EUROPEAN COMMISSION Brussels, 29.5.2019 SWD(2019) 215 final COMMISSION STAFF WORKING DOCUMENT Albania 2019 Report Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2019 Communication on EU Enlargement Policy {COM(2019) 260 final} EN EN Table of Contents 1. INTRODUCTION 3 1.1. Context 3 1.2. Summary of the report 3 2. FUNDAMENTALS FIRST: POLITICAL CRITERIA AND RULE OF LAW CHAPTERS 5 2.1. Functioning of democratic institutions and public administration reform 5 2.1.1 Democracy 6 2.1.2. Public administration reform 10 2.2. Rule of law and fundamental rights 14 2.2.1. Chapter 23: Judiciary and fundamental rights 14 2.2.2. Chapter 24: Justice, freedom and security 31 3. FUNDAMENTALS FIRST: ECONOMIC DEVELOPMENT AND COMPETITIVENESS 44 3.1. The existence of a functioning market economy 44 3.2. The capacity to cope with competitive pressure and market forces within the Union 49 4. GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION 52 5. ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP 54 5.1. Chapter 1: Free movement of goods 54 5.2. Chapter 2: Free movement of workers 55 5.3. Chapter 3: Right of establishment and freedom to provide services 56 5.4. Chapter 4: Free movement of capital 57 5.5. Chapter 5: Public procurement 58 5.6. Chapter 6: Company law 60 5.7. Chapter 7: Intellectual property law 61 5.8. Chapter 8: Competition policy 62 5.9. Chapter 9: Financial services 64 5.10. Chapter 10: Information society and media 65 5.11. Chapter 11: Agriculture and rural development 66 5.12. Chapter 12: Food safety, veterinary and phytosanitary policy 67 5.13. Chapter 13: Fisheries 69 5.14. Chapter 14: Transport 70 5.15. Chapter 15: Energy 72 5.16. Chapter 16: Taxation 75 5.17. Chapter 17: Economic and monetary policy 76 1 5.18. Chapter 18: Statistics 77 5.19. Chapter 19: Social policy and employment 78 5.20. Chapter 20: Enterprise and industrial policy 81 5.21. Chapter 21: Trans-European networks 82 5.22. Chapter 22: Regional policy and coordination of structural instruments 84 5.25. Chapter 25: Science and research 85 5.26. Chapter 26: Education and culture 87 5.27. Chapter 27: Environment and climate change 89 5.28. Chapter 28: Consumer and health protection 92 5.29. Chapter 29: Customs union 93 5.30. Chapter 30: External relations 94 5.31. Chapter 31: Foreign, security and defence policy 96 5.32. Chapter 32: Financial control 97 5.33. Chapter 33: Financial and budgetary provisions 99 ANNEX I – RELATIONS BETWEEN THE EU AND ALBANIA 101 ANNEX II – STATISTICAL ANNEX 103 2 1. INTRODUCTION 1.1. Context Albania has continued to implement the Stabilisation and Association Agreement and the meetings of the joint bodies under the agreement took place. In April 2018, the Commission recommended that the Council decides that accession negotiations be opened with Albania, at the same time encouraging Albania to maintain and deepen the current reform momentum, in particular in the key field of the rule of law. In June 2018, the Council set out the path towards opening accession negotiations in June 2019. Albania has continued to implement reforms that are crucial to the EU agenda, in particular delivering concrete results in the conditions identified in the Council Conclusions of June 2018 for the opening of accession negotiations. The Commission has continued to monitor thoroughly the developments in these areas. 1.2. Summary of the report1 As regards the political criteria, Albania has continued to make progress on its EU reform agenda throughout the reporting period. Strong polarisation persisted in the political sphere. Parliamentary activities were affected by a prolonged boycott from opposition parties, which then also relinquished en bloc their parliamentary mandates in February 2019. More than half of the relinquished parliamentary mandates have now been reassigned by the Central Election Commission and the quorum for the full functioning of Parliament is maintained. Main opposition parties decided not to register for the local elections, which are scheduled to take place on 30 June 2019. The main opposition parties’ disengagement has negatively affected the efforts for a bipartisan electoral reform despite the majority’s efforts to move forward. Opposition parties should constructively re-engage in the democratic institutions. Albania is moderately prepared in what concerns the reform of its public administration. Efforts continued in several related areas, resulting in some progress in the efficiency and transparency of public services delivery, improving the regulatory framework on impact assessment of policies, more transparent recruitment procedures, and the overall strengthening of the administration’s capacity to undertake merit-based civil service procedures. Consolidation of these achievements should advance further, to ensure a more efficient, depoliticised, and professional public administration. Albania's judicial system has some level of preparation. The implementation of comprehensive and thorough justice reform has continued consistently, resulting in good progress overall. The new institutions for the self-governing of the judiciary, the High Judicial Council, the High Prosecutorial Council and the Justice Appointment Council have been established, representing a crucial step in strengthening the independence and accountability of the judiciary. The temporary re-evaluation of all judges and prosecutors (vetting process) has advanced steadily, producing tangible results. Under the aegis of the European Commission, the International Monitoring Operation has continued to oversee the process. More than 140 files have been processed, resulting in 88 dismissals/resignations of magistrates from office and 53 confirmations. Most dismissals pertained to issues related to unjustified assets. These concrete and credible results have substantially strengthened the sector and consolidated independence, impartiality, professionalism, and accountability of the judiciary. Albania has some level of preparation in the fight against corruption. Good progress was made, notably with the adoption of the new Action Plan 2018-2020 for the implementation of 1 This report covers the period from March 2018 to March 2019. It is based on input from a variety of sources, including: contributions from the government of Albania, contributions from the EU Member States, European Parliament reports, and information from various international and non-governmental organisations. 3 the Inter-sectoral Strategy against Corruption, the amendments to the Law on the Declaration and Audit of Assets, the Law on Public Procurement as well as the adoption of the Code of Conduct for members of Parliament. The establishment of an Anti-corruption Task Force has increased the proactivity of administrative investigations. Direct access to databases for prosecutors and the police continued to improve. Good progress has continued through the strengthening of the track record on investigating, prosecuting and trying high level corruption cases. Concrete results in the fight against corruption include the vetting process which has led to the dismissal from office of a number of high-ranking magistrates, including at Constitutional Court and High Court level. The establishment of the High Prosecutorial Council (HPC) allowed the launch of the establishment of specialised anti-corruption bodies (Special Anti-Corruption and Organised Crime Structure – SPAK, National Bureau of Investigation – NBI). Once the vetting of candidates is completed, the bodies will become operational which will strengthen the overall capacity to investigate and prosecute corruption. However, overall, corruption is prevalent in many areas and remains an issue of concern. Albania has some level of preparation in the fight against organised crime. Police operations to dismantle criminal organisations have been intensified. Several police operations resulted in multiple arrests, and a number of important indictments and convictions took place. These operations resulted in the arrest and prosecution of known leaders of organised criminal groups. International police cooperation, especially with EU Member States, has also intensified, leading to a number of successful large-scale law enforcement operations. Consistently for the past years, Albania showed a strong commitment to counter the production and trafficking of cannabis. Albania allows an intrusive monitoring mechanism by an EU Member State (aerial surveys by the Italian Guardia di Finanza, co-financed by the EU) to be in place. In the past two crop seasons, aerial surveillance has certified that almost no cultivation of cannabis has taken place in Albania. These steps represent tangible progress in meeting last years’ recommendations on improving the track record. Efforts need to continue, in particular by tackling money laundering and confiscating assets stemming from crimes and other unjustified wealth. On fundamental rights, Albania complies overall with international human rights instruments and developed its legal framework in line with European standards. During the reporting period, Albania has made efforts to meet obligations that arise from international legal instruments. The overall implementation of those instruments remains, however, to be strengthened. Legal framework was improved in the areas of child’s rights and domestic violence. A new law on social housing was approved by the parliament in May 2018, which aims