28 August 2024 –

A recent report by the Kosovo Law Institute reveals that, while Kosovo has not yet signed the United Nations Convention against Corruption (UNCAC), it has demonstrated a solid commitment and effort to build a legal and institutional infrastructure to combat corruption through legislative measures in line with UNCAC principles. However, despite the ongoing adoption of anti-corruption laws and policies related to the prevention of corruption and asset recovery (UNCAC Chapters II and V), significant challenges persist in their effective implementation. The report is intended as a contribution to the UNCAC implementation review process in its second cycle, produced with technical and financial support from the UNCAC Coalition.

Despite the political willingness to regulate the legal framework for preventing and combating corruption, in practice, law enforcement institutions have fallen short of delivering the desired results. Additionally, Kosovo is currently failing to offer a strategic and systematic approach to combating corruption, largely because there has been no State Strategy against Corruption in place since 2019.

While there have been some improvements in adopting new regulatory frameworks, progress in implementing anti-corruption legislation remains limited. Major reforms, such as the judicial vetting process and the reform of the Kosovo Prosecution Council, have not been implemented yet despite their pressing importance. The report emphasizes that recent efforts to reform the justice system and other law enforcement institutions were not carried out in accordance with the Constitution. Consequently, the Constitutional Court has ruled many of these enacted laws as unconstitutional.

Kosovo has a solid legal framework for asset recovery, thanks to the Code of Criminal Procedure and the Law on Extended Powers for the Confiscation of Assets. These laws allow for criminal confiscation and pave the way for non-conviction-based asset confiscation. Yet, the implementation of such legislation is inexistent. Moreover, there is a contentious approach towards approving a new system for verifying and confiscating unjustifiable assets. Recently, the Constitutional Court determined that the Law on the Bureau for the Verification and Confiscation of Unjustified Assets is not in compliance with the Constitution.

For all the detailed findings, read the full civil society parallel report in English. A translated Albanian version of the report is available as well.

Main findings

Preventive Anti-Corruption Policies and Practices

Kosovo has taken essential steps to establish a comprehensive legal framework to prevent corruption. Key steps include the adoption of the Law on the Prevention of Conflict of Interest in the Discharge of a Public Function and the Law on Protection of Whistleblowers, both aimed at preventing corruption and increasing public sector integrity. Additionally, both the Criminal Code and the Code for Criminal Procedure define specific forms of corruption offenses and provide a procedural framework that ensures fair and efficient criminal proceedings.

However, effective implementation of the legal anti-corruption framework is still not at the desired level. The establishment of a legal infrastructure to prevent and combat corruption, particularly regarding those of high-profile cases, has failed to deliver the desired results. Since 2019, Kosovo has lacked an anti-corruption strategy, leading to a disorganized approach to combating corruption. Recent attempts to develop such a strategy have produced a document that undermines the essence of constitutional institutional regulation in the Republic of Kosovo.

Preventive Anti-Corruption Body or Bodies

The Agency for the Prevention of Corruption (APC) is Kosovo’s main independent body tasked with implementing state anti-corruption policies at the prevention level. Its mandate encompasses the oversight and verification of asset declarations, prevention and supervision of conflicts of interest, regulation of gift acceptance, and safeguarding whistleblowers. Through these functions, the APC strives to enhance transparency and integrity in the public sector. However, the anti-corruption framework remains incomplete, with gaps in implementing integrity plans within public institutions, anti-corruption proofing of legislation, and conducting thorough risk assessments.

Public Sector Employment

Public sector employment in Kosovo is primarily governed by the Law on Public Officials, but some articles have been declared unconstitutional and annulled. Despite this, the Government continues its efforts to amend the Law on Public Officials in defiance of the Constitutional Court’s judgment. Despite adopting a new strategy framework for public finance management and public administration reform, tangible improvements have been elusive. Additionally, despite Kosovo’s recently established Institute for Public Administration providing professional training for its officials, the public administration continues to struggle with operational inefficiencies and political interference.

Political Financing

The adoption of the Law on Financing of Political Entities in 2010 marked a milestone for Kosovo. However, despite multiple amendments, most recently in 2022, ensuring transparency and accountability in political funding remains a challenge. A notable development occurred with the latest amendment, which shifted the responsibility for auditing political entities from the Parliamentary Assembly to the newly established Office for the Registration, Certification, and Financial Control of Political Entities at the Central Election Commission. While these legal changes align with global recommendations, effective enforcement is needed to achieve greater transparency and accountability in political financing.

Codes of Conducts, Conflict of Interest, and Asset Declaration

Kosovo’s legal framework includes rules on codes of conduct, conflicts of interest, and asset declarations, with the APC tasked as the central authority to oversee and enforce these provisions. Public officials are required to avoid all conflicts of interest and to declare their assets in a timely manner. The APC’s selective approach to handling conflicts of interest in the appointment processes of high-level officials has raised cause for concern. Despite the publicity of asset declarations and the APC’s authority to conduct thorough investigations into asset declarations, its results have been insufficient. The justice system’s contribution by inadequately addressing violations and imposing weak penalties for non-declaration has created a culture of impunity.

Reporting Mechanisms and Whistleblower Protection

The Law on the Protection of Whistleblowers enshrines a framework for reporting mechanisms and whistleblower protection in Kosovo’s public and private sectors. It categorizes types of whistleblowing (internal, external, and public) and outlines protections for whistleblowers and confidentiality of reports, even though practical challenges remain. This legal framework has raised public awareness and increased the number of whistleblowing cases reported to the APC. Despite these positive developments, no major success cases have been reported, and there have been instances where whistleblowers faced retaliation from public institutions.

Public Procurement

In Kosovo, contracting authorities must adhere to the Law on Public Procurement, which aligns only partially with the EU’s 2014 public procurement directives. The Regulatory Commission for Public Procurement oversees procurement, while the Procurement Review Body handles complaints about legal violations, though inefficiently.

While an e-procurement system is in place, the current law’s lack of e-procurement provisions has led to practical challenges, highlighting an urgent need for new legislation and improved e-procurement measures. The approval of the new draft law for public procurement has been postponed up to six times since 2020, when it began to be drafted. Finalizing the draft is essential to establish legal guidelines addressing practical challenges in e-procurement and to resolve efficiency issues concerning the Procurement Review Body.

Management of Public Finances

Kosovo’s public financial management relies on the Law on Public Financial Management and Accountability, which has undergone six amendments since its adoption in 2008. While Kosovo’s financial regulations align with international standards, oversight remains problematic. Despite the positive work carried out by the National Audit Office (NAORK), instances of conducting non-financial audits have been identified, which exceeded the NAORK’s competencies and impacted the independence of constitutional institutions that manage the justice system.

Access to Information and the Participation of Society

The right to access information and public participation is guaranteed under Kosovo’s Constitution and supported by the 2019 Law on Access to Public Documents and the Regulation on Public Consultation. The legislation on access to information is widely in line with EU standards, but data on institutional compliance remains unsatisfactory.

The government has issued a regulation that outlines explicitly the obligations related to public involvement in legislative processes. However, in many cases, these obligations have not been implemented. Furthermore, Kosovo’s Constitution and the Law on Legislative Initiatives provide for the right of legislative initiative, but this method has seen very limited use.

Judiciary and Prosecution Services

In Kosovo, the judicial and prosecutorial systems operate independently under constitutional mandates, with the Supreme Court as the highest judicial authority and the State Prosecutor handling criminal cases. The Kosovo Judicial Council (KJC) and the Kosovo Prosecutorial Council (KPC) oversee these bodies. However, since April 2022, the State Prosecutor’s Office has been led by an Acting Chief State Prosecutor, and there are concerns about the KPC’s internal accountability. Currently, the Prosecutorial Council, as confirmed by the Venice Commission, has a corporatist composition, which underscores its urgent need for reform. Nevertheless, it has yet to be implemented. The effects of this corporatist structure have also been observed in practice, where monitoring of the prosecutorial system revealed a significant lack of transparency and accountability. Despite these challenges, the Kosovo Judicial Council is currently operating more effectively, with recent progress noted in accountability and transparency within the judicial system.

Private Sector Transparency

Kosovo has made progress in enhancing private sector transparency through the Law on Business Organizations, which outlines business types and registration procedures. However, an updated business law is needed to align more closely with EU standards and improve corporate transparency. A draft law for the register of beneficial owners, approved in its first review in 2023, was recently withdrawn from the agenda to allow for further consultations. This decision was influenced, for instance, by the contentious matter of including NGOs as beneficiaries.

Measures to Prevent Money Laundering

The Law on the Prevention of Money Laundering and Financing of Terrorism (LPMLFT) establishes the Financial Intelligence Unit (FIU-K) as a central, independent institution tasked with requesting, receiving, analyzing, and disclosing information on potential money laundering and terrorist financing. The law also lists ten categories of reporting entities and assigns them specific reporting obligations. In addition, Kosovo’s legal framework includes the Criminal Code, and the National Strategy for the Prevention and Combating of the Informal Economy, Money Laundering, Financing of Terrorism and Financial Crimes 2019-2023.

Nevertheless, Kosovo needs further legal development to meet international standards. In practice, there is a backlog in money laundering prevention, investigation, and prosecution. The country’s authorities still lack a comprehensive understanding of the dangers associated with money laundering and terrorism, and judges and prosecutors lack staff and resources. Additionally, stronger inter-institutional cooperation and higher efficiency in handling cases are required.

Asset Recovery

Kosovo’s asset recovery framework, supported by the Code of Criminal Procedure and the Law on Extended Powers for Confiscation of Assets, aims to enable asset confiscation without a criminal conviction. However, debates around the Draft Law on the State Bureau for the Verification and Confiscation of Unjustifiable Assets and ongoing reviews by the Constitutional Court reveal significant challenges. In practice, the disparity between asset freezing, seizing, and confiscation presents a real challenge. The Constitutional Court found that the Law on the State Office for Confiscation of Unjustified Assets is incompatible with the Constitution, thus declaring it unconstitutional in its entirety.

Key recommendations 

In its report, Kosovo Law Institute makes several recommendations to the authorities to ensure the full implementation of UNCAC standards in Kosovo, among them:

1. Finalize and approve the State Strategy against Corruption.
2. Adequately implement the Law on Declaration, Origin, and Control of Assets and Gifts.
3. Implement Constitutional Court judgments and refrain from political attacks against the Constitutional Court and judiciary.
4. Adopt laws in accordance with the Constitution.
5. Enact the Law on Supplementing and Amending the Law on the Prosecution Council of Kosovo to address corporatism within the prosecutorial system.
6. Develop the vetting process for judges and prosecutors in line with the Venice Commission’s legal opinion and Constitution recommendations.
7. Promote transparency in lawmaking and policy development through an active public consultation process, in line with Government Regulation No. NR. 17/2024.
8. Implement political finance legislation and raise awareness of campaign financing regulations.
9. Impose sanctions for the non-declaration of assets in compliance with CCRK provisions.
10. Adopt and implement internal whistleblower procedures in public and private institutions.
11. The government and the Assembly shall approve the new law on public procurement.
12. Ensure public institutions comply with obligations arising from access to information legislation.
13. Stop the political pressure on media and non-governmental organizations.
14. Eliminate political interference by ensuring that public declarations do not interfere with the independence of the judicial and prosecutorial systems.
15. Approve the new law on business organizations to incorporate corporate transparency and reporting provisions.
16. Strengthen audit oversight structures to ensure comprehensive execution of their mandate.
17. Revise and strengthen the law on money laundering and terrorism financing, aligning it with international best practices.
18. Train judges and prosecutors on anti-money laundering to equip them to manage complex cases effectively.
19. Apply the Law on Extended Powers for Confiscation of Assets systematically when dealing with corruption cases.

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