Update to the contribution to the progress report on the process of accession of the republic of macedonia to the european union


The Administrative Court and the Appelate Court in Gostivar are fully functional



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The Administrative Court and the Appelate Court in Gostivar are fully functional.
The Administrative Court has completed all the remaining cases until 2005. At the end of August the Administrative Court recorded a total of 10496 cases. As of 1.01.2008, 5804 cases are inherited from the Supreme Court, 1898 of the cases were completed by the end of August 2008, while 8598 remain to be solved. One additional judge was appointed to the Administrative court on 26.08.2008.
The Appellate court in Gostivar until end of July registered a total of 3526 cases, out of which 1671 were completed, while 1585 remain in procedure.
The employment procedure for 18 clerks in the Administrative Court and for 16 clerks in the Appellate Court in Gostivar was finalised. The public announcement for employment of the rest 6 clerks for the Administrative court was published on 22 august 2008
The Academy for Training Judges and Prosecutors is fully completing its targets and further improving its operation.
The first generation of the candidates for judges and prosecutors continued with the initial training. At the moment, the practical part of the initial training is ongoing and the candidates are under mentorship in the judicial institutions in the Republic of Macedonia.
On 20-21 June and 23-24 June the Academy organised preparatory instruction for the candidates that intend to take the entrance test on the Academy, especially targeting the candidates belonging to the members of the communities. The Academy’s Committee for qualification and admission of candidates was constituted and the qualification test for initial training took place on 5 July 2008. The test was successfully passed by 34 candidates who gained the right to take the entry exam. On 14-15 July in the Appellate Court Skopje the written exam was held and on 21-22 July the oral exam. On 22 July the preliminary list was published and after the complaints period the final ranking list was published. Following the examination of the submitted complaints, the Academy has published the final ranking of 27 candidates, who have started the second round of initial training starting as of 15 September 2008.
For this purpose, the Academy adopted the following bylaws published in the Official Gazette of the Republic of Macedonia no.104/2008: Rulebook on the beginning, order and discipline, disciplinary responsibility and other rights and responsibilities of the candidates in the course of initial training at the Academy and Programme on the beginning, order and discipline, disciplinary responsibility and other rights and responsibilities of the candidates in the course of initial training at the Academy.
The recommendations of the JFS Peer Review Expert Mission conducted in March 2008, which do not require amendments of the Law on the Academy and other related laws were realised by the Academy. The recommendation regarding the anonymous written part of the entrance exam was realised, through amendments in the Rulebooks for procedure of passing and evaluation of the qualification test and the entrance exam. The second recommendation was also realised through not extending the final ranking list with representatives of the communities. There were 3 representatives of the communities who entered the final ranking list according their success/merit on the exam. All 27 candidates had excellent results and their scores were between 98 and 85 out of 100.
The Program for initial training in the Academy – Theoretical Part was revised. The Academy is working on the detailed schedule of classes for theoretical part and on the new Rulebook for the petitions, order, discipline, discipline responsibility and other rights and obligations of the candidates for initial training in the Academy-theoretical part.
The number of trainers was revised, but the multidisciplinary profile of trainers remained (judges, prosecutors, small number of professors, and other national and international experts. The New Program established obligation for the trainers to have 50% of theoretical classes and 50% of practical classes. The international dimension of the Program remained and the candidates would still have 59 classes on international and EU law with international and international experts.
The preparations for the THEMIS Initial Training International Competition which will be held the National Institute for Magistrates in Romania (NIM) continued. Three candidates and one trainer from the Academy will participate in this competition. Also, the preparations of the study visit for 5 candidates in NIM are ongoing.
In the period of June-September, the Academy organised/cooperated in organisation of 26 different seminars with participation of total of 351 participants (388 judges, 84 prosecutors, 13 court/prosecutors clerks and 52 other participants), with total of 301 hours of training.
The detailed Training Calendar for September-December 2008 was adopted by the Managing Board of the Academy and it is distributed to all courts, public prosecutor’s offices and to the Ministry of Justice.

The Academy in cooperation with the World Bank prepared a Programme for training of Judges from the Administrative court and a specialised Programme for training of judges who work on misdemeanour cases and for the members of the Commissions for misdemeanours in the state institutions (150 participants).


International dimension in the continuing training is also present. Total of 13 judges and prosecutors participated in 8 regional and international trainings, conferences, study visits and exchange programs with total of 165 hours of training. The cooperation with the European Judicial Training Network (EJTN) continued. The Academy participated in the EJTN project with the Judicial School in Barcelona in the criminal justice area in two programs during the reporting period. The preparatory activities for the programs in the next period are ongoing. The cooperation with EJTN is extended in civil matters with signing of the Partnership declaration for the project “European Forum for judicial training in civil matter (training for trainers). Academy is included in EJTN Calendar for 2008. The activities in EJTN Exchange Program continued. In this period one prosecutor from Macedonia participated in this Program. Total of 8 participants form the EU countries will participate in Exchange Program in the Academy, starting form 1 September and in this regard the Academy took preparatory activities. In the reporting period the representatives of the Academy participated in the meetings organised or co-organised by EJTN. The activities with the HELP Program of the Council of Europe continued through organisation of the Pilot Program for distance learning for judges and prosecutors. The Academy took activities in programs regarding the future trainings on intellectual property. The Academy took activities in preparation of different projects, which should be realised from September, with: IRZ, GTZ, OSCE SMMS, UNICEF, Council of Europe, Reparis, French Embassy. The Academy took preparatory activities for 3 regional conferences (with GTZ, UNICEF, TAIEX) which should be organised by the Academy from September as well activities regarding the EJTN meeting which on 7 November will be held in the Academy, on a common judicial training module in Europe – follow-up of the meeting held in Sofia on 29th – 30th November 2007.
The Judicial Council is functioning with full capacity.
Until 15.09.2008, the Judicial Council initiated 39 procedures, out of which 33 procedures against judges due to incompetent and unconscientious performance of the judicial duty, 1 procedure against a court president and 6 disciplinary procedures. 19 the procedures were completed resulting in dismissal of 8 judges and one court president for abuse of duty (incompetence and negligence). 10 judges were dismissed upon their request and 6 procedures were stopped. 20 procedures are ongoing.
The forms for evaluation of the judges were published in the Official Gazette 111 of 03.09.2008. With a decision of the Judicial Council on the 27.08.2008 9 pilot courts have been determined for the testing of the forms (Appellate court Skopje, Basic Courts Kocani, Vinica, Skopje I, Kavadarci, Prilep, Resen, Tetovo, Debar (one court with basic competence and one with extended competence. The filled in forms have been submitted to the Judicial Council for analysis. The initial analysis indicates that around 80% of the judges fulfil the requirements of quality and quantity of their work.
The IT strategy for the Judiciary is being implemented.
A procedure for recruitment of 3 IT experts is concluded and they are employed in the Basic Court Struga and Gostivar and in Appellate Court in Skopje, while for the remaining 4 experts (Basic Courts Kocani, Skopje II, Kumanovo and Appellate Court Stip) the procedure is in process.
Access to Internet for the courts – on 15.08.2008 a tender was launched for providing Internet access in the courts on 36 locations (1420 PC’s) together with anti-virus protection software and PROXY – FIREWALL servers. The selection of the most favourable bidder is ongoing.
With an aim of unifying the court nomenclatures necessary for generating data reports working groups were set up that gathered the contents and defined the nomenclatures from all the courts as entry parameters for the new software package.
Centralised judicial statistics – the tender on Automated Court Case Management Information System (ACCMIS) was concluded on 27.08.2008 and the winning bidder was obliged to develop, test and deliver the final version of ACCMIS by the end of 2008. The implementation the unified court nomenclatures in all the courts is expected by the end of 2009. The system would provide centralised statistics on the cases and the work of the courts.
Alignement with the Law on Misdemeanours has been finalised.
Alignment of the laws with the Law on misdemeanours is being brought to an end. 185 laws were adopted and harmonised (another 3 are in government procedure). 43 Misdemeanours Commissions were constituted, out of which 16 are under MoI. Until 15 August, these Commissions received 27.183 cases, out of which 1584 are in phase of requests to launch procedures, 17.243 are in process, while 8356 were solved.
A Plan for trainings for the application of the Law on misdemeanours has been developed. In line with this Plan, the Academy for training of judges and prosecutors developed a Programme for training consisting of 4 parts (general topics, law on misdemeanours, special procedures and misdemeanour procedure). The first training will take place on 2-3 October with the Misdemeanours Commissions in the Ministry of Interior.
The fifth meeting of the Council for judicial reform was held with the purpose of assessing the progress in the judicial reforms and determining future activities for overcoming obstacles in the reform process. In its concluding remarks, the Council for the judicial reform noted that the Judicial Reform Strategy has been implemented; hence, a new Strategy for the period 2009-2011 should be prepared focusing on improved implementation, the use of IT technology in the judiciary as well as the reform of the penitentiary system.
The Council of Public Prosecutors is now fully functional.
The 3 remaining members of the Council were elected on the Parliamentary session on 31.07.2008 and the Council in full composition held its first session on 04.08.2008. A president and vice president of the Council were elected and the Rules of procedure were adopted. The Council adopted a decision on termination of function for 7 public prosecutors due to retirement). On the session on 01.09.2008 a Decision on defining the number of public prosecutors and Decision for election the prosecutors in PPO for organised crime and corruption and High PPO Gostivar were adopted. The public announcement for the election was published on the 16 September 2008 and the deadline for applications is until 01 October 2008.
On the session held on 12.09.2008 a Rulebook on the procedure for determining responsibility of the public prosecutor was adopted.
On 25.09.2008 the Rulebook for determining the manner of conducting supervision of the work and performance of the public prosecutor’s office and the Rulebook for determining the manner of conducting supervision of the work and performance of the work of the public prosecutors were adopted.
On the Parliamentary session held on 31.07.2008 one judge for the Constitutional court was elected with Badintaire majority. On 18.09.2008 the President of the Republic submitted to the Parliament proposals for the two remaining judges of the Constitutional court. The proposal for the election of judges in the constitutional court is on the agenda of the Parliament (24th parliamentary session scheduled for 6.10.2008)
Overall, the effects of the judicial reform show the following results: The flow of new cases in the first six months of 2008 has decreased for 40.6% compared to 2006. The number of unsolved cases in the first six months of 2008 has decreased for 13.4 % compared to 2006.

In terms of the key priority V relating to ESTABLISHING A SUSTAINED TRACK RECORD ON IMPLEMENTATION OF ANTI-CORRUPTION LEGISLATION the following was achieved:


The Government on 1.07.2008 adopted the National Intelligence Database Action Plan with annexed fiscal implications. The Steering Committee held a meeting in September where the Project manager and Project leaders for certain phases of the Project were appointed.
Law on Criminal Procedure (“Official Gazette of Republic of Macedonia”, No. 83/08), and the Law on Interception of Communications are adopted (“Official Gazette of Republic of Macedonia”, No.110/08) – the laws widen the scope of application of this particular special investigative measure over the criminal offences related to corruption. The Law on Interception of Communications also addresses shortcomings noted during application and incorporate comments received from the experts of the Italian twinning project in the PPO.
The Budget Programme G - Strengthening of the Rule of law, Sub-programme GB - Fight against corruption and organised crime covers the support for the 2008 planned activities from the Government Action Plan for fight against corruption. The Supplementary Budget provided 102.517.000,00 MKD for  the Sub-programme GB - Fight against corruption and organised crime.
On daily basis MoI and other LEA exchange information regarding persons, vehicles etc. The information is shared in writing and on the joint meetings. As of October 2007 and in the course of 2008 Public Prosecutor’s Office on organised crime and the Financial Police realised 5 joint investigations which are processed to the Public Prosecutor’s Office and investigations for 10 cases are ongoing. Public Prosecutor’s Office on organised crime and Customs Administration accomplished 4 joint investigations which resulted with 3 criminal charges submitted by MoI and one by CA. PRO and Direction for Money Laundering in continuity are exchanging data on firms and money laundering qualms.
Results from the enforcement of the Article 359A of the Criminal Code and Amendments to the Law on prevention of corruption regarding the procedures for investigating property and material status are provided in the grids bellow (until 19..09.2008):


Procedures under the Law on Prevention of Corruption1

1

No. of Persons for which data was collected

90

2

Pre-procedures

63

3

Initiated procedures

21

4

Stopped procedures by a conclusion

2

5

Concluded procedures by a decision

4

6

Charged upon a decision

3

7

Tax calculated

9.854.378,00 MKD

8

Tax collected

7.552.077,00 MKD

9

Criminal charges

2




Review of distinct tax procedures (under the Law on Personal Income Tax)

1

Persons for which data is collected

417

2

Pre-procedures

313

3

Initiated procedures

104

4

Procedures for which hearings are undergoing

10

5

Stopped procedures by a conclusion

37

6

Concluded procedures upon a decision

57

7

Charged upon a decision

10 (+ 3 partially charged)

8

Tax calculated

737.096.016,.00 MKD

9

Tax collected

193.048.458 00 MKD

10

Criminal charges

1

Amendments to the Criminal Code are being prepared that deal with the provisions on illicit enrichment. The aim is to introduce novelties that would allow better application of the provision since it was rarely applied by the courts until now. Ongoing are consultations with the UN Office for crime and drugs.


Since the beginning of 2008, the SCPC initiated 20 misdemeanours procedures against officials failing to submit asset declarations and 16 procedures for examination of the property status (among them at the beginning of May 2008, SCPC initiated 3 procedures for examination of the property status of two former judges and one state secretary).
The amendments of the Law on Public Revenue Office (Official Gazette of RM, No. 81/08) provided for closer cooperation between PRO and SCPC in inspection of the property condition.
The document “Criteria for assessment which declarations of assets will be subject of examination” was adopted by the SCPC and PRO as an internal act with establishes the methodology of operation.
Concerning setting up electronic link (network) between State Commission and the Public Revenue Office with an aim of data exchange on property status, SCPS through foreign assistance was provided with the necessary hardware and software (the PRO has already secured all necessary technical capabilities . The electronic flow of data is expected to be functional as of October 2008.
In terms of the key priority VI relating to ENSURING THAT RECRUITMENT AND CAREER ADVANCEMENT OF CIVIL SERVANTS IS NOT SUBJECT TO POLITICAL INTERFERENCE, FURTHER DEVELOPING A MERIT-BASED CAREER SYSTEM AND IMPLEMENTING FULLY THE LAW ON CIVIL SERVANTS, the following progress was noted: the CSA and administrative bodies continued with the activities on completing the data base for training of civil servants.
In the period 28.06 - 24.09.2008, 144 public announcements for employment of 842 civil servants were published.
Due to intensified monitoring, the number of promotions contrary to the Law has decreased to 57 until August in 2008 (compared to 511 in 2007, 315 in 2006 and 255 in 2005).
A consistent system of training has been installed. The National System for coordination of trainings of civil servants was adopted (Official Gazette of the Republic of Macedonia, No.85/08).The constitution of the National Council of the training mechanism is ongoing. The Strategy for Training of Civil Servants was adopted on 12.09.2008. It is a document which encompasses the legislative framework for building of a system for continuous training and to establish a sustainable, stabile and comprehensive system for training and development of civil servants.
CS-3 forms on trainings of each civil servant were submitted by all 53 administrative bodies.
The 2008 Annual Training Programmes with defined target trainings for each category of civil servants (modules) were submitted to the Agency for Civil Servants by 52 administrative bodies out of 53.
45 institutions have established HR Units according to the new Decree out of 53. In 7 institutions the acts on systematisation are submitted to CSA but are subject to certain corrections.
In the frames of the GOFRE Project Administrative capacity building for the process of European integration on 17 and 18 of September training on HR management took place and was attended by 35 participants for HR units. Training Needs Assessment Methodology was developed and human resource managers in all line Ministries and other governmental bodies were trained. The training was based on the Methodology, aimed at raising awareness and bringing tools for effective assessment of training needs based on: (1) Strategic planning and the review of Strategic Plan objectives, initiatives and activities to identify changes in the knowledge, skills and behaviours needed by staff. (2) The definition of the knowledge, skills and behaviours needed to carry out a particular job  (Competency Framework) (3) the needs of the Unit / Sector to ensure all its staff have the necessary skills for their jobs and the Unit’s / Sector’s work and that there is back up cover and (4) To review performance (appraisal) and a personal development plan procedure to identify individual training and development needs.
The Analysis on the Law on Civil Servants was discussed and adopted on the Government session on 06.08.2008 and drafting of the amendments of the Law started after receiving the comments from Sigma/OECD. The WG is drafting Amendments to the Law based on the Analysis.
The Civil Servants Agency has prepared an Analysis of the performance appraisal for 2007. In total, the appraisal procedure has been conducted for 8467 civil servants (91, 8%) of the total number of 9161 civil servants.
Regarding the appraisal of civil servants 51 institution submitted reports out of 53.
The Guidelines on implementation of the career supplement was adopted and published on the CSA web site. Through the Supplementary Budget, 20.000.000,00 MKD were provided for implementation of the career supplement to the civil servants salary, (the career supplement will be put in practice as of 1 September-for the August salary).
The Guideline on closer criteria for assignment of allowances for civil servants was adopted and published in the Official Gazette (No. 77/08). This system will be implemented as of January 2009 and the resources will be provided with the 2009 Budget.
The Rulebook on the form and content of evidence forms of the working hours under specific conditions was adopted (Official Gazette of the Republic of Macedonia, No.98/08)
In regard to the priority VII to REDUCE IMPEDIMENTS TO EMPLOYMENT CREATION AND ADDRESS IN PARTICULAR YOUTH AND LONG TERM UNEMPLOYMENT PROPORTIONALITY OF THE MINIMAL HEALTH INSURANCE

On the demand side of the labour market, the Government pursued a substantial reform of payroll taxes to stimulate job creation.


Labour income (wage) in the Republic of Macedonia is taxed by personal income tax (PIT) and social security contributions which are both paid by the employer, on behalf of employees. With recent introduction of a flat PIT and reduction of previous levels (15, 18 and 24%) to only 10%, Macedonia now belongs to the group of countries with the lowest personal income tax in the world.
However, the overall tax burden remains relatively high, in particular for low-skilled labour, which is most vulnerable to unemployment and informality. The high labour tax burden (tax wedge) on low-wage workers is caused by the minimum base for payment of social insurance contributions which is prescribed at 65% of the national average wage rather than on the individual wage.
In order to reduce (the regressivity of) the tax wedge and reduce administrative burden on firms, the Government carefully designed a comprehensive reform package and an Action Plan for its implementation. The reform, starting January 1, 2009, consists of:

  • Full harmonisation of the basis for payment of the three social contributions;

  • Reduction of social contributions' rates from current 32% to 27,9% in 2009 and further to 22% in 2011;

  • Introduction of a gross wage system: wages would be negotiated on a gross level, tax free allowances would be integrated into wage, liable person for the payment of PIT and social contributions would become the worker, instead of employer (as currently), etc;

  • Integrated collection of the PIT and social insurance contributions in the Public Revenue Office.

In this regard The Law amending the Law on health insurance was adopted by the Parliament and published in Official Gazette of RM No.82/2008. The Law decreases the minimum base for calculation of the health insurance contribution from 65% to 50% of the average monthly salary.


Further changes in the system are defined in the new Law on Mandatory Social Insurance Contributions. The Law regulates liabilities for payment of contributions and the personal income tax, calculation and payment, as well as control over the payment. Statutory rights arising from the insurance status would be still regulated in the separate laws for each area. This reform would trigger changes in other laws and by-laws.
The amendments to the Labour Relations Law (LRL) were adopted aimed at of improving business climate, larger flexibility of the labour market and simplifying administrative procedures for employers.
Besides the reform that impacts the demand side of the labour market, the Government is implementing and planning additional reforms on the supply side of the market, specifically skill endowment of population. Currently, the average educational outcomes and distribution of these outcomes is a significant underused source of growth. Faster growth of the economy, mainly driven by greater investments including FDIs, can be constrained if there is no improvement in the supply of skills among the population. In addition, individuals with low educational attainment have higher probability of being unemployed and poor or working poor, and therefore they are less likely to benefit from higher economic growth and rising living standard if there is no improvement in their skills. Hence the need for the Government to pursue reforms in the area of education and training to increase quantity and quality of human capital and therefore support economic growth and higher living standard. Improved human capital will raise productivity, change pattern of growth, increase export competitiveness and lead to more inclusive growth.
In this respect, the Government has so far pursued reforms in terms of introduction of a 9th grade in primary education (compulsory education begins at earlier age), revised curricula including learning of IT and languages from earlier age, made secondary education compulsory, adopted a new Law on Tertiary Education and Law on Lifelong Learning, VET Centre became functional, etc. Additional reforms that are currently implemented or will soon be implemented include: modernisation of curricula, use of standardised curriculum-based external examinations and evaluation, strengthened quality of assurance bodies, expansion of IT capacities at Universities and opening of new universities, etc.

Apart of these measures focused on addressing long term unemployment and reducing impediments, in order to increase the opportunity for employment to some vulnerable categories and stimulate job creation as well as employment of the young population, the government adopted an Annual programme of active measures for employment.


With regards to the sustainability of the implementation of the Operational Program on Active Employment Policies and Measures 2007 the Agency of Employment prepared a Report that gives the following data:

  • Out of the total number of employments with the realisation of the active measure - Support to self-employment (family business), until 31 July 2008 inclusive, 475 persons (95%) are still employed.

  • Following the completion of the active measure - Support to the first employment of young persons up to 27 years of age, effects in terms of employment were the following: out of the total of 600 volunteers covered under this measure, 116 persons were part-time employees, and 40 persons were full-time employees. According to UNDP data, 90% of these persons are still employed.

  • Regarding the measure Subsidizing the employment of single parents, handicapped persons and children without parents - Out of the total number of realised employments in 2007 - 69 single parents, i.e. 3 children without parents, 51 single parents (74%) and 2 children without parents are still employed as of 31 July 2007 inclusive.

With regards to the implementation of the Operational Program on Active Employment Policies and Measures 2008 the following have been realised by 31 July 2008:



  • Subsidising employment of children without parents - Regarding the support for employment of 50 registered unemployed persons having the status of child without parents, after leaving the social sheltering institution and the foster families, financial support is envisaged for the employers in the amount of Denar 15,000.00 monthly for salary and salary contributions, food and travel allowance per person for a period of 9 months. So far, 5 employment contracts have been concluded.

  • Subsidizing employment of single parents - Regarding the support for employment of 200 single parents, financial support is envisaged for the employers in the amount of Denar 12,000.00 monthly for salary and salary contributions, food and travel allowance per person for a period of 6 months. So far, 95 employment contracts have been concluded regarding this target group

  • Regarding the measure Training and advices to unemployed persons regarding re-qualification, contacts with employers, improving the knowledge and skills, computer training, etc. By of 31 July 2008 inclusive, 1,906 persons (75%) are still employed. 2008 Operational plan for active employment programmes and measures again envisages this employment programme, covering 3,000 unemployed persons and envisaging Denar 54,000,000.00. By 31 May 2008 inclusive, 98 programmes for preparation for employment (training, re-qualification or additional qualification) were realised. So far, this measure covered 1,358 unemployed persons, i.e. 45.27% of the planned number. 930 unemployed persons out of them completed the training, re-qualification or additional qualification, 621 persons or 66.8%, following the completion of the preparation for employment, got employed.

  • In 2008, trainings for unemployed persons for acquiring knowledge and skills foreign language and computers are implemented as a regular activity in the job clubs, intended for strengthening the capacities of the unemployed persons according to the demands on the labour market and increasing their competitiveness and the possibilities for faster employment. According to the Operational plan for active employment programmes and measures, Denar 1,900,000.00 in envisaged for this measure. Employment centres encompassed 1,065 persons (734 women) in this type of trainings, as follows:

  • trainings in foreign language for 483 persons (353 women), 343 persons (262 women) out of which successfully completed the trainings, while for the other persons the trainings are still on-going;

  • trainings in acquiring knowledge and skills for computers for 582 persons (381 women), 370 persons (261 women) out of which successfully completed the trainings, while for the other persons the trainings are still on-going.

With regards to the implementation of the project for self-employment loans the following have been realised by 19 September 2008:



  • As regards the measure Support to self-employment with crediting as of 1 March by 19 September 2008, the employment centres have received 4195 applications for employment of 5028 persons (31% women), out of which 76% are aged 28-55, 17% are under 27, and 7%are above 55. Most of the applications are for agriculture (39%) and trade (23%) and as regards the required loan amount almost 84% of the applications are for the amount of 3000 Euro.

  • After completing the selection procedure, 2064 applications were approved for employment of 2421 persons (29% women), out of which 78% are aged 28-55, 16% are under 27, and 6% are above 55. Most of the approved loans are for agriculture (45%) and trade (17%) and as regards the approved loans amount almost 83% of the loans are amounting 3000 Euro.

In July the Law amending the Law on health insurance was adopted by the Parliament and published in Official Gazette of RM No.82/2008. The Law decreases the minimum base for calculation of the health insurance contribution from 65% to 50% of the average monthly salary.


Additionally, the Government has decided to gradually lower the rates of social contributions (the pension and disability contribution, health contribution, and the employment contribution) as of 1.01.2009. The plan envisages to gradual lowering of the rates as follows:




Present rate

2009

2010

2011

employment contribution

1.6%

1,4%

1.2%

1.0%

pension – disability insurance

19.00%

16.50%

15.06%

14.63%

health insurance

9.2%

7.5%

7.0%

6.0%

In terms of the priority VIII to ENHANCE THE GENERAL BUSINESS ENVIRONMENT BY FURTHER IMPROVING THE RULE OF LAW, STRENGTHENING THE INDEPENDENCE OF REGULATORY AND SUPERVISORY AGENCIES, SPEEDING UP LEGAL PROCEDURES AND CONTINUING REGISTRATION OF PROPERTY RIGHTS


The project of the regulatory guillotine is advancing well. Based on the overall recommendations and analysis, the Government has adopted three sets of measures (two in July and one in November 2007), scoping around 64 Laws and 481 by-laws.
The measures included decrease of statutory time limits for various licenses and permits; reduction of forms and documents including promotion of electronic data interoperability; cut of fees and tariffs including those set under the Law on Administrative Fees and those related to Central Registry Cadastre and other institutions (in some cases by 50%); introduction of “silent is consent” principle. By decree, all laws and bylaws from the period of ex-Yugoslavia which are not in compliance with the legislation of Republic of Macedonia were abolished.
39 laws have been adopted by the Parliament. Out of the remaining 25 laws reviewed within the guillotine, and after comprehensive consultations with the relevant ministries, it was concluded that 3 of them could not be amended within the guillotine and additional 10, dating back to the period of former Yugoslavia, could be abolished. Regarding the other laws, a more detailed analysis is required prior to their amendment. As a result of the guillotine, 349 bylaws have been eliminated and 14 amended. From the remaining 118 bylaws, 108 are dated from the period of former Yugoslavia and their abolishment requires preparation of new bylaws (in order to avoid legal vacuum they need to be replaced by new regulations). Amendments to the final 10 bylaws depend on the adoption of the relevant laws.
Second phase of the regulatory reform has started with the introduction of RIA mechanism. Legal framework for RIA is introduced in March 2008 through amendments to the Government Rules of procedures and with by-law for RIA Methodology. In the Process of planning, each ministry prepares plan for every draft law included in the Annual Program of the Government. In the parallel with the consultation process, preparation of the initial or full RIA is carried out. Consultations will be made through direct meetings with stakeholders as well as through commenting via Electronic register of regulations. Each ministry has obligation to prepare initial or full RIA report. Ministries according to the criteria in the Methodology and complexity of the law, decide whether initial or full RIA will be prepared. Draft law can not pass the government procedure without RIA report
During the reporting period, the Sector for economic policies and regulatory reform, with the support of GOFRE, undertook a series of groundwork activities for the implementation of one pilot project - introducing Regulatory Impact Assessment on Law on Court Fees. In September a working group was set up for the implementation of the Law on Court Fees, comprised of representatives form the Sector of Economic Affairs and Regulatory reform, the Ministry of Justice and the Ministry of Finance. The local consultants that have been involved in the process of establishing a new Methodology and guidelines for RIA, support the process of preparation of the pilot RIA. In order to improve the transparency in the process of preparation of the Draft Law on Court Fees, beside the regular consultation process, other relevant stakeholders that will be identified during the preparation of RIA will be invited to take part in the consultations.
The Law Amending the Company Law was adopted by the Parliament envisaging simplified procedures for business close up that are under liquidation procedure and also introducing voluntary liquidation. (Further cutting formalities in the registration procedure, namely two personal statements by the founding members were released of the notarisation requirements: statement by founder of the company on claiming that all steps of founding were carried out according to the Company law and that the conditions under the law which prohibit particular individuals to be founders of company do not apply.)
With regards to the implementation of the Bankruptcy Law and its by-laws in September 2008 the Ministry of Economy prepared an update on the detailed analysis (prepared in June) that gives an overview of the bankruptcy procedures containing the following information: Laws that regulate bankruptcy proceeding in the Republic of Macedonia, Bankruptcy trustees, Trend of the number of bankruptcy trustees, Distribution of bankruptcy proceedings of bankruptcy trustees, Bankruptcy proceeding, Initiation of bankruptcy proceedings according to the proposing authority, Courts, Bankruptcy procedures distributed in courts, Duration of initiated bankruptcy proceedings, Reasons for prolongation of bankruptcy proceedings, Manner of conducting bankruptcy proceedings, Some financial indicators under bankruptcy proceedings, Bankruptcy proceedings according to the RM Central Register data. (Annex Analysis of the bankruptcy procedures- status September 2008)

According to the Analysis, the Ministry of Economy, from the begging of the year 2008, constantly collects data for every bankruptcy procedure from the licensed bankruptcy trustees, based on which, a database is created that contributes for making conclusions and determining directions for further activities. Through the bankruptcy trustees and the Bankruptcy committee until 15 September 2008, the following data has been collected - for 315 bankruptcy procedures that are still running and for 154 finalised bankruptcy procedures. That means that subject to analysis are 469 bankruptcy procedures.

In order to see the trend of settling the bankruptcy procedures, starting from 01.01.2006, the following table is given:


Bankruptcy procedures

Year

Unsolved

Of them - finalised

Percentage

Chain increase

2006

203

28

13.79

100.00

2007

173

27

15.61

113.15

2008

148

16

10.81

138.53

The given data show that from 203 unsolved bankruptcy procedures on 01.01.2006, in the year 2006, 28 are finalized or 13,79%; from 173 in the year 2007, 27 are finalized or 15,61%; from 148 in the year 2008 until June (half year), 16 are finalised or 10,81%, which will indicate to 21,62% annually. The data indicate that there is continuous increase of settling bankruptcy procedures of average 18,58% annually.


Regarding the application of simplified customs procedures for small and medium-sized enterprises, especially for enterprises that have inward processing approvals, the following has been realised:



  • The Law on Administrative Fees has been amended, and therefore the fees for receiving different customs approvals (inward processing approval, approval on storage in customs warehouses, approval for simplified procedures), significant sums (that reached up to 60 000 denars), have been brought down to symbolic amounts (300 to 500 denars). This measure lowers the direct costs of the companies implementing procedures with economic effect.




  • With every re-issuing, the term of validity of the inward processing approvals are extended. Thus, the first inward processing approvals were issued with a term of validity of one year, the second ones with a term of validity of two years, and the next ones, that are to be issued in 2009, shall be issued with the maximum term of validity prescribed by law - three years.




  • When issuing an inward processing approval, a tariff number (4 digits) shall be used instead of a tariff code (8 digits), for describing the good of the procedure for approvals that do not require proving the economic circumstances i.e. a classical loan system used by most of the companies. The use of the tariff code (8 digits) cannot be avoided for approvals where the economic circumstances are to be proved (when it is not a classical loan), because the proving of these circumstances requires a precise description and classification of goods; however, this applies to a small number of approvals only.




  • The holders of the inward processing approvals have the possibility to transfer the goods that practically allows for export of the goods to be carried out only through an export procedure instead of an export-transit procedure. When implementing an export-transit procedure, the holders of the approvals were burdened with additional costs due to the requirement for transit guarantee, which they no longer require.




  • The simplification and acceleration of the procedure for accepting the guarantees (the procedure of providing evidence is carried out by the Customs Administration) has been ensured, as well as the elimination of the discretionary authority of the Customs Administration, in lack of transparency, to determine the amount of the bank guarantee (instead of defining the amount of the bank guarantee, the amount of the potential debt regarding the received bank guarantee, has been limited). At the same time, the possibility of exercising the right to reduced bank guarantee ensures the decrease of the economic operators’ costs for provision of bank guarantees (mortgages, banking commissions etc.). The amount of the guarantee can be lowered to 0, but many holders of approvals do not fulfil the conditions for 0 guarantees that are completely logical (for example, paid health and pension insurance for the employees and paid VAT i.e. having no debts towards the state). In principle, all companies have guarantees decreased up to 50%; many companies have smaller amounts (30% and 10%).




  • The problem regarding the bank guarantee for the waste resulting from the inward processing procedure is now overcome. Due to problems in the monitoring system for bank guarantees, the release of the bank guarantee amount after waste destruction has been late and irregular. As a temporary solution, the amount for the waste destructed is being released from the bank guarantee by submitting the customs declaration for destruction of goods; a new system for monitoring bank guarantees is being tested at the moment, having the guarantees updated in real time. Generally (nearly, with no real exception), the waste is destructed and the companies do not pay the state any duties for the same.




  • A Decree on Enforcement of the Customs Law (to be submitted to the Ministry of Finance) has been prepared incorporating these changes, providing the amending and issuance of the approvals for inward processing to be made within the customs offices, instead of the Customs Administration. After modifying the Decree, amendments to the Guidelines on inward processing shall follow, simplifying and adjusting to the modification of the Decree. Following these modifications, the time period necessary for issuance or amending the approvals shall be significantly reduced, because only the submission of documents from the customs offices to the Customs Administration and vice versa, as well as its processing in the two archives accordingly can sometimes last for a week. A new manner of issuing the approvals is expected to be applied with the next re-issuing of the same, starting from the beginning of 2009 for the biggest number of holders of inward processing approvals.




  • With the purpose of simplifying the customs formalities and customs procedures, the Customs Administration has amended the Guidelines on Customs Debt thereby eliminating the mandatory submission of the original form PP50 to the customs declaration, as an evidence for the payment of the customs and other duties. Therefore, the customs procedure is faster and simplified because the importers do not lose time and money for procuring and presenting a written document for payment of import duties; the evidence for the paid import duties the customs officers need is now provided through the electronic information system.




  • With the purpose of facilitating import and export operations, the Customs Administration is continuously taking measures regarding the internal organisation. For example, a new possibility of import clearance on the border crossings Bogorodica and Novo Selo is introduced, in duration of eight hours, whereas export clearance on these crossings is being carried out continuously (24/7). Also, the possibility of import, as well as export clearance in duration of 12 hours per day is being introduced on the border crossing Delcevo. Increasing the number of border crossings whereby export clearance is possible is foreseen.




  • BEAR USAID project is currently ongoing, regulating the electronic records of the inward processing procedure. The software is being tested at the Customs Office in Stip. The application of this software will provide electronic submission of documents from the holders of approvals to the monitoring services as well as electronic data processing, thereby meaning that the work for the holders of approvals and monitoring services will be greatly facilitated and the need of paper documents in the procedure will be significantly reduced.

In order to strengthen the financial independence of the regulatory and supervisory bodies, amendments of the Law on Budget and Law on Budget Execution were adopted by the Parliament in July. These amendments allow regulatory bodies to decide for spending the budget for new employments without requesting approval from the Ministry of Finance. Thus, regulatory bodies and supervisory bodies increase their level of independence.


The director of the Agency for Electronic Communications has been appointed in a transparent and competitive manner.
By 25th September 2008, decisions according to which the Real Estate Cadastre is established on 80,15 % of the territory of the Republic of Macedonia were published in Official Gazette of the RM no. 121.
According to the Law on Real Estate Cadastre the Agency for Real Estate Cadastre acts as a successor of the State Authority for Geodetic Works. The Statute of the Agency for Real Estate Cadastre was approved by the Government on 12.08.2008. The preparation of the by-laws is well advancing, out of which 8 were enacted (Official Gazette of 19.09.2008). .


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