1. EXTRACTS FROM THE EUROPEAN COMMISSION REPORTS ON SERBIA (2005 – 2007), COUNCIL OF EUROPE REPORTS ON SERBIA (2005 – 2007) AND GRECO EVALUATION REPORT (2006) AND COMPLIANCE REPORT (2008) ON SERBIA (PDF) download >>>
2. ANALYSIS ON SERBIA BASED ON THE EXTRACTS FROM THE EUROPEAN COMMISSION REPORTS (2005 – 2007), COUNCIL OF EUROPE REPORTS (2005 – 2007) AND GRECO EVALUATION AND COMPLIANCE REPORTS (2006, 2008)
General Statements
In the Feasibility Study and Progress Report (2005), European Commission points out that Serbia suffers from a high level of corruption, with links between organized crime and segments of the political and institutional system. Moreover, the Commission notes that a few efforts are made by the authorities to fight corruption and organized crime. In conclusion, the Commission and the Council of Europe state, that corruption as a source of a serious concern, should be stepped up and concrete results should be delivered.
In its Report (2006), the Commission stresses that corruption is perceived as widespread, while GRECO underlines that corruption is one of the most serious problems that occurs throughout society, emphasizing that the fight against corruption is one of the Government’s highest priorities.
Following year, European Commission repeats its concern over the existence of corruption described as a widespread and a serious problem, while Council of Europe emphasizes again that the fight against corruption is a priority for the Government.
Capacities to Fight Corruption and Anticorruption Policies
In 2005, the Commission and Council of Europe state that Serbia’s commitment to fight corruption remained largely rhetorical, pointing out that anti-corruption strategies are lacking as well as efficient institutions to implement them. Therefore, they emphasize that an action plan should be adopted and, consequently, effective implementation of the Strategy should be ensured – in particular, through the setting up of an independent agency. In conclusion, Council of Europe underlines that resolute action from the law enforcement bodies and a better co-ordination between the police and prosecuting authorities are needed.
In the following year, the Commission and Council of Europe welcome the adoption of the National Strategy for Fighting against Corruption. However, the Commission repeats that the Action Plan for the implementation of the strategy is not adopted, emphasizing, as well as GRECO, that an efficient monitoring of its implementation must be ensured through a centralised specialised independent anti-corruption body. Moreover, GRECO finds that creation of a special unit within the Public Prosecutor’s Office to deal with corruption would be a step forward in tackling the issue of corruption.
European Commission, in 2007, greets adoption of the Action Plan for the implementation of the strategy, underlining that it lacks clear deadlines, concrete actions and necessary resources for its implementation, emphasizing that there are shortcomings in implementing the GRECO recommendations. Finally, it is noted that, although, most of the necessary legislative measures against corruption are in place, anti-corruption action plan needs to be implemented and an anti-corruption agency established.
In its Compliance Report (2008), GRECO notes as a positive development setting up of Commission for the Implementation of the National Anti-corruption Strategy and the establishment of the Special Department for Combating Corruption within the Republic Public Prosecutor’s Office. GRECO expect that the Anti-corruption Agency, which will be responsible for monitoring of the implementation of the Anti-corruption Strategy and its Action Plan, will possess sufficient authority and resources to effectively complete its oversight task.
International Conventions and Obligations
In 2005, European Commission welcomes Serbia’s joining of the Council of Europe’s GRECO initiative and ratification of the European Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, concluding that UN convention provisions need to be adopted.
Following year, the Commission and Council of Europe in their reports greet Serbia’s ratification of the UN convention against corruption, while the Council points out that careful attention need to be given to the recommendations contained in the GRECO Evaluation Report.
In 2007, Council of Europe greets Serbia’s ratification of the Civil Law Convention on Corruption and the Additional Protocol to the Criminal Law Convention on Corruption.
Judiciary
In 2005, European Commission and Council of Europe state that independence of judiciary continues to be severely undermined by: political pressure on the appointment of judges and prosecutors and their activities, financial pressure, the fact that the courts and prosecution authorities must be financed from the regular state budget like other state institutions and the lack of effective disciplinary measures. It is emphasized that there are cases of corruption in judiciary and prosecution, and that the judicial reform strategy, which includes worrying provisions on the reappointment of judges and on placing the prosecutor system under the Ministry of Justice, is delayed. Council of Europe concludes that Serbia has to complete in-depth reforms to secure the independence and impartiality of the judiciary and prosecution in compliance with Council of Europe standards.
In their reports in 2006, European Commission and Council of Europe, repeat, and GRECO notes the fact that the independence, integrity and functioning of the justice system appear to be issues of concern, while members of the judiciary remain subjected to strong political influence, with existing cases and allegations of corruption involving some of its highest instances. It is underlined that the new Constitution contains an area of concern regarding the lack of objective mechanisms free of political influence to appoint, promote and dismiss judges and prosecutors. The Commission and the Council conclude that the successful implementation of the National Strategy for Judicial Reform is the key step on the way to ensure the independence, efficiency and professionalism of the judiciary.
Following year, European Commission and Council of Europe repeat for the third time, their concerns over the role of the Parliament in judicial appointments, emphasizing that the Constitution and the Constitutional law leave room for political influence over the appointment of judges and prosecutors. Moreover, according to their opinion and findings there is the significant backlog in both civil and criminal cases which is a matter of serious concern, as well as, a widespread perception of corruption in the judiciary. Therefore, the Commission and the Council conclude that further efforts need to be made to ensure the independence, accountability, and efficiency of the judicial system through adopting transparent procedures and criteria for the appointment of judges which are in accordance with European standards.
In 2008, in its Compliance Report, GRECO, taking into account that the legislative framework in this area is still being developed, urges the authorities to pursue vigorously their efforts in defining clear criteria and procedures for judicial appointments and promotions.
Police
GRECO, in its Evaluation Report (2006), states that there is a clear lack of public confidence in the work among of police, while European Commission stresses that the Inspectorate General, established as the internal control department of the police, reported difficulties in functioning, notably due to the lack of cooperation within the police as well as in relation to the restrictions to the access to information concerning complaints filed against police officials.
Following year, the Commission and European Council expresses their concerns over undue political interference in the work of the police and the level of transparency as well as about the cases of police officers involved in organized crime and corruption.
Public Administration and Business Environment
In 2005, Council of Europe emphasizes that one of main sources of their concern is related to privatisation fraud, while European Commission states that there is a need for stable macroeconomic environment supported by the creation of a strong private sector through de-monopolisation and privatization which are sustained by a stable and transparent legal and regulatory framework. It is underlined that Serbia should devote particular attention to the issue of illegal economic activities.
In its Evaluation Report (2006), GRECO expresses its opinion that there are lacunas in the implementation phase of the privatization, adding that the privatisation process sufferes from the weaknesses, which are conducive to corruption.
Following year, European Commission states that the legal framework that regulates the privatisation process does not provide sufficient checks and balances to minimise the risk of misuse and corruption, adding that a comprehensive audit system is not in place – which is an obstacle to the establishment of a properly regulated public expenditure system, capable of preventing systemic corruption at its source.
Public Procurement
In its Feasibility Study and Progress Report (2005), the Commission states that Serbia should create transparent and open public procurement procedures, ensuring fair and non-discriminatory conditions of competition for EU suppliers, underlining that there is no legislative or administrative developments.
In their reports in 2006, European Commission and GRECO emphasize that there are lacunas in the implementation of the Public Procurement Law. It is pointed out that there is a relatively high level of corruption causing a need for strict implementation and for developing an efficient monitoring and control mechanism of public procurement processes. Notably, this could be archived by strengthening the implementation capacity of the Public Procurement Office and the Public Procurement Commission and by increasing their independence in relation to the Government and ensuring transparency in decision-making.
Following year, the Commission emphasizes that little progress is made and that more systemic approach in fighting corruption, which includes transparent public procurement procedures, is needed. It is stressed, again, that the public procurement Law is not amended and that no progress is made in addressing the gaps in the legal framework. Moreover, it is stated that weaknesses in the internal audit system of the public administration, corruption and the absence of a fully functioning supreme audit institution represent further risks to the implementation of an effective, consistent and nondiscriminatory public procurement system, while the Council concludes that incorporation of the currently independent Public Procurement Office into the Ministry of Finance will be detrimental to transparency in public procurement.
In its Compliance Report (2008) GRECO encourages, as well as European Commission in 2006, the authorities to proceed promptly with the adoption of the envisaged amendments aimed towards increasing the independence, transparency and effectiveness of the procurement process.
Money Laundering
In 2005, European Commission highlights that the new law on Money laundering is not adopted, while the enforcement of the existing anti-money laundering legislation needs serious improvement.
European Commission, in its Progress Report (2006), stresses that insufficient cooperation between all competent agencies is a serious obstacle to effectively preventing and fighting money laundering, while Council of Europe greets setting up of the working group for drafting the National Anti-Money Laundering and Counter Terrorist Financing Strategy. GRECO recommends that the range of reporting institutions should be kept under careful review and enhanced training initiatives should be pursued in order to increase awareness of suspicious transaction reporting and monitor progress, emphasizing that guidelines containing money laundering indicators for all obliged entities should be issued.
Following year, the Commission states that money laundering remains a serious problem in Serbia, emphasizing that a national strategy for prevention of money laundering and financing terrorism is not adopted, and that the preparations for combating money laundering are at an early stage, with very limited implementation of the new legislative framework.
GRECO, in its Compliance Report (2008), welcomes issuing of guidelines containing money-laundering indicators for a number of reporting institutions, underlining, on the other hand, that there is no evidence if a monitoring mechanism is developed to assess whether all obliged entities are effectively reporting suspicious transactions.
Conflict of Interests
In Feasibility Study and Progress Report (2005), European Commission states that legislative progress was achieved with the adoption Laws on the prevention of conflicts of interest. However, it is emphasized that conflict of interest remains a concern, as there are delays in implementing the new legislation and the results are limited. Council of Europe concludes that concrete measures to amend and implement the Law are expected from the authorities.
European Commission, in 2006, repeats that the implementation of the laws on conflict of interests continues to face difficulties, notably concerning the inefficient mechanisms for sanctions. The Commission points out that the issue of board membership in public companies for the members of Parliament is not resolved, where GRECO recommends to expand the application of the Law on the Prevention of Conflicts of Interest in the Discharge of Public Office so that it would include all public officials who perform public administration functions and to introduce clear rules for situations where public officials move to the private sector in order to avoid situations of conflict of interests.
In its Progress Report (2007), European Commission notes that legislation on conflict of interest is generally observed by officials reporting on their assets, however, emphasizing that no enforcement procedures are in place and no adequate follow-up is foreseen by the law.
Following year, in its Compliance Report, GRECO underlines, again, that a clear framework regulating conflicts of interest of all public officials performing public administration functions should be promptly established. Furthermore, GRECO notes as a positive development the ongoing legal reform process reported to further regulate the outside employment of officials during public service, which is encompassed in the draft Law on the Anti-corruption Agency, while encouraging the authorities to proceed swiftly with the adoption of the draft.
Free Access to Information
In 2005, European Commission states, as well as Council of Europe, that the Government is still reluctant to fully implement the law on free access to information, which continues to undermine transparency in public policies. The Council welcomes appointing of Commissioner for free access to information, underlining that the implementation of the existing legislation is strongly recommended.
The Commission, in 2006, repeats that, concerning free access to information, the lack of enforcement remains a problem, while according to GRECO a crucial obstacle for the implementation of the Law is the lack of knowledge.
Following year, European Commission states that free access to information needs further improvement. Furthermore, it is stressed that the lack of enforcement powers restricted the work of the Commissioner for Public Information, and Council of Europe underlines that more needs to be done to improve the effective independence of the Commissioner.
Financing Political Parties
In their reports, in 2005, European Commission and Council of Europe emphasize that there are problems with the content of the law on the financing of political parties and its implementation, with a clear lack of accountability related to the state financing of political parties.
According to the opinion of the Commission, in 2006, the implementation of the laws on the financing of political parties continues to face difficulties, as well as in 2005, notably concerning the inefficient mechanisms for sanctions, where a high number of political parties failed to submit their financial reports to the parliamentary committee for finances, within the set deadlines.
Following year, European Commission repeats that there are shortcomings in the regulations on the financing of political parties, and that the implementation of the laws on the financing of political parties continues to face difficulties. Namely, the new official form for transparent reporting was not implemented and political parties failed to disclose complete information on their finances and adequate enforcement procedures are not provided by the law. Moreover, Council of Europe notes that one of the main complaints of the independent Anti-Corruption Commission is that the legislation covering the area of the fight against corruption is incomplete and notably left a gap in relation to the financing of political parties – which is the cause of systematic corruption in Serbia.
Customs and Taxation
European Commission, in 2005, underlines that further reforms are needed to improve the fight against corruption in customs, adding that fight against corruption has to be pursued and reinforced in order to achieve a non-discriminatory application of tax laws.
In 2006, the Commission notes that progress was registered in the fight against corruption in the customs administration, concluding that the fight against corruption requires continued attention in both administrations. However, GRECO concludes that the tax authorities could improve the collection of taxes, as it is a well known fact that lacunas in the tax system favour corruption.
Following year, European Commission greets introducing a new Code of Conduct in the customs administration, which will establish new anticorruption measures.
Competition
In Feasibility Study and Progress Report (2005), European Commission states that Serbia needs to ensure fully independent competition authorities which would be equipped to ensure efficient enforcement practice, giving priority to cases with a serious effect on the market and ensuring deterrent sanctioning of infringements. In its opinion, Serbia needs to develop its competition advocacy by promoting competition policy, by the screening of draft legislation regarding competition aspects and by improved public procurement practices.
European Commission, in 2006, welcomes the adoption of the Law on Protection of Competition and establishment of an independent competition protection body – the Commission for Protection of Competition. However, it is pointed out that there has been no enforcement practice.
Following year, the Commission noted that there is a limited progress in the area of competition, stressing that the operational independence of the competition authority should be assured.
State Aid
In its Progress Report (2005), the Commission recommends that Serbia should strengthen its state aid structures and ensure full transparency.
In 2006, European Commission notes that a good progress is made by designating a separate unit within the Finance Ministry to deal with state aid monitoring and reporting. However, it is underlined that state aid structure needs to be strengthened and a system of ex-ante control of all new aid measures needs to be set up. Moreover, Serbia need to align existing aid measures, through an operationally independent state aid authority, with the power to authorise or prohibit all aid measures and to order recovery of unlawfully granted aid.
Following year, European Commission notes that an operationally independent state aid authority which should have introduced a system of ex-ante control of all state aid measures and should have prepared the alignment of existing state aid measures with the Stabilization and Association Agreement was not established.