EUROPEAN COMMISSION Brussels, 6.10.2020 SWD(2020) 355 final COMMISSION STAFF WORKING DOCUMENT Turkey 2020 Report Accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2020 Communication on EU Enlargement Policy {COM(2020) 660 final} - {SWD(2020) 350 final} - {SWD(2020) 351 final} - {SWD(2020) 352 final} - {SWD(2020) 353 final} - {SWD(2020) 354 final} - {SWD(2020) 356 final} EN EN Table of Contents 1. INTRODUCTION ........................................................................................................ 3 1.1. Context ......................................................................................................................... 3 2. FUNDAMENTALS FIRST: POLITICAL CRITERIA AND RULE OF LAW CHAPTERS ................................................................................................................ 10 2.1. Functioning of democratic institutions and public administration reform ................. 10 2.1.1 Democracy .................................................................................................................. 10 2.1.2. Public administration reform ...................................................................................... 18 2.2. Rule of law and fundamental rights............................................................................ 21 2.2.1. Chapter 23: Judiciary and fundamental rights ............................................................ 21 2.2.2 Chapter 24: Justice, freedom and security .................................................................. 42 3. Fundamentals first: economic development and competitiveness ............................. 53 3.1. The existence of a functioning market economy ........................................................ 54 3.2. The capacity to cope with competitive pressure and market forces within the Union60 4. GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION ....... 63 5. ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP ....................... 67 5.1. Chapter 1: Free movement of goods .......................................................................... 67 5.2. Chapter 2: Freedom of movement for workers .......................................................... 69 5.3. Chapter 3: Right of establishment and freedom to provide services .......................... 69 5.4. Chapter 4: Free movement of capital ......................................................................... 69 5.5. Chapter 5: Public procurement ................................................................................... 71 5.9. Chapter 9: Financial services ...................................................................................... 76 5.10. Chapter 10: Information society and media ............................................................... 77 5.11. Chapter 11: Agriculture and rural development ......................................................... 79 5.12. Chapter 12: Food safety, veterinary and phytosanitary policy ................................... 80 5.13. Chapter 13: Fisheries .................................................................................................. 81 5.14. Chapter 14: Transport policy ...................................................................................... 82 5.15. Chapter 15: Energy ..................................................................................................... 83 5.16. Chapter 16: Taxation .................................................................................................. 86 5.17. Chapter 17: Economic and monetary policy .............................................................. 87 5.18. Chapter 18: Statistics .................................................................................................. 88 5.19. Chapter 19: Social policy and employment ................................................................ 89 5.20. Chapter 20: Enterprise and industrial policy .............................................................. 92 5.21. Chapter 21: Trans-European networks ....................................................................... 94 5.22. Chapter 22: Regional policy and the coordination of structural instruments ............. 95 5.25. Chapter 25: Science and research ............................................................................... 96 1 5.26. Chapter 26: Education and culture ............................................................................. 97 5.27. Chapter 27: Environment and climate change............................................................ 99 5.28. Chapter 28: Health and consumer protection ........................................................... 102 5.29. Chapter 29: Customs Union ..................................................................................... 104 5.30. Chapter 30: External relations .................................................................................. 105 5.31. Chapter 31: Foreign, security and defence policy .................................................... 106 5.32. Chapter 32: Financial control ................................................................................... 110 5.33. Chapter 33: Financial and budgetary provisions ...................................................... 112 Annex I – Relations between the EU and Turkey .................................................................. 114 2 1. INTRODUCTION 1.1. Context Turkey remains a key partner for the European Union. Turkey has been linked to the EU by an Association Agreement since 1964 and a Customs Union was established in 1995. The European Council granted the status of candidate country to Turkey in December 1999 and accession negotiations were opened in October 2005. Within the framework of accession negotiations, 16 chapters had been opened and one of these was provisionally closed. The General Affairs Council conclusions of June 2019 reiterated the Council’s position of June 2018 that under the currently prevailing circumstances, Turkey’s accession negotiations have effectively come to a standstill, no further chapters can be considered for opening or closing and no further work towards the modernisation of the Customs Union can be currently foreseen1. The Turkish government’s repeated commitment to the objective of EU accession has not been matched by corresponding measures and reforms, and the EU’s serious concerns on continued deterioration of democracy, the rule of law, fundamental rights and the independence of the judiciary have not been addressed with further backsliding in many areas. Following its last meeting on 9 May 2019, no further meetings of the inter-ministerial Reform Action Group were held. The relations with the EU worsened due to the developments in Syria and Libya. In light of the unauthorised drilling activities of Turkey in the Eastern Mediterranean, in July 2019 the Council decided to suspend negotiations with Turkey on the Comprehensive Air Transport Agreement, not to hold for the time being the EU-Turkey Association Council as well as further meetings of the EU-Turkey high-level dialogues, to endorse the Commission’s proposal to reduce the pre-accession assistance to Turkey for 2020, and to invite the European Investment Bank to review its lending activities in Turkey, notably with regard to sovereign- backed lending. The EU further adopted a framework for targeted measures against Turkey in November 2019 and decided in February 2020 to add two individuals to the list of designations under this sanctions framework. On 1 October 2020, the European Council agreed to launch a positive political EU-Turkey agenda, provided constructive efforts to stop illegal activities vis-à- vis Greece and Cyprus are sustained. The EU has a strategic interest in a stable and secure environment in the Eastern Mediterranean and in the development of a cooperative and mutually beneficial relationship with Turkey. The European Council also stressed that in case of renewed unilateral actions or provocations in breach of international law, the EU will use all the instruments and the options at its disposal in order to defend its interests and those of its Member States. Turkey sustained its outstanding efforts to host more than 3.6 million registered refugees from Syria and around 370,000 registered refugees from other countries, which is the largest refugee community in the world. Turkey and the EU further built on the fruitful cooperation under the Facility for Refugees in Turkey. The full operational budget of the EU Facility for Refugees in Turkey was committed by the end of 2019. Out of a total of EUR 6 billion, EUR 5.1 billion had been contracted, out of which EUR 3.8 billion had been disbursed. Overall, the March 2016 EU-Turkey Statement continued to deliver results, with both parties renewing commitment to its effective implementation. Early in March 2020, Turkey however actively encouraged migrants and refugees to take the land route to Europe through Greece. Later in March, the Turkish authorities organised transport for migrants and refugees away from the border area with Greece and closed the borders with Greece and Bulgaria except for commercial traffic because of the outbreak of the COVID-19 pandemic. Turkey also called for a new agreement to replace the March 2016 Statement. Following the meeting of the President of the European Commission and the President of the European Council with the Turkish President on