities in the area of maintaining, sustainable use and improvement of environment, as well as in the area of energy efficiency and use of renewable sources of energy. The Fund’s resources are used for the financing of action plans and financial rehabilitation plans in accordance with the National Programme. They are allocated to legal and natural persons and the Fund’s beneficiaries to finance action plans and financial recovery plans through loans, guarantees and other forms of guarantees, subsidies, 167 assistance and donations based on public competitions announced by the Fund. The Project Plan to be financed from the Fund for Environmental Protection is being drawn up.

7.3.5 Implement adopted MSEP 1) Pass regulations; pass 1) The Law on the 5 million RSD UNIDO 4th quarter of 2007 With the passage legislation, notably on (Environme a strategy for bringing Environment Impact was planned donation (Education of EPD of laws in the environmental nt cleaner production in Assessment prescribes for 2006. – staff continues in the area of assessments and Protection Serbia; 2) Build environment impact 50,000.0 implementation of environment industrial pollution. Directorate, administrative capacities. assessment procedures. The 0 USD; laws governing protection Mirоslаv Government has passed TAIEX, environment impact (December Nikcеvic, regulations laying down a list REReP - assessment and 2004), Director; of projects that will need ECENA , industrial pollution.) decentralisation Јаgоs impact assessment, as well as Norwegia of responsibilities Rаicеvic, a list of projects that the n project was carried out; Assistant impact assessment analysis ISLE ongoing training Director for are likely to be required for. about of employees of environmen The following regulations have 370,000. Environment t protection) been passed: 00 EUR. Protection 1) On the content of impact Direcotorate and assessment study; local self- 2) On the content of the government units application form for the in the evaluation of whether implementation of impact assessment is regulations necessary and on governing establishing the scope industrial and content of the impact pollution. assessment study; 3) On the procedures of public viewing, presentation and discussion about the impact assessment study; 4) On the technical commission tasked with the evaluation of the impact assessment study; 5) On the content and method of keeping a public register of the impact assessment studies that have been done. The Environment Protection Directorate has prepared Guidelines for the Environment Impact 168 Assessment Procedure, which regulates in detail procedures and obligations of all the involved – the applicant, the responsible government authority, the public, technical commission etc. The Guidelines contain all the necessary application forms - 51. On average, 5% projects that sent their applications were rejected in the environment impact assessment procedure, and 90% projects have been amended. The Law on Strategic Environment Impact Assessment was passed in December 2004. It regulates requirements and the procedure for the environment impact assessment of certain plans and programmes, in order to ensure environment protection and improve sustainable development by integrating fundamental principles of environment protection in the procedure of application and adoption of plans and programmes. Under the programme of the European Agency for Reconstruction supporting the implementation of strategic impact assessment, the Guidelines for the Production of Strategic Impact Assessment are being prepared. 2) Capacity building in the ministry and local self- government units is in progress. Currently, regulations are being drawn up and UNIDO pilot-project Early Assistance in the Establishment of the National Programme of Cleaner Production in SCG is in progress. In addition, preparatory activities for the establishment of the National Centre for Cleaner Production 169 with the assistance of UNIDO have started. The Project Proposal concerning capacity building in the field of industrial pollution has been approved in the framework of Norwegian financial assistance in 2006. On 29 and 30 March 2006, the IPPC training of 20 employees of the Environment Protection Directorate was organised under the TAIEX Programme. In cooperation with the Joint Research Centre, a seminar on application of the IPPC Directive was held on 15 and 16 June. Several training courses aimed at capacity building in the inspectorates for environmental protection within CARDS 2003 project Capacity Building in the Field of Environment Protection, have been organised: the training programme for environmental protection inspectors in the waste management (Basel Convention) was held in Belgrade; the training programme for inspectors in Sabac and Uzice under the project Capacity Building in the Environmental Protection Inspections – around 100 participants from the republic and local self-government levels attended the training (a handbook of Instructions for Environment Inspection was printed afterwards in 300 copies); 60 inspectors were trained in good public communication, including communication with the media (the training was organised by the Environment Protection Directorate in Uzice, Nis and Belgrade); some inspectors attended international seminars and training programmes in how to handle accidents as well as in border control; five inspectors attended a training programme 170 in Lithuania, which was organised by the Atomic Energy Agency in Vienna – the training was aimed at capacity building in the inspectorate tasked with the control of radioactivity in industry and medicine. 7.3.6 Start construction of a MSEP Designate a location for The Feasibility Study of CARDS – 4th quarter of 2007 Citizens and local facility for the treatment (Environme the plant for safe disposal Hazardous Waste 14 self-government and safe disposal of nt of hazardous waste. Management was produced million did not accept the hazardous waste. Portection and 14 million EUR have been EUR (for location Directorate, provided from CARDS 2004 – MH and designated for Mirоslаv Support to Hazardous Waste MSEP) the waste Nikcеvic, Treatmant) for building this management Director; plant. Due to the problems plant. Јаgоs regarding citizens’ disapproval Rаicеvic, of the location of this plant, Assistant and the fact that local self- Director for government units would not environmen give their consent to the t protection) building of the plant on their territory either, the activity is now stalled. Funds provided for this project have been allocated to the project of medicinal waste management. Mid-term priorities 7.3.7 Continue implementing MSEP 1) Pass regulations; 2) 1) Underway (the Annex to 4th quarter of 2009 It is necessary to and enforcing legislation [Environme Build (existing) this document contains a list of (passage of employ more approximated to EU nt administrative capacity. regulations that should be regulations in people to work on legislation. Protection passed on the basis of accordance with the legal Directorate adopted and proposed laws); dynamics of law harmonisation, as (Mirоslаv 2) Capacity building is in adoption; well as those Nikcеvic, progress (as in Priority 7.3.3). simultaneously with working on the Director)] the legal implementation harmonisarion (licence issue; procedure training planning; projects are being inspection); implemented provide capacity concerning the building projects application of those and training of regulations – staff at central capacity building and local levels. continues. 7.3.8 Continue to implement MSEP – Ensure capacity building Capacity building is in 4th quarter 2009 legislation on Environmen and train those who work progress. environmental impact t Protection on issuing consent to Capacity building and assessment. Directorate impact assessment As in Priority 7.3.3. staff training in the Mirоslаv studies, both at central Environment Nikcеvic, and local levels. Protection Director; Directorate in the Јаgоs implementation of 171 Rаicеvic, laws governing Assistant environment impact Director for assessment environmen continues. t protection. 7.3.9 Ratify and start MSEP 1) Pass a law on 1) The Ministry of Science and UNDP / 2) 4th quarter of 2009; Necessary implementing the Kyoto (Environme ratification of Kyoto Environmental Protection has GEF capacity building for regulations are Protocol. nt Protocol, law on air prepared the Ratification of (Project the application of still not in place Protection protection and relevant Kyoto Protocol Bill, which was “Producti Kyoto Protocol. and the existing Directorate regulations; adopted by the Government in on of institutional Mirоslаv 2) Build administrative late 2006. Kyoto Protocol First capacities are Nikcеvic, capacity. should be ratified at one of the National insufficient for the Director; first sessions of the Serbian Communi application of Mirоslаv National Parliament. cation”) – required Spаsојеvic, Considering that Serbia is not 400,000. obligations. Assistant listed in the Annex to the UN 00 USD; Director for Framework Convention on the - European Climate Changes and that its Bilateral integration status will be the same under assistanc and the Kyoto Protocol, it is not e of the international obligated to reduce gas Italian cooperation emissions that cause the Ministry ) greenhouse effect in the first of compulsory period from 2008- Environm 2012. Regardless of this fact, ent however, Republic of Serbia is Protectio preparing a plan of activities n and with the aim to reduce gas Territory emissions causing the – around greenhouse effect. 100,000. The Law on Air Protection was 00 EUR. adopted by the Government in the 2nd quarter of 2006 and sent to parliamentary procedure. 2) Capacity building is in progress. 7.3.10 Ensure a viable financial MSEP Build administrative Administrative capacity does 4th quarter 2009. It is necessary to framework for the (Environme capacity and reform the not exist. Action plans and (Creation of financial employ new staff implementation of a mid nt system of financing of financial rehabilitation plans network is a process and train them – to long-term Protection evironment protection. In are being prepared. They are and this objective will attract environment protection Directorate line with envisaged under the be achieved investment, policy. Mirоslаv Recommendation 7.3.4, Environment Protection Law. gradually.) provide loans Nikcеvic, develop a multi-annual Further administrative capacity from international Director). plan for financing building is planned in the Fund financial investment. for Environment Protection. institutions, Project Planning and conditions for Management Unit has been using established in the Environment international and Protection Directorate. EU funds.

7.3.11 Adopt and start applying MSEP 1) Pass National 1) Please refer to Priority 4th quarter of 2007 – the strategies (Environme Environment Protection 7.3.2. for the production of concerning air pollution, nt Programme (Strategy); 2) 2) The Serbian Government action plans; 4th waste management and Protection Build administrative adopted the National quarter of 2009 – for 172 nature protection. Directorate capacity. Environment Protection administrative Mirоslаv Strategy (NEPS) was adopted capacity building and Nikcеvic, in 2003. implementation. Director; - Zеljkо Air pollution and environment Pаntеlic, protection strategies do not Assistant exist, and their production is Director for not envisaged, considering strategy that the strategic air and and environment protection is programme planned under the National policy Environment Protection developmen Programme (Strategy) and it t; Јаgоs will be carried out according to Rаicеvic, action plans. Assistant - Director for (Please also refer to Priority environmen 7.2.8.) t protection; Slоbоdаn Rеgnеr, Assistant Director for environmen t protection) 7.3.12 Continue MSEP MAFWM and MSEP –1) MAFWM – 1) It is necessary MAFWM – 4th quarter implementation of the (Environme Pass action plans for the to pass the National of 2007 to pass national environment nt realisation of the National Environment Protection action plans; 4th protection strategy and Protection Environment Protection Programme (Strategy), and to quarter of 2009 for the water strategy. Directorate Programme; 2) Build follow it by the production of administrative Mirоslаv administrative capacity. action plans in order to carry capacity building. 4th Nikcеvic, out the National Environment quarter of 2007 to Director; Protection Programme. pass action plans; 4th Zеljkо Protection of waters was quarter of 2009 for Pаntеlic, planned under the National administrative Assistant Environment Protection capacity building. Director for Programme and it will be MSEP – 4th quarter of strategy carried out through the Action 2007 to pass action and Plan for Protection of Waters. plans; 4th quarter of programme In the reporting period, in the 2009 for policy Republic Directorate of administrative developmen Protection of Waters capacity building. t) (MAFWM), the application of MAFWM the Strategy on Waters, i.e. [Republic the Serbian Water Waters Management Base and Directorate Strategy for Sustainable (Nikоlа Development of Serbian Water Mаrјаnоvic, Management continued. Director)] Realisation of the Twining project in the field of waters, Institutional Capacity Building in the Republican Directorate for Waters, started on 24 May 2006. The Project is financed 173 by the EU and managed by the European Agency for Reconstruction, and partners in the Project are the Ministry of Agriculture, Environmental Protection and Water Management and German Ministry of Environment, Nature Protection and Nuclear Safety. This Project has initiated two-year cooperation (2006-2008) between the Republic Directorate of Waters and German partners, with a view to harmonising the work of the Directorate with the principles of the EU policy concerning waters. MSEP – 1) The Environment Protection Law envisages a one-year deadline from the day of adoption of the National Environment Protection Programme for the production of action plans. The action plans are being prepared under the CARDS 2003 Environmental Capacity Building. (Please also refer to Recommendations 7.3.2 and 7.3.11) 7.3.13 Continue strengthening MSEP Employ more people in Capacity building is in 4th quarter of 2009 It is necessary to administrative capacity [Environme the Environment progress. (Please also refer to provide technical of environmental nt Protection Direcotrate, Recommendations 7.3.3) assistance institutions and bodies. Protection Fund for Environment (training) Directorate Protection, Environment projects. Mirоslаv Protection Agency Nikcеvic, (licence issue, planning, Director)] inspection, monitoring); provide staff capacity building projects both at the central and at the local levels. 7.3.14 Start applying the MSEP 1) Administrative capacity 1) Underway; 2) Has not 1) 4th quarter of 2009 multiannual plan for [Environme building; 2) Apply multi- started yet. – for administrative financing investment. nt annual plan for financing capacity building; 2) Protection investment (produce 4th quarter of 2007 Directorate action plans for the Mirоslаv implementation of the Nikcеvic, National Environment Director)] Protection Programme and based on them prepare investment project proposals, in the 174 framework of establishment of a decentralised system of IPA Funds management; provide staff training and produce a multi-annual plan of financing investment). 7.3.15 Finalise construction of MSEP Please refer to Priority a [Environme 7.3.6. facility for the treatment nt and safe disposal of Protection hazardous waste. Directorate Mirоslаv Nikcеvic, Director)] 7. 4. Transport policy Short-term priorities 7.4.1 Complete the MCI [Air 1) Pass a law on civilian The Multilateral ECAA 1) 4th quarter of The status of the programme and Transport aviation; define legal Agreement between Albania, 2007; 2) 2nd quarter Directorate is not continue Department status of an independent Bosnia-Herzegovina, Bulgaria, of 2007; 2.1) action regulated. It will to align the aviation (Milаn and autonomous body in Croatia, Iceland, Former plan in the 1st quarter be regulated legislation with the EU Mоkоvic); charge of civilian aviation Yugoslav Republic of of 2007, and under the Law on acquis in view of the Civilan affairs in RS; constitute Macedonia, Norway, Serbia- implementation of the Civilian Aviation European Common Aviation regulatory and Montenegro, Romania, UN 1st transition stage by Directorate which Aviation Area (ECAA). Directorate supervisory body, Interim Administrative Mission the end of 2007; 2.3) is in the (Drаgоljub regulate aviation activities to Kosovo and European 4th quarter of 2007; 3) parliamentary Trgоvcеvic)] and provide stable and Community was singed on 30 2nd quarter of 2007; procedure. independent sources of June 2006. 4) permanent activity. financing; 2) ratify the 2) Cooperation is necessary Agreement on ECAA ; between aviation authorities, 2.1) Produce action plan line ministry and aviation and start implementation economy in order to define of the first transitional realistic deadlines of the first period from the ECAA and second transition stage; Agreement; provide 2.2) JAA’s expert team paid a implementation of all laws fact finding visit (FFV) and and regulations governing gave positive feedback and a aviation safety, as proposition to confirm envisaged in Annex I of membership in ЈАА at the ЈАА the Agreement; apply Board meeting (November Document 30 (ECAA) and 2006); 2.5) Ratification implementation of all laws procedure finalised in 2006; 3) and regulations governing Ratification procedure started. aviation safety, as envisaged in Annex I of the Agreement; apply: Council Regulation (EEC) No. 3925/91 (concerning the elimination of controls and formalities applicable to cabin and hand luggage), 175 Council Regulation (EEC) No. 2409/92 (on fares and rates for air services), Council Directive 94/56/ЕC (establishing fundamental principles governing the civil aviation accidents), Council Directive 96/67/ЕC (on access to the ground handling market at Community airports), Council Regulation (EC) 2027/97 (on air carrier liability in the event of accidents), Council Regulation (EC) 2003/42 (on incident/accident reporting), Directive (EC) 261/2004 (on withholding the right to board), Denied Boarding Compensation Regulation (EC) 2000/79 and Directive 2003/88/ЕC (concerning certain aspects of the organisation of working time), as envisaged in Annex I of the Agreement; unbundle air transport service provider and regulatory body; establish supervisory body for air traffic control; start reorganisation of air space into a functional block/blocks and apply flexible use of air space; make progress in the implementation of rules on state aid and competition; 2.2) Become a full member of JAA – Joint Aviation Authority]; 2.3) Produce action plan for implementation of the second transition period which includes full application of the Agreement, including all regulations listed in Annex I; 2.4) Continue active participation in the Task Force for the 176 application of SEE FABA; 2.5) Ratify the Convention for the Unification of Certain Rules for International Carriage by Air (Montreal Convention); 3) Ratify the Agreement with the European Community on certain aspects of air transport; 4) Pass regulations in line with the new aviation law. 7.4.2 Implement the MCI The Five-Year Multi-Annual Participation of Share of Share of Insufficient Memorandum of (Miоdrаg Plan 2006-2010 was adopted a CEETO CEETO CARDS information about Understanding on the Јоcic, State in May 2006. Priority signatory signatory 2003 SЕЕTО; lack of Development of the Secretary). investment is incorporated in country is countries in the funds in capacity for South East Europe Core the plan. In November 2006 determined on Budget: 0% in the cooperation. Regional Transport the Five-Year Multi-Annual the basis of the 2004 and 2005; SЕЕTО Network including the Plan 2007-2011 was adopted. share of the 25% (around Budget: Transport Observatory. candidate 29,000 EUR is 100% in project’s value the share of 2004 and of that country RS) in 2006; 2005; in the total 50% in 2007; 75% in value of all 100% from 2006; projects that 2008. 50% in have applied 2007; 0% for SЕЕTО from plan. 2008. 7.4.3 Adopt and implement a MCI All three subprojects of the 2007 (for Master national transport (Miоdrаg Master Plan and the Feasibility Plan); 1st quarter strategy (road, rail, Јоcic, State Study for the Network of 2007 (for the aviation and Secretary). Internal Waterways in the adoption of the waterways), Republic of Serbia were Strategy) with attention to the finished in June 2006, when it economic viability of the was presented to the public. sector. Formal adoption of the Master Plan is expected by the end of 2007. Preparation of project documentation for concrete projects defined in the Master Plan is underway. - The Transport Development Policy and Strategy in Serbia by 2015 is finished. 7.4.4 Implement the new Rail MCI 2) 2nd quarter of 2) Lack of staff. Law. [Departmen 1) The following have been 2007 t of Rail and passed with a view to Intermodal implementing the Rail Law – Transport regulations: on the licence fee (Dејаn for rail infrastructure Lаsicа)] management; laying down the requirements for the issue and 177 the content of certificates of safety concerning rail infrastructure management and industrial rail management; on fees for the issue of certificates of safety concerning rail infrastructure management and industrial rail management; on the licence fee for rail transport of passengers and goods; laying down requirements for the issue and the content of certificates of safety for rail transport of goods and passengers; on fees for the issue of certificates for rail transport of goods and passengers, and on fees for issue of licences to use rail vehicles, spare parts and equipment for rail vehicles, spare parts and equipment for railway infrastructure. 2) Three more regulations are envisaged. They will regulate the following issues: components of railway infrastructure; conditions and procedures for the payment of fees for the prescribed obligation of providing public transport; the content of the contract from Article 76 of the Railway Law; categorisation of railways; methodology used in assessing the criteria for fees to be paid in order to use railway infrastructure, organisation and regulation of railway transport.

7.4.5 Complete the master MCI Pass the law amending The law is being drafted under December 2007 plan for inland [Water the Law on Sea and the Twinning Project and it navigation. Transport Inland Navigation. complies with the EU and regulations to some extent. Navigation Safety Department (Ivаnа Tоmic)] Mid-term priorities 7.4.6 Strengthen capacity MCI The Project Proposal 178 building, including [Miоdrаg concerning the reinforcement project preparation for Јоcic, State of intermodal transport has large investments. Secretary; been forwarded to the Ministry Rail and of International Economic Intermodal Relations for finalisation. It Transport should be finalised in 2007. Department The Project Proposal may be (Dејаn rejected. Lаsicа); - Water The Project Proposal Transport concerning the establishment and of a market-justified route of Navigation combined transport between Safety Austria and Serbia has been Department forwarded to the Ministry of (Ivаnа International Economic Tоmic)] Relations for finalisation. The Project Proposal may be rejected. 7.4.7 Continue to earmark MCI [Water Start implementing the second Permanent activity. sufficient resources for Transport transition stage, i.e. full the maintenance of and application of the ECAA transport infrastructures Navigation Agreement, including all and institutions. Safety regulations listed in Annex I. Department (Please refer to Priority 7.4.1). (Ivаnа Tоmic); Civilian Aviation Directorate (Drаgоljub Trgоvcеvic)] . 7. 5. Energy Short-term priorities 7.5.1 Start implementing the MRЕ Produce detailed National The activities concerning the 30 million RSD 30 million RSD End of 2007 The problem is in commitments [European Action Plan for Effective reform of energy sector planning the undertaken in the Integration Implementation of the performed so far are implementation of framework of the and Treaty Establishing the compatible with the the Treaty Energy Internationa Energy Community. requirements of the Treaty Establishing the Community Treaty. l Establishing the Energy Energy Cooperation Community. They are, Community, as it Department primarily, the following: is a very (Mirоslаv passage of the Energy Law complex, Kukоbаt)] and its regulations; Serbian multidisciplinary Energy Development Strategy matter. until 2015 and the National Furthermore, it Action Plan for Gassification of requires great Serbia. knowledge of EU MME, which prepared the regulations in the documents listed above, and areas covered by the Serbian Energy Agency, the Treaty, as as an independent regulatory well as 179 body, are the most responsible considerable institutions for their technical and implementation. financial The Government has assistance of the continually been committed to international the reform of the energy community, sector, and this was crowned primarily the EU. by the Treaty Establishing the Also, when Energy Community. Bearing in planning, it mind the obligations stemming should be born in from the Treaty, it is necessary mind that the to allocate funds from the implementation of Budget to meet these the Treaty is a obligations. long-term MME has started preparations process with for the production of a detailed serious National Action Plan for the economic, Implementation of the Treaty political and Establishing the Energy social Community, primarily through implications cooperation with the foreign whose (Twinning) experts engaged understanding of by the ministry and through all relevant cooperation with the experts of structures should the interim Secretariat of be ensured and Energy Community with the strong logistic headoffice in Vienna. and financial The Implementation Plan for support on the Annex 1 to the Agreement part of the lasting until 01.01.2008 was Government adopted on 17.11.2006 at the should be meeting of the Council of provided in Ministers of the Energy accordance with Community in Skopje. the obligations stemming from the Energy Community Treaty. A particularly great challenge is reaching economic prices of energy and taking measures to reduce negative effects of energy-related activities on the environment, in line with the EU requirements. 7.5.2 Fully implement the MRЕ Prepare draft law The Energy Law, which has CARDS Energy Law also (DJоrdjе amending the Energy harmonised our legislation in for the ensuring a smooth Mihајlоvic, Law. (Amendments to the the area of energy with energy functioning of the State Energy Law must reflect relevant regulations of the sector: 4 180 independent Energy Secretary) the requirements European Union was passed million Regulatory Agency. pertaining to the Treaty in 2004. Based on the analysis EUR. Establishing the Energy of issues that occurred in the (Establihs Community, primarily with implementation of the Law so ment and regard to further far, amendments will be made work of restructuring of the with a view to overcoming the the energy sector and shortcomings observed in Energy introduction of incentives certain provisions in order to Regulator for upgrading energy ensure more efficient y Agency efficiency and better application of the Law. in the first exploitation of renewable Therefore, draft amendments two years sources of energy. to the Energy Law are EU’s After the production of the underway. donation, programme for the - in realisation of the strategy The Energy Agency (became accordan and a study that will operational on 16.06.2005) ce with research the best has passed tariff systems and the incentive mechanisms for prescribed the methodology to Agreeme the development of be used when forming prices nt signed renewable sources of of energy for tariff buyers on 29 energy, it will be possible (primarily households and July to round off the necessary small consumers), and of 2005) legal framework. transmission and distribution Amendments to the of energy. These tariff systems Energy Law will also and methodology, together prescribe the with the Regulation on market establishment of the Fund operation, present the reform for Energy Efficiency and of energy sector (please also Renewable Sources of refer to 5.1.16). Financial Energy. Creation of the resources for the plan of implementation for establishment and work of the Directive 2001/77 by mid- Agency are provided from the 2007 is explicitly required revenues generated from fees under the Energy for the issue of licences, tariff Community Treaty. (partly) for the access to and use of the system, as well as Requirements of the other income generated in Agreement on performing activities in its environment protection domain in accordance with the from the negative effects law. Total profits and of energy-related expenditures of the Agency activities, then those are established under its concerning compliance annual financial plan, which is with the EU practice in the approved by SNP. area of competition and The amendments to the social aspects of Energy Law are being drawn implementation of the up. The Regulation laying Agreement should be met down conditions for the by other ministries in the delivery of natural gass was Government of Serbia published in the Official (primarily those Gazette of RS No. 47/06 of responsible for 2.06.2006. The said environment, competition, amendments to the Energy social isues and Act will prescribe a more finances.) important role and autonomy 181 in the functioning of the regulatory Energy Agency (Serbian Energy Agency).

7.5.3 Continue environmental MME MME – Reduce negative MME – The study entitled MSEP - MME – MME and MSEP – audits on energy plants [General effect of energy-related “Control of emissions from Provision of CARDS Permanent task. and address the worst Energy activities to the electric power plants burning financial for polluters Department environment, as largest coal” is finished. It was used resources for energy (Vlаdаn polluters. as a base for tender investment in sector: Kаrаmаrkоv MSEP – Implement documentation for three modernisation 32.6 ic)] regulations governing projects (Transport and of energy million MSEP environment protection Disposal of Ashes Using New sector and EUR. (Environme from pollution (industrial Technology in TENT B, implementation nt pollution). Overhaul and Reconstruction of environment Protection of Filters in TE Kostolac A2 protection Directorate, and Reducing Oil in Water in measures is Mirоslаv TЕ Kostolac B). A donor the Nikcеvic, contract with the European responsibility of Director; Agency for Reconstruction for polluters – Јаgоs realisation of the above energy Rаicеvic, projects was signed on generators. Assistant 21.03.2005, and realisation of Director for projects was scheduled for the environmen end of 2006. t protection) MSEP – The following laws have been adopted: Environment Protection Law and Law on Integrated Prevention and Control of Pollution, as well as some regulations. Pursuant to the Law on Integrated Prevention and Pollution Control, the Government will pass a Programme of Harmonisation of some branches of the economy with the provisions of this law. The law also prescribes a transition period for the acquisition of licence for existing plants and activities – by 2015 the latest – in accordance with the Porgramme of Harmonisation of some branches of economy with the law. When the Air Protection Law enters force, it will be harmonised with the provisions of LCP Directive. - The following activities are in progress: а) relevant laws (Air Protection Law, Law on Waters) and regulations are 182 being drawn up, b) capacity building of employees of the ministry, local staff and environmental inspectors who will be implementing these regulations and supervise their implementation. - MSEP is implementing regulations in the area of environment protection: issues licences and performs supervision/inspection. 7.5.4 Ensure unbundling with MME MME – Additional MME – Privatisation of energy MME – The a view to restructuring [Electric Restructuring of JP EPS companies is not an explicit restructuring of the and privatisation. Power is necessary (of a smaller requirement of any of the EU energy sector so far Department scale) and JP Srbijagas documents. It is completely left has been in (Аlеksаndаr (of a bigger scale). to the Government, and it is compliance with the Vlајcic), only justifiable when the aim is requirements of the Oil and Gas to protect a wider interest or Treaty Establishing Department when it helps increase the Energy Community. (Slоbоdаn efficiency of the energy sector Complete Sоkоlоvic)] operations as a basic harmonisation with economic activity. the EU requirements, - pursuant to the In 2005, the Government Treaty, should be established two completely finalised by 2010. independent companies from the former vertically integrated public utility JP EPS: the power generation utility (EPS) and the transmission system and market operator (EMS Elektromreza Srbije), which became operational on 1.07.2005. The unbundling of non-core activities that functioned within JP EPS and JP EMS has been completed. In 2005, the Government established three completely independent ocmpanies from the former vertically integrated JP NIS: the public utility for transmission of oil and oil derivatives (JP Transnafta), the public utility for natural gass transmission, warehousing, distribution and trade in (JP Srbijagas) and a joint-stock company for research, production, processing and distribution of oil and oil derivatives and research and production of 183 natural gas (NIS a.d.). Two more companies have been separated out of JP NIS: oil refinery (Rafinerija nafte Beograd) and a producer of lubricants (Fabrika maziva Krusevac), which are already in the process of privatisation. A privatisation advisor has been engaged for NIS a.d. He is soon to prepare tender documentation for the privatisation of this company. A Task Force in charge of preparation of the JP Srbijagas restructuring proposal has been formed. The proposal is being prepared. 7.5.5 Strengthen the MRЕ Considering that the Not all positions envisaged by 8 million RSD [CARDS, As soon as possible, Lack of necessary [Secretariat current number of the current job organisation per year Sweden, but it depends on budgetary funds. administrative of the employees in the ministry are filled. Norway, budgetary funds. structures. Ministry is insufficient to deal with Spain] (Mirјаnа the really large scope of for the Lisоv)] work, administrative energy capacity building in the sector – ministry is necessary. 22.7 million EUR. 7.5.6 Make further progress MRЕ Ensure better connections The first step towards the (It will be European Permanent task. towards the regional [Electric with neighbouring regional electric energy market possible to Investme energy market Power countries through energy was made with the signing of determine after nt Bank, (including through Department interconnections and the Agreement on SEECBT in more detailed Switzerla improved (Аlеksаndаr coordinate the functioning July 2004 and elimination of analysis of nd, Spain interconnectivity). Vlајcic) and of the energy sector in multiplied transit taxes priority energy – 91 Oil and Gas Serbia with the criteria (“pancaking”). The financing of interconnection million Department defined, primarily under new interconnecting long- projects, both EUR. (Slоbоdаn the Energy Community distance power lines is the from the Sоkоlоvic)] Treaty, and then with the responsibility of EMS, whilst national and other documents and the financing of from the analyses stemming from interconnecting gas pipelines international it. is the responsibility of JP aspect.) Srbijagas. The Energy Development Strategy, the Regional (GIS) Study and the Study of Best Investments in the Electric Energy Sector envisage considerable development of transmission pipelines with a view to meeting the needs of increased transmission and transit of electric energy and an appropriate level of supply 184 safety in connection with them. Capacity allocations in case of congestion of interconnecting pipelines are transparent, non- discriminatory and in line with European practices. Considering that developed energy inter-connections are the key precondition for the development of the regional energy market, the Republic of Serbia is committed to improving the interconnections for energy supply with neighbouring countries. This is very important both because it enhances the protection of energy supply and because of general security and relevant economic effects. In April 2006, the 400 kV transmission line Sremska Mitrovica (Serbia) – Ugljevik (BiH) became operational. The building of the 400 kV transmission line Nis (Serbia) – Skopje (FYR Macedonia) should start. Most of it (80%) will be financed from CARDS 2006. The Memorandum of Understanding on the 400 kV transmission line Vrsac (Serbia) – Timisoara (Romania), has been signed between the EMS (Serbian transmission system operator) and Transelectric (Romanian transmission system operator). It is necessary to produce a feasibility study of this project. As regards gas, in addition to the Memorandum of Understanding on the Gas Pipeline Nis (Serbia) – Dupnica (Bulgaria), signed by the responsible ministries of the two countries, and the Memorandum of Understanding on Connecting the Serbian Gas Network with the Republic of Srpska Network (the Sava Gas 185 Pipeline), Serbia has recently unofficially initiated the process of linking Serbian gas pipeline with the Croatian one. Together with other countries (Romania, Croatia, Italy and Slovenia), Serbia is actively involved in the development of the oil pipeline Constanza (Romania) – Trieste (Italy), the so-called Pan-European Oil Pipeline. At this stage, the establishment of the development company for this project is of key importance. Mid-term priorities 7.5.7 Adopt and implement a MME Produce the programme The programme for the Funds for the 281 It depends on the Lack of financial long term strategy for an [General for the realisation of the realisation of the Serbian financing of the million activities envisaged resources. environmentally Energy Serbian Energy Energy Development Strategy implementation EUR3 in programmes. sustainable energy Department Development Strategy until 2015 is being prepared of the policy. (Vlаdаn until 2015 and provide and should be carried out by programme for Kаrаmаrkоv funds to finance their the end of 1st quarter of 2007. the realisation ic)]. implementation. of the Serbian Energy Development Strategy until 2015 can be estimated only after the programmes have been finalised. 7.5.8 Continue to implement MRЕ Implement the Treaty The Treaty Establishing the All requirements (Please refer to regional and [European Establishing the Energy Energy Community entered pertaining to the Priority 7.5.1 as international Integration Community through the force on 1.09.2006 in Serbia. Treaty Establishing well) commitments in this and detailed National Action (Please refer to Priority 7.5.1 the Energy area Internationa Plan for its as well.) Community should in view of establishing a l implementation. be met by the end of competitive regional Cooperation 2017. energy market. Department (Mirоslаv Kukоbаt)].

3 Emergency Power Sector Reconstruction Loan (EPS) (EBRD); Establishment of Telecommunication Network Services (EPS 2) (EBRD); District Heating Rehabilitation (Part 2) (Germany); Improvement of Power Distribution in Southern Serbia (Sweden); Feasibility Study of District Heating in Serbia – 2002 (Sweden); Emergency Power Sector Reconstruction – Institutional Development, EPS, Rehabilitation – Kostolac A, sub-station Sremska Mitrovica (WB); Energy Efficiency Project (WB); spare parts for EPS 2 (Switzerland); Belgrade District Heating (Sweden); Partial Overhaul, Maintenance and Rehabilitation of Thermal Power Plant Nikola Tesla – CARDS 2003 (ЕC).

186 7. 6. Information society and the media Short-term priorities 7.6.1 Ensure that the MCI The amendments to the The deadlines will be electronic [Drаgаnа Telecommunications Act established under the communications sector Curcic, prescribe that the use of Telecommunications is liberalised, that the State various public Development regulatory bodies are Secretary; telecommunication networks, Strategy whose independent and Telecommu i.e. provision of services, can production is in effectively functioning nications be done through the branches progress. and that the necessary Department established in accordance with laws and policies for the (Mоmcilо the Company Act, with the sectors are adopted and Simic and obligation of separate applied. Brаnkо bookkeeping. The Bеric)] Telecommunications Development Policy and Strategy is underway. The Serbian Government passed a Resolution in April 2006 and determined the bases for the production of the development strategy in the area of telecommunications. The tender procedure concerning the sale of one of mobile telecommunications operators Mobi 63 (former Mobtel) is completed. The new owner is the Norwegian operator Telenor. The procedure of licence allocation to the third mobile operator is completed (Austrian Mobilcom). In order to be able to handle the increased scope of international activities in the field of telecommunications and considering the changed constitutional status of Serbia, it is necessary to plan additional budgetary funding. The activities imply important international activities concerning the change of status of Serbia from the aspect of conclusion and implementation of international bilateral, regional and multilateral agreements, membership and obligatory participation in the work of all relevant international telecom organisations (ITU,CEPT, IMSO,ITSO, EUTELSAT, etc.), for which appropriate 187 legislation is necessary. Funds necessary for the realisation of the aforementioned international activities are planned annually and incorporated in the Budget. Mid-term priorities 7.6.2 Transpose and MCI Telecommunications The Republic The deadlines will be implement the new EU [Drаgаnа development strategy and Telecommunications Agency established under the framework for electronic Curcic, policy will establish the (RATEL) was established as Telecommunications communications. State dynamics of amending an independent regulatory Development Secretary; legislation, in line with body, and became operational Strategy whose Telecommu experiences in the on 28.08.2005. Its capacity production is in nications application of the building is in progress. progress. Department Telecommunications Law (Mоmcilо and experiences of Simic and neighbouring countries. Brаnkо Bеric)].

7.6.3 Ensure the MCI Create and implement Regulations are being drawn The deadlines will be independence, sufficient [Drаgаnа training programmes for up. established under the resources and expertise Curcic, employees in regulatory - Telecommunications of the regulatory State agencies; prepare about So far, around 20 regulations Development authorities. Secretary; 50 regulations and and plans have been adopted Strategy whose Telecommu accompanying (- Regulation on the production is in nications documents; continue work numbering and period for progress. Department on administrative capacity which a licence for public (Mоmcilо building to enable mobile telecommunications Simic i production of strategies network is issued and on the Brаnkо and plans. minimal requirements and Bеric)]. minimum amount of a single fee for the issue of the licence; Usage Plan for radio frequency spectrum; Frequency Allocation Plan for analogue FM and TV stations on the territory of Serbia; Numbering Plan for telecommunication networks; Regulation on fees for radio- frequency usage; Regulation on establishing the type of telecommunications services for which the licence is being issued; Regulation on the issue of technical licences – certificates; Regulation on procedures for the issue of licence for public telecommunications networks and public telecommunications services and on register keeping, and others. 188 - The following decisions of the Management Board of the Republic Telecommunications Agency have been adopted: Decision on providing return call services; Decision on Telcom’s agreement to introduce a modern tariff system; Decision on determining the public telecommunications operator of public landline telephone network services with considerable market share.

7.6.4 Start the alignment with MC Amend the Broadcasting The Ministry, in cooperation 2007 Lack of staff. the EU audiovisual [The Media Law. with the Council of Europe and acquis. Department OSCE, will start drawing up (AM Milоs legislation, which will regulate Јаnkоvic)] the field of the media concentration and ownership transparency. - The Ministry financially supported organisation of round-table discussions entitled How to Prevent Hate Talk in the Media, which were organised by the Serbian Independent Journalist Association. The first one was held in Belgrade and the following two are planned to take place in Novi Sad and Nis. - MC plans to organise round- tables about the media concentration. The Ministry has also started the porcedure of joining the European Convention on Transfrontier Television. 7. 7. Financial control Short-term priorities 7.7.1 Develop a public MFIN Amend the existing legal The development of the 2007 internal [Treasury framework in order to strategy for internal financial financial control (Vеsеlin enable the establishment control in the public sector is strategy. DJоrdjеvic, of new institutional and underway. Its aim will be to Assistant organisational structure, establish and develop a Director for through which internal comprehensive system of control)] financial control in the internal financial control in the 189 public sector will improve. public sector, i.e. in all Government institutions. - The project Internal Audit and Internal Financial Control in the Public Sector is being implemented (the second stage financed by EAR, CARDS Programme, lasts from 14 April 2005 to 14 July 2007). - The Supervision Department of the Treasury performs еx ante control of the documentation submitted by direct beneficiaries of budgetary funds. Amendments to the Budget Law envisage the establishment of the Central Unit for Harmonisation of Financial Control and Audit in the Public Sector, and the activities and functions performed within the control, internal revision and budgetary inspection have been re- defined. Mid-term priorities 7.7.2 Develop and implement MFIN Prepare regulations, The Accountancy and Audit the principles of [Treasury translate International Law was adopted on 25 May decentralised (Vеsеlin Accounting Standards 2006, and it took effect on 3 managerial DJоrdjеvic, and publish them in the June 2006. The law governs accountability and Assistant Official Gazette of RS. the application of International functionally independent Director for Accounting Standards and internal audit in control)]. International Standards of accordance with the Financial Reporting (IAS and internationally accepted ISFR). The law prescribes standards and EU best responsibilities of practice. management bodies and managers in charge of accountancy and production of financial reports; a mechanism for issuing and revoking licences of accounting companies and licences for the supervision of accounting companies; the obligation to produce consolidated financial reports of liaised legal persons, as well as the establishment of the Chamber of Licensed Auditors. The Chamber of Licensed Auditors 190 will be a professional body in charge of monitoring and implementation of international regulations concerning audit, organising training and professional improvement of licensed auditors and issuing and revoking certificates and licences of licensed and internal auditors. The law also prescribes the establishment of the National Audit Committee, which will propose to the Government the guidelines and the Action Plan and give suggestions regarding the improvement of laws and regulations in the field of accountancy and audit. Preparatory commission is working on the passage of documents necessary for the establishment of the Chamber of Licenced Auditors. 7.7.3 Strengthen the MFIN The Law on the National Audit operational capacity and Institution Law was passed in functional as well as late 2005, rounding off financial independence legislation in the field of public of the Supreme Audit finances. The Law on the Institution. National Audit Institution prescribes the establishment of a national, autonomous and independent body at the highest level – the National Audit Institution – tasked with planning and auditing as well as proposing amendments to current laws; adopting and publishing audit standards concerning public funds; advising beneficiaries of public funds; determining the curriculum of education and examination for acquiring individual audit titles; keeping a Register of Persons with High Audit Titles, and cooperation with international audit organisations. The Institution will audit income and expenses in line with the regulations dealing with the budget system and public revenue and 191 expenditure; financial reports and other records of the audit subject; regularity of operation; justification for using public funds; the system of financial control of the budgetary system and other institutions and organisations that are subject to audit; other fields envisaged by special laws. This will enable more efficient monitoring of the legality, rationality and regularity of income and expenses of the entities subject to audit. The effect of the implemented audit will reflect in the full compliance with regulations in the field of public revenue and expenditure, and more reasonable spending of funds and savings. Annual audit programmes will cover the Budget of the Republic, compulsory social insurance agencies and a number of other direct and indirect beneficiaries of public funds. The amendments to the 2006 Budget Law envisage funding of the National Audit Institution.

7.7.4 Develop procedures MFIN The documents are being and administrative [Treasury drafted. There is no strategy. capacities in order to (Vеsеlin Capacity building is underway. ensure efficient DJоrdjеvic, (Please refer to Priority 7.7.1 protection of financial Assistant as well.) interests of the EU. Director for control)]

192

8. JUSTICE, FREEDOM AND SECURITY No. Priority Responsible Necessary activity State of implementation Financial aspect Deadline Obstacles institution / Total Republic CARDS department / Budget and other person external funds A B C D E F G H 8. 1. Visas, border control, asylum and migrations Short-term priorities 8.1.1 As a follow-up to the MI [Border Implement the Strategy The documents have been Assessment is Ohrid Regional Police for Integrated Border adopted by the Government underway. Conference on Border Direcotrate Control and carry out and line ministries. The Draft Security and (Dusаn Action Plan. Asylum Law is completed and Management held in May Zlоkаs the Law on Foreigners is 2003, implement short- Head)] underway. With a view to term measures adopted implementing the Strategy for by the Government. Integrated Border Control, the following documents have been drawn up: The MI Strategy for Establishment of Integrated Border Control and Functional Strategy for Border Services (in cooperation with Customs Administration within MFIN and Plant Protection and Veterinary Directorates of MAFWM in common areas, such as: training, infrastructure and equipment, information technologies and telecommunications). The Action Plan for the implementation of the Strategy for Integrated Border Control was adopted by the Government on 01.06.2006. The Action Plan designates responsible agencies, their tasks and deadlines for completing them in order to achieve the objectives defined in the Strategy for Integrated Border Control in Serbia and in order to establish a more efficient system of border management in compliance with the Guidelines of the European Commission for integrated border control of the Western Balkan countries. 8.1.2 Take concrete steps to MI [Border MI – A joint action with the 193 implement best practices Police Hungarian border authorities concerning border Directorate was carried out on 16- police. (Dusаn 25.05.2006 (under the Zlоkаs, auspices of ICMPD). These Head)] activities were in line with the MО Strategy for Integrated Border [General Control. Members of the Staff of the Border Police Directorate Serbian (BPD) took part in the Armed programme for the countries of Forces, Western Balkans (DCAF) with (general a view to establishing an Zdrаvkо efficient border security Pоnоs, system. The programme Head)] included education and training of station commanders, special ADL courses, logistic support to the management of risk analysis, legal reforms, etc. MD – Despite some delays, the MI’s takeover of borders from the military continues. 8.1.3 Proceed without delay MI [Border MI – Continue process of MI – A document has been MI – 6.5 MI – Lack of with the demilitarisation Police demilitarisation of state adopted laying down the million vehicles and of state border control. Directorate borders. systematisation of new border EUR equipment. (Dusаn police stations for securing from Zlоkаs, state border and regional CARDS Head)] centres and the takeover of 2003. MD ativities pertaining to securing Funds [General state borders with Hungary, from Staff of AS, Romania, Bulgaria nad CARDS (general Croatia. The next one is 2005 Zdrаvkо securing the border with and Pоnоs, Bosnia-Herzegovina). This will 2006 are Head)] be followed by the takeover of also the same activities on borders earmark with other neighbouring ed. countries. There is evident lack of infrastructure, vehicles, human resources and equipment. MD – The transfer of border crossings from the military to the police was completed on 26.01.2007.

8.1.4 Start dealing with the MI Negotiations between Serbia issues concerning visas, [Administra and EU regarding a single asylum and migrations. tive agreement on readmission Directorate and visa concessions are in (LJiljаnа progress. Dimitriјеvic, 194 Head) and Border Police Directorate (Dusаn Zlоkаs, Head)] 8.1.5 Adopt the Asylum Law MI а) Pass the asylum law а) The Draft Law is finished; b) a) Lack of and continue signing and [Administra and accompanying So far, 15 agreements on financial proceed with the tive regulations; b) Continue readmission have been resources and conclusion and Directorate conclusion of readmission concluded with 17 countries, professional implementation of (LJiljаnа agreements. 12 of which are EU Member experience. readmission Dimitriјеvic, States; negotiations with FYR agreements. Head) and Macedonia have started. Border Police Directorate (Dusаn Zlоkаs, Head))] 8.1.6 Enhance the capacity MI [Border Build a reception centre In mid-September 2006, with UNHCR and infrastructure of the Police for asylum seekers. the help of the UNHCR – reception centre for Directorate donation, works on outfitting 200,000. asylum seekers and (Dusаn and readying the facilities for 00 EUR refugees. Zlоkаs the reception and Head)] accommodation of asylum seekers (future reception centre for asylum seekers) were finalised. The building is fully technically functional and ready to be open as soon as the Asylum Law is passed. Mid-term priorities 8.1.7 Develop the technical MFIN MFIN – 1. Pass national MFIN – 1. Sectoral strategy for MFIN – It is not MFIN – Will be known MFIN – Primarily infrastructure and human [Customs strategy for integrated integrated border control has possible to when the strategy is of financial resource capacities to Administrat border control; 2. Prepare been proposed; 2. The estimate the adopted. nature. In implement the integrated ion and sign memorandums Memorandum of Cooperation costs. It is addition, better border management (Zоrаn of cooperation with other has been prepared, under obvious though coordination of policy including Vukоtic, border services; 3. which the border control of that substantial the government strengthening the border Assistant Connect information radioactivity, movement of financial authorities is police and the customs Director for systems; 4. Upgrade and toxic material, waste and resources will be necessary. services. IT)]. equip border crossings. substances that deplete the needed. MI [Border ozone layer will be transferred Police from the Environment Direcotrate Protection Directorate to the (Dusаn Customs Administration; 3. A Zlоkаs, pilot project on filming the Head)] traffic on 4 border crossings is underway; 4. Under the TTFCE project of realisation of credit granted by the World Bank for the programme of trade and transport facilitation, 195 the equipment for pilot points has been procured. - The Development Strategy for the Information System of Serbian Customs Administration has been adopted. The Information System of Customs Service (ISCS) operates within the Customs Administration. This is an integrated system which covers all elementary activities of customs service. It is used for the processing of all basic customs documents and there are subsystems with data bases: classification by customs tariff, data on customs evaluation of goods, regulations, information on human resources, risk management, selective inspection of goods, etc. Capacity building in the Customs Administration is an ongoing process. Training courses for the employees are organised, often in cooperation with the European Customs and Fiscal Assistance Office (CAFAO). The TAXUD seminar on the origin of goods was organised, as well as the workshop of the European Commission for TARIC, the TIR seminar, a seminar on subsequent controls (held by a French customs expert). The Administration was awarded a 6-week scholarship from the World Customs Organisation, a 4-week attendance of the French National Customs School. A TAIEX seminar on the bond between the customs and justice was held in September 2006. A number of various training courses for the employees of the Application of Customs Regulations Department have been organised. 8.1.8 Improve cross-border MI [Border Take measures for the The Government has passed Lack of 196 facilitations through new Police implementation of existing a Resolution on opening five necessary border posts. Directorate and conclusion of new BCs for cross-border transport infrastructure (Dusаn agreements on openining between Serbia and FYR and equipment Zlоkаs, new border crossings Macedonia: Mitrovac-Lojane, for the Head)] (BCs). Strezovce-Sopot, Slavujevac- functioning of Petrovac, Trgoviste-Ogut and new BCs. Goles-Golema Crcorija. Services are yet to be established on these border- crossings. An inter-sectoral Task Force tasked with analysing current situation and determining the priorities regarding the opening of new border crossings on the border with FYR Macedonia is being established. BC Presevo is undergoing reconstruction. - Reconstruction of BC Horgos is finished and the crossing is now operational. - BC Batrovci is undergoing reconstruction, which is nearing the end. 8.1.9 Enhance the cooperation MI [Border Adopt Strategy for The Government adopted the 1st half of 2007 Lack of between the government Police Combating Human Strategy for Fighting Human professional and agencies responsible for Directorate Trafficking (2006-2009); Trafficking in early December administrative fighting human (Dusаn strengthen and build 2006. Capacity building is staff in charge of trafficking. Zlоkаs, administrative capacities, underway. coordination of Head)] especially through the relevant entities Council for Combating (translators, Human Trafficking and typists, Republic Team for assistants, Combating Human managers, etc.) Trafficking, whose members are representatives of relevant ministries. 8. 2. Money laundry Short-term priorities 8.2.1 Ensure efficient MFIN- 1) Adopt the law on 1) In December 2005, the new Around 88 Around 8.8 Not End of 2007 Lack of financial implementation of the [Internation prevention of money Anti-Money Laundry Law was million RSD million RSD certain. resources and anti-money laundering al and laundry; 2) Adopt passed (Official Gazette of appropriate legislation and Internal regulations; 3) Build RS, No. 107/05). The law is office space. strengthen the financial Cooperatio administrative capacities; harmonised with international intelligence units. n Unit 4) Develop IT system; 5) standards in the field of (Tаtјаnа Adopt the law on prevention of money laundry. DJurаsinоv prevention of financing of Under this law, the Directorate ic, Head)] terrorism; 6) Adopt of Money Laundry Prevention national strategy for the has acquired a new fighting money laundry (administrative) status within 197 and financing of terrorism. the Ministry of Finance; 2) Regulation came into force on 19.06.2006; 3) Capacity building is in progress; a new Director has been appointed and five new members of staff employed, so that the total number of employees in the Directorate is 24; 4) Being carried out under projects of international institutions. Under the IT project of strategy and support for modernisation of MFIN, implemented by EAR, the Directorate was approved a project of development of information system for the management of transactions and procurement of hardware, which will enable the Directorate to add to and upgrade its technical capacity necessary for quality and timely application of the Anti- Money Laundry Law. The USA have granted a donation for the development of software and procurement of hardware with a view to strengthening technical capacity of the Directorate; 5) The Draft Law on Prevention of Financing of Terrorism is finished; its adoption is expected next year; 6) The National Strategy is underway. It will define the role of all government bodies in the fight against money laundry and financing of terrorism, as well as their mutual cooperation; an important part of the strategy will be the training strategy, which will contain the assessment of the necessity of the training (under the Council of Europe PACO project); in the first stage, future trainers will be trained and then the employees of government bodies involved in the fight against money laundry and financing of terrorism [the FIU (Financial Investigation Unit), 198 police, prosecutors’ offices, courts of law)]. (This section of the Table also contains answers to the comment of the European Commission of July 2006, “Measures defined under the Action Plan are very general, e.g. ‘capacity building in administration’ (What capacity? Which part of administration?). Adoption of a comprehensive, medium term national strategy should be encouraged.”) 8. 3. Drugs Short-term priorities 8.3.1 Increase the capacity to MH [Health MH - а) Produce new MH – а) There is a Draft Law MH – Funds MH – MH – According to MH – fight against drug Insurance draft law on production, on Production, Trade in and should be Project the MH work plan, the Inadequate trafficking and develop and Public trade and distruction of Distruction of Opiates and earmarked in The national anti-drug institutional and start implementing a Health opiates and psychotropic Psychotropic Substances; b) the projection Assessm strategy for 2007 capacity. national drugs strategy Financing substances, including There is no strategy (policy); a of the Budget ent of should be passed. in line with the EU anti- Departmen establishing requirements commission to work on the for 2007 for Drug MI – 2007 drugs t for designating production of the Strategy for control of Abuse in strategy. (AM laboratories for Control of Narcotics has been opiates and Serbia Vаsiliје characterisation of opiates formed, but as it did not get a precursors, as (August Аntic) and psychotropic clear plan from the well as for the 2005- and substances; b) Produce Government, MH, through the anti-drugs May Medicines regulations accompanying Serbian European Integration programme (in 2006), and Law on Precursors Office, will send the initiative to line with the financed Medicinal concerning production, the Government; c) Absence realisation of from Means trade in and distruction of of administrative capacity; job the annual CARDS Inspectorat precursors and organisation should change; budgeting e substances that are not Republic Bureau will be plan). (Drаgаnа on the list of precursors, formed when the Law on Kоsic)]. including establishing Production, Trade in and MI requirements for Distruction of Opiates and [Criminal designating laboratories Psychotropic Substances is Police for characterisation of adopted; d) This was done in Directorate opiates and psychotropic 2006. (Rоdоljub substances that are not - National Programme for Milоvic, on the list of precursors; Prevention of Drug Abuse; Head)] c) pass a strategy (policy) public debates were organised in the area of control of in June in four Serbian cities narcotics; d) build (Novi Sad, Kragujevac, Nis, administrative capacity Belgrade), in which (establish Opiates and representatives of local Precursors Division, form communities, schools, welfare a Republic Bureau for institutions, health care Control of Drugs or a institutions, police, judiciary, similar government body); non-government organisations suprevise continuous etc. took part and expressed education of professional their opinions on the subject. staff about opiates, The work of the Commission 199 psychotropic substances for the Prevention of and precursors; supervise Psychotropic Substance laboratories handling Abuse was presented on the opiates, psychotropic website of the Ministry of substances and Health. Also available on the precursors; e) Produce a website are: the text of the database of opiates, National Programme for psychotropic substances Prevention of Drug Abuse, the and precursors and presentation of activities guidebooks thereof concerning the International intended for professionals Day against Drug Abuse and and government bodies, Illicit Drug Trafficking with the in order to familiarise slogan “Fighting Drugs – them with the latest Mission Possible” and the e- achievements in the mail address to post production of synthetic comments and suggestions. drugs and prevention of The 2007 Budget (the Annual abuse in legal chemical Operational Plan of the and pharmaceutical Ministry of Health is underway) companies. will earmark funds for priority MI – Pass relevant activities and implementation strategy. of the National Programme for Prevention of Drug Abuse. The project entitled The Assessment of Drug Abuse in Serbia, financed by the EU, is finished, with the obligation to perform clinical research using the same methodology (ЕSPAD). The research project entitled The Prevalence of Drug Users in the Republic of Serbia, which is supported by the Commission for the Prevention of Psychotropic Substance Abuse, has started. The Project is financed by Global Fund and implemented by the Institute of Economy. The following activities are planned: 1) a survey of 11,000 citizens from 15-55 years of age; 2) the analysis of routinely collected information of MI and public health care services; 3) the results should come out in November – the estimated number of drug users in Serbia. The questionnaire used is the Questionnaire of the European Monitoring Centre for Drugs and Drug Addiction in Lisbon (EMCDD), which is going to be 200 very important when making comparisons with the EU countries and organisation of activities for the fight against drugs. MI – There is no strategy.

8. 4. Police Short-term priorities 8.4.1 Implement agreed MP Continue cooperation Memorandum of Cooperation No expenses. institutional framework for [Justice stemming from the with the Montenegrin Ministry cooperation in the area of Departmen Memorandum of of Justice was signed in 2004. judiciary between the t Cooperation with the Diplomatic relations have been republics, especially (AM Zivkа Montenegrin Ministry of established between Serbia through full Spаsic)] Justice. and Montenegro. implementation of Consultations between Memoranda of representatives of line Understanding signed by ministries of Serbia and of ministers for justice and Montenegro regarding the interior. consular and other matters pertaining to bilateral cooperation are in progress.

8.4.2 Adopt the Police Law in MI The Police Law has been order to ensure [Secretariat adopted, and in line with the professionalism and (Milоrаd new legal solutions, the overall accountability. Tоdоrоvic reform of MI is underway. Secretary)] Mid-term priorities 8.4.3 Continue restructuring, MI – The new Police Law is in ensure accountability. Minister force. The Ministry has undergone the process of restructuring. In accordance with the law, the Department of Police Internal Control was established. Its task is to supervise the work of police. 8.4.4 Reform police training. MI а) Support work of а) The Police Law and the а) Estimated а) Januar 2007; b) Financial [Education Directorate of Vocational Law on Higher Education have funds necessary Beginning of 2007 resources and Departmen Training, Professional been adopted. Development for the realisation absence of office t (Drаgic Improvement, Further Strategy for Police Training of the Project of space (c). Јоsifоvic, Education and Science and Education was approved Structural Head)] through provision of by the Minister. A Task Force, Cabling are equipment and consisting of four teams, has around 1.5 infrastructure; been formed. Their task is to million RSD. It is b) Transform the carry out and monitor the expected that the Secondary School of realisation of the Strategy. The project will be Internal Affairs in strategic plan is underway and entirely financed Sremska Kamenica into so is the operationalisation of from the Budget. the Centre for Elementary the Development Strategy for b) This project is Police Training; c) Police Training and Education, worth 2.6 million Integrate Community which will refer to the activities EUR. With the 201 College of Internal Affairs of the Directorate. The first aim to provide (CCIA) and the Police stage envisages creation of the funds, on 06. Academy into institution of computer network of existing 06.2006 a donor higher education for offices of the Directorate and conference was vocational and academic their connection in the MI held. It was studies – the Criminal network. In cooperation with organised by the Police Academy; d) the IT Directorate, a terms of OSCE Mission to Establish a network of reference for structural cabling Serbia and MI. police education centres. have been produced. The On that realisation of the Project is occasion, the underway and it can be used Norwegian for the needs of Criminal Government Police Academy, as the announced a Directorate will move out from donation of the premises of the Criminal 750,000-800,000 Police Academy (CCIA) to EUR, and a part another location (SIV 2 of funds will be building). provided by the b) In cooperation with the Government OSCE Mission, transformation Budget, as 1.5 of the Secondary School of million EUR Internal Affairs in Sremska provides the Kamenica is underway. realisation of the Teacher training is an ongoing project in stages. activity. At the final stage of production is the Curriculum of elementary police training. Mentor training is also underway. The project entitled The Establishment of the Centre for Elementary Police Training in Sremska Kamenica was approved in the OSCE Head Office in Vienna in June 2006. No new students have been enrolled in the Secondary School of Internal Affairs in Sremska Mitrovica in the academic year 2006/07, and the last generation graduates in 2009. c) By the Government’s Resolution, in July 2006 the Community College of Internal Affairs and the Police Academy were integrated in the Criminal Police Academy – an institution of higher education for vocational and academic studies. The first generation (120 students) enrolled in the academic year 2006/07, the problem of non- teaching staff has been resolved in cooperation with 202 MI. Yet, the problem of provision of adequate facilities and infrastructure in the new building is still outstanding (e.g. the barracks in Zemun, opposite the CCIA). d) Within the Task Force tasked with monitoring and realisation of goals projected by the Strategy, one team is in charge of production of the project of setting up a network of centres for police education. The first draft of the project is finished, the feedback from higher instances is expected.

8.4.5 Ensure cooperation MI – Representatives of the between law enforcement Minister Ministry of the Interior have agencies. established regular cooperation with the Security and Intelliegence Agency through ad hoc meetings. 8. 5. Fight against organised crime Short-term priorities 8.5.1 Establish efficient MI – institutional mechanisms Minister for inter-agency cooperation and formalise their cooperation. 8.5.2 Adopt legislation and MJ MJ – Pass the law on In cooperation with the OSCE MJ – Financial MJ – 2nd quarter of develop the capacity to [Normative seizure of assets obtained Office in Belgrade, MJ has aspect cannot be 2007 seize assets. Affairs and through criminal activity. drawn up a Draft Law on estimated at this Internation MI – Pass the law on Expropriated Property stage of law al expropriation of property; Management. The adoption of production. Cooperatio amend the Criminal the Draft Law on Seizure of n Procedure Code (CPC); Property Obtained through Departmen form a body wihtin MJ for Criminal Activity and the Draft t, (AM the management of Law on Data Protection is Аlеksаndrа expropriated property. pending. MI – CPC has been Pоpоvic)]. amended, and the application MI of the new law starts in June [Secretariat 2007. (Milоrаd Tоdоrоvic Secretary)] .

8.5.3 Reinforce criminal MI Pass relevant strategy There is a draft strategy. This SIDА intelligence service. [Criminal (policy). activity will be financed by (Swedish Police SIDA (Swedish International Internati Directorate Development Agency), which onal 203 (Rоdоljub has provided 1.3 million SEK. Develop Milоvic, ment Head)] Agency) has provided 1.3 million SEK. 8.5.4 Adopt legislation on the MI Pass relevant regulation. The Draft Law on Personal 2007 protection of personal (Governme Data Protection is finished. data and take the nt Task The adoption of this law is a necessary steps to Force for precondition for the production prepare for the the of the Draft Law on the conclusion of a implement Confidentiality of Information. cooperation agreement ation of (Adoption of these two laws is with Europol. Brussels a precondition for the Action conclusion of the cooperation Plan) agreement with Europol.) 8.5.5 Intensify the fight against MI – Pass relevant law or The Law Ratifying the UN human trafficking, [Border regulation. Convention against including provision of Police Transnational Organised appropriate help for and Directorate Crime and its Protocols was protection of victims. (Dusаn adopted in June 2001. Serbia Zlоkаs, undertook the obligation to Head)] take appropriate legal and other measures in accordance with international standards envisaged by the Convention and its Protocols. In 2001, Serbia intensified its efforts in combatting human trafficking by creating a national mechanism to coordinate its activities. In late 2001, the Minister for the Interior and the Deputy Prime Minister decided to appoint Mr Dusan Zlokas (the then Deputy Head in the Border Police Directorate) as a national coordinator of combatting human trafficking. In June 2002, a republic team for combatting human trafficking was formed, comprising representatives of all relevant ministries, NGOs and international organisations. In October 2004, the Government passed a Resolution on constituting a Council for Combatting Human Trafficking. - The Criminal Procedure Code, 204 which took effect on 01.01.2006, defines this matter in Articles 388 (sanctioning the criminal act of human trafficking) and 350 (santioning the criminal act of illegal crossing of border and smuggling humans). There are also related provisions in the Law on the Witness Protection Programme, Law on Organisation and Responsibilities of Government Authorities in Combatting Organised Crime, Law on Movement and Residence of Foreigners, Law on Public Peace and Order, and the Infringement Law. - As regards provision of adequate help and protection for the victims, as a result of a joint project of MLESP and OSCE Mission, in March 2004 a service in charge of coordination of protection of victims of human trafficking was formed. Having regard of international and regional standards of protection of victims of human trafficking, the Minister for the Interior passed the Instruction on conditions for granting humanitarian residence in 2004. At the initiative of the International Organisation for Migration (IOM), which addressed MFIN about the abolishment of the fee charged for issuing a temporary residence permit to the victims of human trafficking, SNP has adopted the Law Amending the Republic Tax Law, exempting foreign nationals, victims of human trafficking, from the obligation to pay this fee. - At the initiative of the National Coordinator for Combating Human Trafficking, SNP has adopted the Law on Medical 205 Protection, which contains a provision under which the victims of human trafficking are exempt from paying medical services. 8.5.6 Increase the efficiency of MI MI – Sign cooperation MI – The new Police Law for MD – 2 million MD – 1st half of 2007 international cooperation [Internation agreements; appoint the first time envisages RSD for the and implementation of al liaison officers primarily in participation of MI staff in activities the relevant international Cooperatio the neighbouring peace missions, as well as the abroad. conventions on n and countries and in the institution of liaison officer. terrorism. European Western European Regulations concerning Integration countries; organise sending officers to peace Bureau education and training of missions are being drawn up. within the MI staff involved in these The training goes according to Minister’s activities. the plan and programme of Cabinet MD – It is necessary to: а) international organisations (Drаzеn adopt the law on (UN, OSCE, etc.). Mаrаvic, intelligence and security MD – а) Draft Law on Head)] services; b) define Intelligence and Security MD priorities of bilateral Services is being prepared; b) [Military cooperation between the Cooperation with agencies of Security Military Security Agency 10 countries has been Agency(Sv and foreign agency; c) established; c) As the integral еtkо improve expert and other part of the Law on Foreign Kоvаc) and contacts between the Trade in Armaments, Military Military Military Security Agency Equipment and Double Intelligence and foreign agencies in Purpose Products, the former Agency the country and abroad. SCG Council of Ministers (colonel adopted national control lists Zdrаvkо of NVО and double purpose Јеlisаvcic)] products. Both lists completely comply with the lists adopted by the EU and codes of conduct of the EU Member States. Although Serbia is not a party to any control regimes [Wasenar Arrangement (WA), Nuclear Suppliers Group (NSG), Australian Group (AG), Control Regime of Rocket Technologies), it observes them unilaterally, as lists of these control regimes are incorporated in Serbian national lists. At the initiative of MD, the Serbian Government has passed a Resolution on sending Serbian soldiers to peace missions in Afganistan within Beligium and Norwegian corpses and sent it to SNP for adoption. Serbia has been granted observer status in the security initiative SEDM. Draft Law on 206 the implementation of Convention prohibiting development, production, warehousing and usage of weapons (Chemical Weapons Convention) is underway.

8.5.7 Enhance cooperation and BIA BIA – 1) Fight against BIA – 1) Fight against BIA – BIA – 3rd quarter of BIA – Absence information exchange (Drаgаn terrorism: а) pass terrorism: а) the law is CARDS 2007 of precise between all branches of Zuјоvic, legislation in the area of being drawn up; b) funds division of security service, as well Director’s fighitng terrorism; b) pass there is no strategy were not responsibilities as cooperation with other Cabinet). relevant strategy (policy); (policy); c) existing used, but between the countries. MD c) build administrative administrative capacity there is a security services [Military capacity (form expert should be built up on to possibilit and lack of Security teams); g) other; 2) Fight comply with the future y for it. adequate Agency against organised crime: legislation; d) it is cooperation (Svеtkо а) law on organisation necessary to pass the agreements. Kоvаc) and and responsibilities of national security Military government authorities in strategy. 2) Fight Intelligence combatting organised against organised Agency crime; b) pass relevant crime: а) adopted by (colonel strategy (policy); c) build the Government; b) Zdrаvkо administrative capacity there is a draft Јеlisаvcic)] (form expert teams). document; c) it is necessary to build up on the existing administrative capacity. MD – As in 8.5.6 8.5.8 Prevent financing and BIA BIA – Pass the law to BIA – 1) Draft Law on BIA – BIA – Absence preparation of acts of (Gоrаn prevent financing of acts Prevention of Financing of CARDS of adeqate legal terrorism. Kuzmаnоvi of terrorism. Acts of Terrorism is funds act to regulate c, completed. Strengthening were not the access of Director’s existing capacity is underway. used, but law enforcement Cabinet). - there is a to the databases MD Draft strategy (policy) is possibilit of the Ministry of [Military completed. y for it. Finance. Security - Agency MFIN – The Draft Law on (Svеtkо Prevention of Financing of Kоvаc) and Acts of Terrorism has been Military produced under the project of Intelligence the Council of Europe – Agency PACO, aimed at capacity (pukоvnik building in combating financial Zdrаvkо crime in Serbia. Under this Јеlisаvcic)] project, the Directorate has MFIN been granted a donation for the procurement of hardware and software. MFIN – As in 8.5.6.

207 Mid-term priorities 8.5.9 Develop an efficient MI MJ – Pass regulations. MJ – The Law on Witness Insufficient system of witness [Protection MI – Pass regulations. Protection Programme has financial protection which Division been adopted. Implementing resources. inorporates regional (Drаgаn regulations are being drafted. elements. Јоvаnоvi There is a draft national c, Head)] strategy for combatting MJ organised crime, whose one part covers the area of witness protection. MJ has passed a Regulation concerning implementation of Witness Protection Programme in prisons and detention facilities (Official Gazette of RS, No.19/06 of 07.03.2006). The Regulation lays down the method of application of the Protection Programme to witnesses who have been detained or serving prison sentences. The Government has passed a Regulation on special fees for the members and deputy members of the Commission for the Implementation of Witness Protection Programme (Official Gazette of RS, No. 63/06 of 21.07.2006). Implementation of the Law on Witness Protection Programme is the responsibility of MI. MI – The Law on the Witness Protection Programme, which took effect on 01.01.2006, created institutional conditions for the work of the Protection Division, as a specialised unit within MI tasked with the implementation of this law. For the first time, the work and procedures for successful witness protection in Serbia have been regulated by the law. Preparations for signing the agreements with partner units in Croatia and FYR Macedonia are underway. The Witness Protection Programme is implemented by the Protection Division and the Commission for 208 the implementation of the programme. The Protection Division has established excellent cooperation with its partner units. Cooperation agreements and agreements on relocation of protected witnesses have been concluded with two neighbouring countries. The Division has very high work standards.

8.5.10 Intensify the fight against MFIN MFIN – 1) Adopt law on MFIN - 1) Adopted; 2) In the MFIN – 1) , 2) MFIN – 1), 2) MFIN – MFIN – 2) January MFIN – 4) Lack economic and financial [Snеzаnа foreign eschange drafting stage; 3) Underway; and 3) Cost and 3) A For 2007; of financial crime (including DJuric operations; 4) Underway and financed estimate is not budget line for Norwegi 3) End of 2007; 4) resources for money-laundering and Rаdulоvic 2) Pass regulations from domestic resources; have possible. this purpose an 2007/2008. final realisation counterfeiting of (separate (some of them have been applied for foreign funds 4) Software for has not been donation MI – 2006 – 2007 of the project of currencies), fraud and organisatio passed by NBS); 3) Build (software for indirect control of indirect control of envisaged. of foreign corruption as well as nal unit is administrative capacity; 4) foreign exchange operations is foreign exchange 4) Software 448,570 exchange improve the related not Develop IT system. finished, financed from operations is for indirect EUR. documentary legislation. envisaged) MI – Pass law or domestic resources; MFIN finished (Stage control of For IPA control. Note: a ] regulation; pass relevant applied for the following 1). It was foreign donation budget line for MI strategy. donations: Norwegian financed from exchange the this purpose has [Directorat donation for the project domestic operations is estimate not been e of Fight Development of Software for resources. finished will be envisaged. against Monitoring and Control of (Stage 1). It done in Organsed Foreign Exchange and was financed 2007. Crime Foreign Trade Operations; IPA from domestic (Mlаdеn donation for a joint project of resources. Spаsic, Foreign Exchange Head)] Inspectorate and MIER Capacity Building in Public Administration for Efficient Monitoring and Control of Foreign Exchange and Foreign Trade Operations.

- SNP adopted the Law on Foreign Exchange Operations on 14 July 2006 (Official Gazette of RS, No. 62/06). Under this law, the Foreign Exchange Inspectorate got administrative status within MFIN. The Foreign Exchange Inspectorate is in charge of overseeing foreign exchange operations of residents and non-residents. The envisaged total number of staff is 100. The law prescribes the following: non-residents are not allowed to collect, pay or 209 issue payment or transfer orders based on fictitious contracts, or illegal documents; capital operations are liberalised and they include: operations with long- term securities, operations with financial derivatives, operations with investment and voluntary pension funds, and operations based on insurance, while investment in short-term securities remains limited for non-resident individuals in the Republic and Serbian citizens abroad, with the exception of the National Bank of Serbia and banks; payments and transfers of capital based on direct investment of resident legal persons, entrepreneurs and natural persons abroad are done freely; payments for real estate of residents abroad and of non-residents in the Republic are done freely pursuant to the law regulating proprietary rights; a branch of a resident foreign legal person can transfer funds from the account abroad upon meeting its tax obligations; transfers from foreign exchange and RSD savings accounts of non- residents are unrestricted; Foreign Exchange Inspectorate will be formed; collecting, paying or issuing payment orders based on fictitious contracts or illegal documents of over 100,000 EUR will be considered a crime. MI – A Task Force for the implementation of international legislation concerning money laundry and forgery has been formed; anti-corruption strategy is finished and it has been adopted by the responsible institution. MI takes part in the Council of Europe CARPO project 210 (Regional Police Project financed from CARDS), whose focus is fight against corruption. 8.5.11 Facilitate the placement MI [ MI and Bureau regularly keep of liaison officers, Internation in touch with the police (where seconded by EU al they exist) or military liaison member states in the Cooperatio officers of the EU countries relevant state bodies n and who are accredited with the involved in the fight European embassies of their native against organised crime. Integration countries in Belgrade. Bureau, (Drаzеn Mаrаvic, Head)] 8.5.12 Implement the Palermo MI Master special The Convention is being 2 million Convention on [Criminal investigative technique applied. EUR Transnational Organised Police measures. from Crime. Directorate CARDS (Rоdоljub and for Milоvic, 2003 Head)] and 4 million EUR for 2005 8.5.13 Reinforce the capacities MI of the Ministry of the Interior (especially the Organised Crime Directorate). 8.5.14 Develop procedures and MIA 1) Pass data protection 1) The law is being drawn up; CARDS 4th quarter of 2007 Absence of the capacity to share (Drаgаn law; 1а) Pass the law on 1a) Does not exist; 2) Existing funds database intelligence between Cvеtојеvic, database network and its capacity is being developed. were not network at teh government bodies. Director’s usage; 2) Build used but level of state Cabinet) administrative capacity. they institutions and could be authorities. used.

211 ANNEX 1

BREAKDOWN OF ADMINISTRATIVE REGULATIONS to be passed pursuant to the Law on Environment Protection

Regulations whose technical components fall within the responsibilities of the Bureau for Protection from Pollution and the Environment Protection Agency 1 Monitoring programme Article 69 Paragraph 3

2 Criteria for determining the number and distribution of measurement points, networks of Article 70 Paragraph 2 measurement points, measurement scope and frequency, classification of monitored occurrences, work methodology and environment pollution indicators and their monitoring; deadlines and procedure for data submission

3 Types of emission and other occurrences monitored by polluters; measurement Article 72 Paragraph 2 methods; sampling; record-keeping procedure; deadlines for data submission and data keeping

4 The content and management of the information system; methodology, structure, Article 74 Paragraph 5 common bases, categories and levels of data collecting; regular dissemination of required information to the public

5. Further requirements to be met by the authorised monitoring agency Article 71 Paragraph 2

6. Decision on designating authorised agencies to perform monitoring Article 71 Paragraph 3

7 Method of producing an integrated cadastre of polluters as well as types, ways and Article 75 Paragraph 3 classification of polluters and deadlines for data submission

212

Regulations whose technical base is being prepared

1. Documentation submitted with the application for a licence to import/ export Article 28 Paragraph 5 endangered/protected species of wild flora/fauna

2. Methods of accident risk assessment Article 38 Paragraph 2

3 Declaring the environment threatened Article 43 Paragraph 1

4 Declaring the environment endangered Article 43 Paragraph 2

5 Criteria for declaring the environment threatened and endangered; criteria for Article 43 Paragraph 3 determining priorities for rehabilitation and remedying

6 List of ozone-depleting substances whose import/export is prohibited; list of Article 56 Paragraph 7 substances and products containing ozone-depleting substances whose import/export is permitted; list of substances and products containing ozone- depleting substances that are used for special purposes

7. Documentation submitted with the application for a licence to import/export Article 56 Paragraph 9 substances that deplete the ozone layer

8 Requirements and procedure for earning the right to use environmental symbols; Article 53 Paragraph 4 elements, appearance and method of using environmental symbols for products, processes and services

9. Documentation submitted with the application for a licence to Article 57 Paragraph 4 import/export/transit waste

10 Plan of protection from cross-border effects of industrial accidents Article 61 Paragraph 2

11 The required protection plan concerning industrial accidents and the required Article 61 Paragraph 4 reports on safety; method of keeping records of types and quantities of hazardous substances for production, use, transport, processing, storing and disposal; deadlines for and a method of data submission; concentration levels of hazardous substances in the environment that the public must be informed about; categorisation criteria for hazardous substances; criteria for determining the magnitude of accident in order to declare that the environment is threatened or endangered

Regulations that have not been prepared but whose technical components fall within the area of responsibility of the Bureau of Pollution Control and the Strategic Planning Bureau

No. Regulation Legal base 1. Pollutant emission value limits and pollutant imission values in the environment Article 39 Paragraph 3

2. EMAS registration fee Article 45 Paragraph 8

3. Type of financial or other guarantees for reimbursement of costs, provision of Article 105 Paragraph 2 funds and duration of guarantee provided by polluters

4. Method of determining priorities from the aspect of environment rehabilitation Article 16 Paragraph 4 213 No. Regulation Legal base 5. Criteria for introduction of special measures in the event of immediate danger or Article 42 Paragraph 2 crossing the prescribed pollution value limits and procedure for alerting the public

6. EMAS registration form Article 45 Paragraph 6

7. Setting up and implementation of the environmental management system; Article 50 required reporting on the impact of activities, products and services on the environment; preparation of the Environmental Statement to join EMAS; public access to information on EMAS; evaluation of EMAS implementation by legal or natural person and required evaluation report; the content, appearance and use of EMAS symbol

8. Cost charge for seeking information about environment protection Article 79 Paragraph 4

214 BREAKDOWN OF ADMINISTRATIVE REGULATIONS TO BE PASSED pursuant to the Waste Management Law

Regulations to be passed by the Government

Regulation Legal base 1. Action Plan for Hazardous Waste Management Article 37 Paragraph 8

2. Regulation on: Article 41 Paragraph 8 1) the types of waste for thermal treatment; location requirements; technical and technological requirements for planning, building, equipping and work of plants for thermal treatment of waste, treatment of residue after waste incineration, and other important issues concerning work of plants for thermal treatment of waste; 2) emission value limits, control and monitoring of pollutant emissions from thermal treatment plants

3. Regulation on: Article 42 Paragraph 7 1) the requirements and criteria for all classes of waste dumps with regard to site location, planning and equipment; prevention of subsurface water pollution from the waste dump; land and water protection; gas and odour control; dangers, stability and physical security of waste dump; 2) the types of waste that must not be disposed of in waste dumps; quantities of biodegradable waste that can be disposed; requirements, criteria and procedures for (dis-) approving waste disposal in waste dumps; waste dump operation and shut down procedures; 3) the required monitoring of waste dumps, and subsequent maintenance after the dump has been shut down

4. Selecting waste for recycling Article 43 Paragraph 8 5. Regulation on the required labelling of all types of batteries and hazardous substances in Article 47 Paragraph 9 all types of batteries, battery waste management, and the management of appliances/machines with built-in batteries

6. Regulation on required used oil management Article 48 Paragraph 10

7. Regulation on required rubber waste management Article 49 Paragraph 5

8. Regulation on the list of electrical and electronic products and required management of Article 50 Paragraph 13 electric and electronic product waste

9. Regulation on required management of used fluorescent tubes containing mercury Article 51 Paragraph 5

10. Regulation on: Article 52 Paragraph 11 1) the content and appearance of symbols and required labelling of appliances containing PCB and rooms or plants in which they are stored, as well as of decontaminated appliances; 1) the disposal procedure for PCB or PCB waste, decontamination of appliances containing 215 PCB and methods of examining the content of PCB; 2) the required declaring of data and registration of appliances in use containing PCB and PCB waste; 3) the content of application for a licence to decontaminate appliances containing PCB

11. Regulation on the list of POPs substances, POPs waste management procedure and Article 53 Paragraph 5 concentration value limits of POPs substances with regard to disposal or reuse of waste containing or being contaminated by POPs substances.

12. Regulation on required management of waste vehicles Article 55 Paragraph 9

Regulations to be passed by the Minister

Regulation Legal base 1. Regulation on waste classification (waste catalogue; general waste categories; list of Article 8 Paragraph 4 hazardous waste by origin and composition; waste components rendering the waste hazardous and concentration value limits of hazardous waste components determining the type of waste; lists of activities pertaining to disposal and reuse of waste; required reporting on waste analyses)

2. Resolution on designating authorised agencies for waste analysis. Article 24 Paragraph 2

3. Regulation on minimal technical and environment protection requirements to be met by Article 35 Paragraph 4 transfer stations, requirements to be met by site locations, maximum period of time during which certain types of waste may be stored in transfer stations

4. Regulation on requirements and criteria for designating location, on technical and Article 36 Paragraph 3 technological requirements for planning, building and operation of plants for storing waste

5. Regulation on requirements and procedures for collecting, transport, storing and Article 38 Paragraph 5 treatment of waste that is used as secondary raw materials or fuel

6. Regulation on requirements and criteria for designating location, on technical and Article 39 Paragraph 3 technological requirements for planning, building and operation of plants for physical and chemical treatment of waste

7. Regulation on requirements and criteria for designating location, on technical and Article 40 Paragraph 5 technological requirements for planning, building and operation of plants for biological treatment of waste

8. Regulation on procedures for waste sampling before its incineration Article 41 Paragraph 5

9. Regulation on procedures for storing, packaging and labelling of hazardous waste Article 44 Paragraph 8

10. Regulation on requirements, programme and procedure for taking vocational exam in Article 44 Paragraph 11 the area of waste management 216 11. Regulation concerning the Waste Movement Document Form and the instructions on Article 45 Paragraph 6 how to fill it in

12. Regulation concerning the Hazardous Waste Movement Document Form and the Article 46 Paragraph 8 instructions on how to fill it in

13. Regulation on the packaging procedure, criteria, requirements and the method of final Article 54 Paragraph 3 disposal of waste containing asbestos and on other measures to prevent asbestos fibres and dust from spreading

14. Regulation on the required waste management plan concerning health care facilities Article 56 Paragraph 4

15. Regulation on the waste management procedure concerning health care facilities Article 56 Paragraph 6

16. Regulation concerning the required certificate of exemption from the obligation to obtain Article 60 Paragraph 4 a licence

17. Regulation concerning the application form for a licence to operate waste management Article 61 Paragraph 5 plants

18. Regulation on the content and appearance of the licence Article 63 Paragraph 5

19. Regulation laying down: Article 71 Paragraph 8 1) the list of hazardous waste whose import is prohibited; 2) the list of hazardous waste whose export and transit are permitted; 3) the list of waste whose import/export/transit is permitted; 4) the list of non-hazardous waste for which a licence and accompanying documentation for cross-border movement is not issued; 5) the content, appearance and instructions on how to fill in notifications on cross-border movement of waste; 6) the content, appearance and instructions on how to fill in the documents on cross-border movement of waste.

20. Regulation concerning required daily records and reporting on waste with instructions on Article 74 Paragraph 6 how to fill it in

217 BREAKDOWN OF ADMINISTRATIVE REGULATIONS to be passed pursuant to the Law on Protection from Non-Ionizing Radiation

Regulations to be passed by the Minister Regulation Legal base 1. Regulation on requirements to be met by a company, business or any Article 5 Paragraph 5 other legal person performing activities pertaining to systematic examination of non-ionizing radiation levels in the environment, and procedures for systematic testing of non-ionizing radiation levels

2. Regulation on required form of reporting on the results of tests of the Article 5 Paragraph 7 levels of non-ionizing radiation

3. Regulation on requirements and use of sources of non-ionizing radiation of Article 6 Paragraph 5 special interest (exposure limits, sources of non-ionizing radiation of special interest and ways of its examination)

4. Regulation on keeping record of sources of non-ionizing radiation of Article 8 special interest

5. Regulation on types of sources of non-ionizing radiation to be examined Article 9 Paragraph 5

6. Regulation on requirements to be met by persons performing Article 10 Paragraph 3 examinations of non-ionizing radiation levels from the sources of non-ionizing radiation of special environmental interest

7. Regulation on the production of official IDs and the appearance and Article 16 required its symbol

218 BREAKDOWN OF ADMINISTRATIVE REGULATIONS to be passed pursuant to the Environment Protection Law

Regulations to be passed by the Minister

Regulation Legal base Regulation concerning habitat types, criteria for singling Article 23 out habitat types, habitat maps, sensitive habitat types Paragraph 6 and safeguard measures for preserving habitats

Regulation concerning the procedure for earning and Article 35 obtaining the right to use speleological objects Paragraph 6

Regulation on required cadastre establishing and Article 35 keeping, rights and obligations of speleological Paragraph 5 organisations and other institutions

Regulation on the content and method of keeping Article 59 registers of protected natural resources Paragraph 4

Regulation concerning the procedure for the issue of Article 102 licences, the content, appearance and method of Paragraph 4 keeping a register of issued licences

Regulation concerning requirements for animal keeping, Article 105 labelling and record keeping Paragraph 4

Regulation concerning conditions under which fossils, Article 110 minerals and crystals may be given to a legal person for Paragraph 4 protection and safekeeping

Regulation on the appearance of the environment Article 126 protection symbol, procedure and requirements for its Paragraph 2 use

219 BREAKDOWN OF REGULATIONS TO BE PASSED Pursuant to the Law on Protection from Environmental Noise Pollution

Regulations to be passed by the Government

- The Government prescribes noise level limits in the environment (Article 13 Paragraph 3).

Regulations to be passed by the Minister

- The Minister prescribes further requirements concerning staff, equipment and premises to be met by the designated agency in charge of measuring environmental noise levels. (Article 21 Paragraph 2)

- The Minister prescribes noise indicators, tables of day-, evening- and night-time duration within the limits prescribed under Paragraph 4 of this Article. (Article 22 Paragraph 5)

- The Minister and the Minister in charge of health matters prescribe, in agreement, methods of assessing indicator values and methods of assessing harmful effects of environmental noise on human health. (Article 23 Paragraph 3)

- The Minister further regulates the obligatory content and method of production of environmental noise cards. (Article 24 Paragraph 11)

Regulations to be passed by local self-government units

- Local self-government units designate quiet zones, prohibition and restriction measures within an agglomeration, i.e. residential area. (Article 15 Paragraph 4)

- When holding rallies, entertainment, sports or other outdoor or indoor events that may exceed noise value limits, local self-government units make a decision on designating streets, parts of streets and residential areas, town/city squares and other locations intended for these purposes, as well as roads to be used by participants when entering and exiting. (Article 16)

220 Regulations to be adopted in order to enable implementation of the Air Protection Law

The Government will prescribe: - value limits of imission of pollutants in the air as well as the ceiling and the threshold for the assessment of air quality, temporary bounds of tolerance, i.e. tolerated values, warning imissions and target values for certain pollutants, criteria for designating measurement points, measurement methods, measurement procedures, method of double-checking the quality of measurement and accuracy of the data, method of processing and presentation of assessment results and their compliance with the prescribed norms, required reporting on measured imissions and deadlines for the submission of measurement data, methods of assessing pollution levels as well as deadlines for gradually reducing bounds of tolerance, i.e. tolerated values; - air pollutant emission value limits, the procedure, frequency and methods of measurement, criteria for designation of measurement points, method of double-checking the accuracy and calibration, i.e. calibration of measurement instruments, procedure for evaluating results and compliance with prescribed norms, required reports on measured emissions and emission balances and deadlines for data submission; - the method of gradually reducing the use of substances that deplete the ozone layer, treatment of these substances and products containing or designated to contain these substances, treatment of substances that deplete the ozone layer after the product containing them has been used, method of collection, processing, storing and permanent disposal, as well as required labelling of products containing ozone-depleting substances; - required method of monitoring the emission of greenhouse gasses and stored quantities of these gasses; - criteria for approving the measures of clean development, evaluation of compliance of these measures with the effects of reduced emission of greenhouse gasses, transfer of confirmed reduced emissions of greenhouse gasses to national or foreign legal persons and reporting on implemented measures.

The Minister will prescribe: - further criteria for the designation of zones of protection in the procedure of designating purpose areas for building stationary sources of air pollution; - further requirements to be met by natural and legal persons in order to perform activities pertaining to maintenance and/or repair and exclusion of products containing ozone-depleting substances, as well as required record keeping of maintenance and/or repair and exclusion of products containing substances that deplete the ozone layer; - required establishment of a cadastre of air polluters, required data keeping and data submission; - required exchange of information from the air quality information system; - further requirements to be met by legal persons and reference laboratories in order to perform imission and emission measurements.

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