Europaudvalget 2003-04
EUU Alm.del Bilag 178
Offentligt
Comprehensive monitoring report
on
the Czech Republic’s
preparations for membership
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A.
B.
INTRODUCTION ................................................................................................................................ 3
ECONOMIC ISSUES ........................................................................................................................... 5
1.
Economic developments ........................................................................................................... 5
2.
Implementation of recommendations for improvements........................................................... 7
COMMITMENTS AND REQUIREMENTS ARISING FROM THE ACCESSION
NEGOTIATIONS ................................................................................................................................. 9
1.
Administrative and judicial capacity....................................................................................... 10
Public administration............................................................................................................... 10
Judicial capacity ...................................................................................................................... 12
Anti-corruption measures........................................................................................................ 13
Translation of the acquis into Czech ....................................................................................... 15
2.
The chapters of the
acquis.......................................................................................................
16
Chapter 1: Free movement of goods....................................................................... 16
Chapter 2: Free movement of persons .................................................................... 18
Chapter 3: Freedom to provide services ................................................................. 19
Chapter 4: Free movement of capital...................................................................... 21
Chapter 5: Company law ........................................................................................ 22
Chapter 6: Competition policy................................................................................ 23
Chapter 7: Agriculture ............................................................................................ 24
Chapter 8: Fisheries ................................................................................................ 28
Chapter 9: Transport policy.................................................................................... 29
Chapter 10: Taxation .............................................................................................. 30
Chapter 11: Economic and monetary union ........................................................... 32
Chapter 12: Statistics .............................................................................................. 32
Chapter 13: Social policy and employment............................................................ 33
Chapter 14: Energy................................................................................................. 35
Chapter 15: Industrial Policy.................................................................................. 36
Chapter 16: Small and Medium-sized Enterprises ................................................. 37
Chapter 17: Science and research ........................................................................... 37
Chapter 18: Education and training ........................................................................ 37
Chapter 19: Telecommunications and information technologies ........................... 38
Chapter 20: Culture and audio-visual policy .......................................................... 39
Chapter 21: Regional policy and co-ordination of structural instruments.............. 39
Chapter 22: Environment........................................................................................ 41
Chapter 23: Consumer and health protection ......................................................... 43
Chapter 24: Justice and Home Affairs.................................................................... 45
Chapter 25: Customs Union ................................................................................... 48
Chapter 26: External relations ................................................................................ 49
Chapter 27: Common foreign and security policy.................................................. 50
Chapter 28: Financial control ................................................................................. 50
Chapter 29: Financial and budgetary provisions .................................................... 52
CONCLUSION................................................................................................................................... 53
C.
D.
STATISTICAL ANNEX.............................................................................................................................. 55
2
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A.
I
NTRODUCTION
The accession negotiations with the Czech Republic were successfully concluded on 13
December 2002 and the Treaty of Accession was signed on 16 April 2003. In a
referendum held on 13-14 June 2003, a majority of Czechs expressed their support for
membership of the European Union. Following ratification of the Treaty of Accession,
the Czech Republic will join the EU on 1 May 2004.
In its Strategy Paper “Towards the enlarged Union”, which accompanied the 2002
Regular Reports, the Commission stated that:
“Acceding countries need to implement the acquis by the date of accession, except in
cases where transitional arrangements have been agreed. Commitments undertaken
in the negotiations must be fully met before accession. The Regular Reports point to
a number of areas where further improvements need to be made in the context of the
political and economic criteria and in relationship to the adoption, implementation
and enforcement of the acquis. These should be vigorously pursued. In order to
analyse progress and to facilitate successful membership of the European Union, the
Commission will regularly monitor this and report to Council. The Commission will
produce six months before the envisaged date of accession a comprehensive
monitoring report for the Council and the European Parliament.”
The Copenhagen European Council in December 2002 concluded that:
“Monitoring up to accession of the commitments undertaken will give further
guidance to the acceding states in their efforts to assume responsibilities of
membership and will give the necessary assurance to current Member States.”
and the Thessaloniki European Council in June 2003 stated that:
“…the ten acceding States are encouraged to keep up their efforts so that they are
fully prepared to assume the obligations of membership by accession. This also
includes the necessary translation of the Community acquis. With a view to making a
success of enlargement, the monitoring of these preparations has been intensified on
the basis of reports submitted regularly by the Commission.”
As the accession date of 1 May 2004 draws closer, this report presents a comprehensive
state of play of the findings of the regular monitoring carried out by the Commission,
building upon the findings of the 2002 Regular Report for the Czech Republic. The
report contains two main parts.
The first part deals with economic issues. It describes briefly economic developments in
the Czech Republic, and then goes on to assess the implementation of the necessary
economic reforms in the areas highlighted in the conclusions of the 2002 Regular Report
for the Czech Republic as being in need of further improvements.
The second part gives an overview of where the Czech Republic stands in implementing
all commitments and requirements arising from the accession negotiations for each
acquis
chapter, both in terms of legislation and from the perspective of implementing
structures, including administrative capacity and enforcement. In view of their
importance for the implementation and enforcement of the
acquis,
the overall state of
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readiness of the public administration and the judicial system and the development of
effective anti-corruption measures are assessed in an introductory section to this part.
This report reflects the situation at the end of September 2003. It records decisions
actually taken, legislation actually adopted, measures actually implemented and
structures actually in place and functioning by that date.
For each chapter of the
acquis,
this report identifies the areas in which the Czech
Republic is expected to be, or is already, in a position to implement the
acquis
and the
areas where further action is still needed. Where relevant, the report also points out
issues where lagging or deficient preparations are a cause of serious concern. This
assessment starts from the premise that the Czech Republic must be fully prepared for
membership from the date of accession. In cases where transitional arrangements have
been agreed in the accession negotiations, their effect on the Czech Republic’s
obligations is duly reflected in the assessment.
Numerous sources of information have been used to compile this report. The Czech
Republic was invited to provide information on its state of preparedness. The Report also
draws on information provided by the Czech Republic within the framework of the
Association Agreement and the accession negotiations, as well as on peer reviews that
have taken place to assess its administrative capacity in specific areas. Council
deliberations and European Parliament reports and resolutions have been taken into
account in drafting it.
1
Where relevant, the Commission has also drawn on assessments
made by various international organisations such as the Council of Europe, the OSCE
and the international financial institutions, and by non-governmental organisations.
1
For the European Parliament the rapporteur is Mr Jürgen Schröder.
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B.
E
CONOMIC ISSUES
In its 2002 Regular Report, the Commission concluded that
“The Czech Republic is a functioning market economy. The continuation of its
current reform path should enable the Czech Republic to cope with competitive
pressure and market forces within the Union.
Improvements can be made as regards the management of public finance, in
particular by addressing the high and rising mandatory and quasi-mandatory
government expenditures. Reforms of social expenditure, such as pension and health
care schemes must be pursued. Furthermore, a more decisive approach towards
selling off bad assets of the Czech Consolidation Agency would free the economy of
misallocated resources.”
The principal purpose of this part of the Comprehensive Monitoring Report is to assess
the implementation of recommendations for improvements in the areas identified in last
year’s Regular Report. The focus is on the change since last year and not on the overall
degree of functioning of the market economy or degree of competitiveness. The
assessment can be found in Section 2. Section 1 briefly describes recent economic
developments in the Czech Republic including the continuation of the reform path since
last year’s Report.
1.
Economic developments
The Czech Republic has broadly maintained macroeconomic stability. However, public
finances have deteriorated
.
Despite the floods, the strengthened national currency
(koruna) and sluggish external demand, GDP growth remained at 2% in 2002. Both
private and public consumption and, to a lesser extent, exports have supported real GDP
growth. Household demand remained robust, growing in 2002 at a rate around 4%,
thanks to a sustained increase in disposable income supported by real wage growth.
Public consumption also increased, at a rate of 5.7%, driven by one-off expenditures in
military procurement, last year’s flood-related spending and high pressure from
unemployment and social payments. Fixed investment only went up by 0.6% in 2002. An
increase in export capacity and competitiveness counteracted the appreciation of the
national currency and weak external demand resulting in an increase of exports in 2002
by 3.8%. In 2002, inflation fell to 0.1% which was below the lower limit of the target
band set up by the monetary authorities. The survey-based unemployment rate decreased
over the last three years to 7.3% in 2002, however it started to worsen in the first quarter
of 2003. Registered unemployment remained high and kept rising. The employment rate
has slightly increased to 65.5%. The general government deficit in 2002 was 3.9% of
GDP. When the Czech Consolidation Agency (CKA) activity is taken into account the
deficit is estimated to rise to 6.7% of GDP (according to PEP 2003). An improvement in
the terms of trade (export prices were falling by 1.4% but import prices by 4.3%)
explains mostly why the trade deficit came down to 3.5% of GDP in 2002, two
percentage points lower than the previous year figure. The current account deficit
deteriorated to 5.3% of GDP in 2002, as the improvement in the trade balance deficit did
not offset the decrease in the surplus of the balance of services. As in the previous years,
the Czech economy continued to be able to finance those deficits thanks to FDI inflows,
which amounted to 13.4% of GDP for 2002.
Main Economic Trends
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Czech Republic
Real GDP growth rate
Inflation rate
- annual average
- December-on-
December
Unemployment rate
- LFS definition
General government
budget balance
Current account balance
per cent
per cent
per cent
per cent
per cent of
GDP
per cent of
GDP
million
ECU/Euro
Gross foreign debt of the
whole economy
- debt export ratio
Per cent
of exports
of goods
and
services
million
ECU/Euro
Per cent
of GDP
million
ECU/Euro
1998
-1.0
9.7
1999
0.5
1.8
2000
3.3
3.9
2001
3.1
4.5
2002
2.0
1.4
2003
latest
2.1 Q2
-0.2
August
a
-0.2
August
7.6 Q1
5.8
6.4
-4.5
-2.3
-1187
2.5
8.6
-3.7
-2.8
-1470
4
8.7
-4.0
-5.3
-2946
3.9
8.0
-5.5
-4.6
-2930
0.1
7.3
-3.9 p
-6.3 p
-4692
b
-2611
Jan.-July
b
36.2
10 778
36.2
11 326
41.2
16 042
37.5
16 960
:
:
Foreign direct investment
in flow
- balance of payments
data
4.8
2416
9.3
4792
:
:
8.6
5489
13.4
b
9889
b
2502 Jan.-
July
b
Sources: Eurostat. National sources. OECD external Debt Statistics
a
b
Moving 12 months average rate of change.
Source: Website of the Czech National Bank.
P= provisional figures
The Czech Republic continued on its reform path, albeit hesitantly.
According to
government plans, coal mines, electricity, petrochemical and telecommunication firms
are planned to be privatised. Coal mines in Northern Bohemia should be sold by the end
of 2003. The petrochemical holding Unipetrol will be again offered for privatisation as a
whole in a public tender to be held in 2004. Czech Telecom privatisation will not occur
before 2005. The government has postponed it due to the difficult international market
environment and with a view to increase potential privatisation receipts. Czech Airlines,
Czech Airports Authority, Czech Post and Czech Railways are not yet for sale. In order
to pave the way for privatisation, Czech Railways were transformed in January 2003 (the
Railway Route Administration responsible for the management of the state-owned
physical infrastructure and all liabilities, and Czech Railways, a public company,
responsible for running the business). Last January, the largest domestic steel-maker
Nova Hut Ostrava was privatised, after the restructuring plan for the Czech steel industry
was agreed upon. The government has amended the commercial code and is preparing a
new Bankruptcy Law. It also provided training to improve the skills of judges and
trustees involved in the process of liquidation and restructuring of firms under financial
distress. In particular, the regulation of the exit of non-viable firms to permit fast-track
restructuring has to be implemented. The government also introduced a new
administrative court circuit. Structural shortcomings in the labour market remain to be
tackled to allow for an effective reduction of the actual unemployment. Weaknesses, both
in the supply and demand side, were well identified in the Joint Assessment of the
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Employment Policy Priorities and the subsequent progress reports. Government policy
should find the right balance between structural reforms in the labour market and the
welfare system, on the one hand, and the priorities stemming from employment policy,
social integration and learning development, on the other. Other crucial issues which
continue to affect the labour market are the lack of geographical mobility caused
inter
alia
by underdeveloped transport infrastructure and the rent controls in the housing
market.
Main Indicators of Economic Structure in 2002
Population (average)
GDP per head
a
Share of agriculture in:
- gross value added
- employment
Gross fixed capital formation/GDP
Gross foreign debt of the whole
economy/GDP
c
Exports of goods & services/GDP
Stock of foreign direct investment
Long term unemployment rate
Source: Eurostat
a Figures have been calculated using the population figures from National Accounts, which may differ from those used in demographic statistics.
b Agriculture, hunting, forestry and fishing.
c Data refer to 2001.
d Data refer to 2000.
d
b
Thousand
PPS
Per cent of EU average
Per Cent
Per Cent
Per Cent
Per Cent
Per Cent
Million Euro
Euro per head
Per Cent of labour force
10.201
60
3.7
4.9
26.3
26.6
65.2
23352
2289
3.7
2.
Implementation of recommendations for improvements
The continued deterioration of the general government deficit led the government to
undertake steps towards the
consolidation of the public finances
and to present a set of
measures aiming at bringing the deficit down to 4% by 2006.
Last year’s Report pointed
to the need to address the high and rising mandatory and quasi-mandatory public
expenditures. The tendency towards expenditure increases appears to be present in other
areas of public spending. As mentioned before, the general government deficit in 2002 is
estimated at 6.7% of GDP, after the activities of the CKA were included. This limits the
leeway to let automatic stabilisers play, running the risk that the public budget may
become pro-cyclical, counter to the objective of medium term fiscal consolidation. Not
only the level of the deficit creates concerns, but also the structure of the budget. This
situation led the government to approve a package for reforming the Czech public
finances to save the equivalent of 3.6% of GDP spread over three years. The main
objective of the reform proposal is to reduce the public deficit to 4% of GDP in 2006, the
last year of the current legislature, from 7.6% estimated by the Czech authorities for the
year 2003. The government plans that 30% of the deficit reduction should be achieved
through revenue increases and 70% through cuts in expenditures, among them in salaries
of civil servants and in discretionary spending of individual ministries. The Lower
Chamber of Parliament approved the necessary laws on 26 September 2003. In addition,
the Parliament should approve medium term expenditure frameworks with the budget for
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the next year. The expenditure frameworks set a binding trajectory of general
government spending for three years. Spending by extra-budgetary funds would be
incorporated in the expenditure ceilings of responsible ministries.
A deeper and a more comprehensive reform affecting the social benefits and
the pension
system and healthcare
is needed.
In order to achieve long-term fiscal stability, further
measures have to be implemented, especially as regards mandatory and quasi mandatory
expenditures, social benefits and the pension system and healthcare reform. The current
pension system on a pay-as-you-go basis is planned to be modified from a defined-
benefit into a new defined-contribution one (Notional Defined Contributions -NDC
system) in which people could see their total contribution on their own accounts. The
health care system remains to be restructured in order to control costs and eliminate the
debts of the main health care facilities.
The Czech Consolidation Agency resumed the
selling off of bad assets
to private
investors. This process should accelerate in order to free the economy from misallocated
resources.
In 2002, the CKA was estimated to hold bad assets amounting to roughly 15%
of GDP at face value. Given this huge amount, the impact of the CKA activities on
public finances needs to be fully assessed. The Agency auctioned in September 2002 and
in June 2003 two bad asset packages, amounting in total to the equivalent of 4.4% of
GDP at face value. Despite this progress, questions remain concerning the transparency
of sales of bad assets.
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C.
C
OMMITMENTS
NEGOTIATIONS
AND
REQUIREMENTS
ARISING
FROM
THE
ACCESSION
As we approach the actual date of accession and the entry into force of the mutual rights
and obligations enshrined in the Treaty of Accession, it is necessary to focus efforts on
ensuring that the Czech Republic is fully prepared in all areas of the
acquis
from the start
of its membership. In other words, the Czech Republic must meet its commitments and
requirements arising from the accession negotiations.
In the 2002 Regular Report on the Czech Republic, the Commission found that:
“The Czech Republic is generally meeting the commitments it has made in the
negotiations. However, delays have occurred with regard to the full alignment of
public procurement legislation, completion of alignment regarding mutual
recognition of professional qualifications, adoption of parts of veterinary legislation,
and the completion of alignment of certain VAT and excise duties. These issues need
to be addressed.
Bearing in mind the progress achieved since the Opinion, the level of alignment and
administrative capacity that the Czech Republic has achieved at this point in time,
and its track record in implementing the commitments it has made in the
negotiations, the Commission considers that the Czech Republic will be able to
assume the obligations of membership in accordance with the envisaged timeframe.
In the period leading up to accession, the Czech Republic needs to continue its
preparations, in line with the commitments it has made in the accession
negotiations.”
As regards the administrative capacity to implement the
acquis,
the overall findings were
as follows:
“Overall, the administrative capacity of the Czech Republic has been strengthened
considerably. Efforts need to be pursued in particular as regards agriculture, the
environment, regional policy, justice and home affairs as well as financial control.
Special attention should be given to the structures necessary to ensure sound and
efficient management of EC funds. Currently ongoing activities, notably the
strengthening of the internal audit units through increasing human resources and
training, need to be vigorously pursued in order to attain full operational capacity
by accession.”
As part of its continuous monitoring, the Commission services addressed two letters to
the Czech Republic in March and June 2003 expressing concern over its preparedness in
the field of mutual recognition of professional qualifications within the chapter on free
movement of persons, the upgrading of agri-food establishments within the agriculture
chapter, the establishment of a central harmonisation unit within the financial control
chapter, and the alignment on VAT and excise duties within the taxation chapter, and
calling for urgent action to remedy these shortcomings.
In order to give further guidance to the Czech Republic in its preparation efforts and to
give the necessary assurance to current Member States and other future Member States,
this part of the comprehensive monitoring report, in Section 2, gives an overview of
where the Czech Republic currently stands in implementing all commitments and
requirements arising from the accession negotiations for each of the 29 chapters of the
acquis.
It covers the whole body of the
acquis,
on a chapter-by-chapter basis, both in
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terms of legislation and from the perspective of implementing structures, including
administrative capacity and enforcement.
The principal commitment undertaken by the Czech Republic in the accession
negotiations is to be fully prepared for membership in all areas by the date of accession.
In a number of areas, however, commitments were made to put in place and implement
the
acquis
according to specific timetables even before accession. This report examines
the extent to which these commitments have been met, and where delays have occurred,
but the principal focus of the assessment remains the requirement that the Czech
Republic must be fully prepared as from accession. Naturally, in cases where transitional
arrangements have been agreed, their effect on the Czech Republic’s obligations is duly
reflected in the assessment. On the other hand, it should be underlined that, in order for
the Czech Republic to make effective use of its eligibility for Community structural
funds from 1 January 2004, the relevant
acquis
in areas such as public procurement, state
aid and environmental protection will need to be fully respected from 1 January 2004 in
relation to the implementation of structural funds actions
2
.
For each chapter, a conclusion is provided, which is structured in the following way.
Firstly,
it identifies those areas where the Czech Republic is essentially meeting the
commitments and requirements arising from the accession negotiations and is expected
to be, or is already, in a position to implement the
acquis
from accession. This does not
exclude the possibility that certain actions are still to be taken, but these should under
foreseeable circumstances not pose particular difficulties.
In a
second
paragraph, the assessment identifies any areas where important further action
is still needed in order to complete preparations for membership. In some cases these
preparations are ongoing, but enhanced efforts or quicker progress may be called for.
These are issues which can still be remedied taking into account the accession date of 1
May 2004 but which require the special attention of the authorities.
Thirdly,
where relevant, the assessment also identifies issues that are of serious concern.
These are areas where serious shortcomings exist which are likely to persist after
accession unless immediate remedial action is taken. These issues require the urgent
attention of the authorities.
In view of their importance for the implementation and enforcement of the
acquis,
the
overall
state of readiness of the public administration and the judicial system and the
development of effective anti-corruption measures, together with the question of the
translation of the
acquis
into Czech, are evaluated in a separate Section 1.
1.
Administrative and judicial capacity
Public administration
As regards the structure of the
central state administration,
the basic principles are set
forth in the 1969
Act on Establishing Ministries and other Central Bodies of State
2
See also the Commission Communication "on the implementation undertaken by the acceding countries
in the context of accession negotiations on Chapter 21 - Regional policy and coordination of structural
instruments" of 16 July 2003 (COM(2003) 433 final).
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Administration,
which has been frequently amended. The Act lays down the
competencies and functions of the various departments. It currently identifies 15
ministries and 11 agencies of central administration.
The Czech Republic accomplished a significant step forward in May 2002 by providing a
specific legal framework for its civil service with the adoption of its Civil Service Act.
The act sets out the legal status of the central state administration officials and aims at
creating an independent, transparent, stable, liable, efficient, professional and non-
political public administration. The Act will improve professional standards through the
introduction of open recruitment procedures and training methods. To that effect, an
independent Institute of State Administration was established in July 2001. The system
of remuneration will be clarified and standardised, and should result in an improvement
of the salaries of civil servants.
However, the act sets forth a gradual implementation of its provisions during a transition
period, which extends up to two years from entry into force. Moreover, further delay will
occur as a result of the adoption by Parliament in July 2003 of a Government proposal to
postpone its entry into force to 1 January 2005 due to the financial burden caused by the
floods of 2002. This development is unfortunate, as the Czech Republic will enter the EU
with a central administration at the very early stage of its reform process.
Beyond the existence of a code of conduct and the introduction of specific internal
ethical norms, a proper degree of openness and transparency in the Czech public
administration has still not been fully reached. Thus, the obligation of transparency
embedded in the new act should create the legal basis for meeting this need and provide
the necessary incentives.
The rather strong hierarchy that characterises the Czech administration represents an
obstacle to the development of inter-service co-ordination and hampers planning and
policy-making. However, the establishment in June 2002 of the General Directorate for
the Civil Service should improve the allocation of human resources throughout the
administration through a process of “systematisation” which will determine the number
of civil servant posts and the funds earmarked for salaries in the ministries and other
bodies.
Overall, human resources standards have improved at central level, enabling thereby an
increase in the quality of administrative decisions. However, lack of prestige and
relatively low levels of remuneration weaken the ability of the administration to retain
employees. As a result, staff turnover is high and forces the different services to ensure
training for their newcomers more frequently.
As regards the reform of territorial public administration, the process of
decentralisation
to the regional and local level is now near completion with the abolition of the districts
on 1 January 2003. The 14 regions have received considerable powers notably in the
areas of education, health care, territorial planning and environment. Moreover, many
State administration competencies have been transferred from the 73 former districts
(okresy) to 205 newly established municipalities, including competence for the state
welfare system, issuance of building permits, management of construction proceedings,
environment, landscape protection, management of forests, hunting, fishing, waste, small
trades, and motor vehicle registers.
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Regional self-government is now provided through regional assemblies directly elected.
These assemblies elect the regional Presidents (hejtmans) and Councils, both executive
bodies of the Region. At the local municipality level, the elected municipal assemblies
elect municipal councils and Mayors.
Overall however, as a result of this transfer of competencies, the control of legality needs
clarification and so does the financial reform accompanying this change. Resources from
the regional budgets for the territorial self-governing units to assume their new autonomy
are not yet defined.
The officials of regional and municipal authorities are governed by the Act on Officials
of the Territorial Self-Governing Units adopted in June 2002. This Act aims to set up a
framework for professionalism and focuses on more transparent procedures and stringent
criteria for recruitment by strengthening continuous training of officials and increasing
standards of service to the public.
Judicial capacity
The Czech judicial system is composed of four main tiers: 86 district courts, 8 regional
courts, 2 high courts and the Supreme Court. In addition there is the Constitutional Court,
which may be addressed directly by citizens in some cases of violation of fundamental
rights. In January 2003, the Supreme Administrative Court was established, as required
by the Constitution. Together with the ‘administrative senates’ based at the regional
courts, this aims at ensuring the citizens' right of recourse against public actions.
Judges are nominated by the Ministry of Justice and appointed for life by the President of
the Republic. Certain state prosecutors are subject to a security vetting procedure. The
Ministry of Justice determines the number of judges and state prosecutors and their
promotion, and administers the budgetary resources of the judiciary. Judges’ salaries are
higher than those of other categories of civil servants and are set by Parliament. The
number of judges and state prosecutors has remained relatively constant: in May 2003,
there were 3 043 judges' posts of which 2 633 are filled, while the total number of public
prosecutors' posts is 1 250, of which 971 are filled.
The fundamental principle of independence of the judiciary is anchored in the Czech
constitution of 1993, although the Minister of Justice remains responsible for appointing,
transferring and terminating the appointment of the president and vice-presidents of
courts. The constitution sets forth a general principle of incompatibility, whereby judges
cannot hold high political office or have any other public function. Moreover, judges are
required to refrain from anything which might threaten the impartiality of their judicial
decision-making. With the exception of the Constitutional Court judges, judges are not
banned from joining political parties or movements. The constitution does not provide
for a system of immunity for judges.
The Act on Courts and Judges, which entered into force in April 2002, constituted a
move towards self-government of the judiciary by the creation of Judicial Councils
which have the status of consultative bodies at all court levels. The Act also created a
Judicial Academy, which began its operations in October 2002. The main objective of
the Academy is to provide life-long training to the judiciary, as well as supporting the 3-
year initial training of judicial trainees, who are obliged by law to attend 15 working
days training per year. Courses have thus far been organised on an
ad hoc
basis, but the
first full academic year will begin in autumn 2003.
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A complaint from the President of the Republic to the Constitutional Court, concerning
the division of powers and the independence of the courts, led to the annulment of certain
parts of the Act on Courts and Judges in 2002. This included provisions on the
compulsory evaluation of competence of judges and the compulsory nature of training of
judges in the Judicial Academy. The Act on Courts was amended in June 2003 to take
into account the objections of the Constitutional Court.
Access to justice is satisfactory, however not all citizens may be fully aware of their
entitlement. Legal aid is available both in criminal and civil cases, either by virtue of the
code of criminal procedure (free legal representation for defendants and victims) or by
request to the Chamber of Advocates under the Act on Attorneys.
The speed and efficiency of the enforcement of civil judgements have been significantly
improved since the establishment of the Chamber of Judicial Executors, which began
operating in 2001 under the Act on Private Bailiffs. 108 judicial executors’ posts have
been created and appear to be working efficiently.
A key area for further improvement remains the reduction in length of court proceedings.
According to recent statistics provided by the Ministry of Justice, the duration of
criminal proceedings in 2003 has actually worsened in most cases, compared to 2002.
3
However, one area where significant progress can be noted is in the processing of cases
before the commercial registry in Prague.
As regards administrative support for judges, staff shortages and a lack of financial
resources persist especially at district court level. As of May 2003, there were 700 higher
court officials, compared to 621 in 2002. Their training is ensured by a single school, the
academy for judges’ clerks, in Kroměříž (South Moravia).
Anti-corruption measures
According to the 2003 evaluation report of GRECO (Council of Europe Group of States
against Corruption), available indicators suggest that corruption remains a cause for
concern. The Czech Republic has taken a number of administrative and legal measures to
strengthen the fight against corruption. The legal instruments required by the
acquis
are
almost all in place, and the necessary structures within law enforcement agencies and the
judiciary have been created. However, the main problem remains the relatively
unimpressive results in the prosecution of corruption cases.
Following the introduction of the governmental programme on combating corruption in
1999, each Ministry had to draw up its own anti-corruption programme and appoint a co-
ordinator responsible for its implementation. Since April 2002, this requirement is now
being extended to administrative bodies other than ministries. The Ministry of the
Interior is the national co-ordinator of anti-corruption measures. The Ministry of the
Interior’s 2003 report on corruption drew attention to numerous defects in law and
practice concerning public procurement. Several ministries, especially the Ministry of the
Interior, have developed public awareness campaigns.
3
From January-April 2003, the duration of criminal proceedings was 271 days for cases in district courts
against 273 days in 2002; 766 days for cases in regional courts against 726 days in 2002. The duration
of civil proceedings was of 592 days for cases in district courts against 562 days in 2002; 277 days for
cases in regional Courts against 276 days in 2002.
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In 2002, 332 persons were charged with abuse of authority of a public official, 45
persons were accused of accepting bribes, 120 persons were accused of offering bribes
and 3 persons were accused of indirect bribery. Several hundred convictions were
secured in 2002.
In May 2003 the government approved its annual report on the fulfilment of its national
programme on combating corruption, which concluded that corruption is still
widespread. The report notes that corruption usually takes the form of abuse of power or
acceptance of bribes. The report sees little progress in the results of anti-corruption
measures and highlights the fact that corruption still continues to affect the proper
functioning of the state administration, the police (especially the aliens police and the
traffic police), healthcare, banking and the judiciary, and that it also influences the
political sphere. Consequently, the government decided to intensify its effort with the
planned introduction of several new measures.
The merger of two police services to form the Service for Criminal Police and
Investigation represented a significant step forward. This was completed with further
internal developments in April 2003, including in particular the merger of two
specialised services (the Department for Revealing Corruption and Major Economic
Crime and the Bureau for Financial Crime and Protection of the State). The merger was
accompanied by important improvements in working methods, which are likely to
enhance the effectiveness of the unit.
(See also Chapter 29 - Financial and budgetary
provisions)
The Ministry of the Interior has established an anti-corruption commission, which is
responsible for detecting corruption among Interior Ministry employees and police
officers. A special telephone hotline and e-mail address have been established to enable
citizens to submit complaints of corruption. However, the number of cases of corruption
detected remains extremely low. The Czech customs administration updated its Integrity
Action Plan which was first adopted in 2000. An Internal Inspection Unit was recently
established to combat corruption; two officers responsible for inspection have been
appointed to each regional directorate.
The Czech Republic is a party to the Council of Europe Convention on Money
Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and to the
Criminal Law Convention on Corruption, as well as to the OECD Convention on
Combating Bribery of Foreign Public Officials in International Business Transactions. It
also acceded to the Council of Europe Civil Law Convention on Corruption as of 1
January 2003. The Czech Republic continues to participate actively in the monitoring of
anti-corruption measures adopted by the OECD Working Group on bribery in
international commercial transactions. It joined GRECO, the Council of Europe Group of
States against Corruption, in February 2002.
GRECO adopted a report on the Czech Republic as part of its first evaluation round in
March 2003 in which nine concrete recommendations were made. GRECO expressed
concern about the breadth of immunity from criminal prosecution enjoyed by Members
of Parliament and recommended that clear criteria should be developed concerning when
immunity should be lifted. GRECO also noted that it had the impression that corruption
was more widespread than shown by the official data and that further measures should be
taken without delay to prevent undermining the economic, social and political
foundations of Czech society. In particular, GRECO drew attention to the low number of
successful prosecutions for corruption offences.
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Translation of the acquis into Czech
In accordance with Articles 2 and 58 of the Act of Accession, all acts adopted by the
Union’s institutions and the European Central Bank prior to accession become applicable
to the new Member States and are to be published in the Official Journal of the European
Union in the new official languages. While the EU institutions take responsibility for the
final revision and publication of the translations, it falls to the acceding states to produce
the translations and to ensure a thorough legal and linguistic revision.
The translation and revision of
acquis
acts provided by the Czech authorities has been
conducted efficiently and cooperation with the EU institutions has been smooth. The
number of Czech texts finalised by mid-September is high, between 25 and 30% of the
total volume and further voluminous uploads are expected soon. The quality of Czech
legal terminology seems to have been given sufficient attention.
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2.
The chapters of the
acquis
As indicated, the following review of the Czech Republic’s ability to assume the
obligations of membership has been structured in accordance with the list of 29
acquis
chapters. Accordingly, this section opens with an assessment of the
acquis
relating to the
cornerstones of the internal market which are known as the “four freedoms”, and
continues with a systematic review of each of the chapters, covering all aspects of the
acquis,
including sectoral policies, economic and fiscal affairs, regional policy,
environment, justice and home affairs, external policies, and financial questions.
Chapter 1: Free movement of goods
The principle of the free movement of goods implies that products must be traded freely
from one part of the Union to another. In a number of sectors, this general principle is
supplemented with a harmonised regulatory framework, following the “old approach”
(imposing precise product specifications) or the “new approach” (imposing general
product requirements). The transposition of harmonised European product legislation
represents the vast majority of the content of this chapter. In addition, efficient
administrative capacity to apply horizontal and procedural measures in areas such as
standardisation, certification and market surveillance is essential. This chapter also
covers detailed EC rules on public procurement, requiring specialised implementing
bodies.
Framework legislation for the
horizontal and procedural measures
necessary for the
administration of the
acquis
in the new approach sector is in place, as are the
implementing structures in the fields of standardisation, metrology, accreditation,
conformity assessment and market surveillance. The national standardisation body, the
Czech Standards Institute (ČSNI), is a full member of both CEN and CENELEC and is
the national representative organisation in ETSI. Legislation on the procedures for
provision of information in the field of technical regulations is in place. Market
surveillance structures are satisfactory.
The Czech Republic has transposed the
sectoral legislation
under the
new approach
and in general alignment has been found to be satisfactory. New legislation on the safety
of toys and on explosives for civil use has now been adopted.
The Czech Republic has transposed most of the
old approach
directives. However, the
acquis
on wood has not yet been transposed. Amendments to the Act on Metrology and a
new Act on Chemicals were adopted. Having recognised that the identification of "new"
chemical substances on its market is a matter of priority, the Czech Republic should
provide for the appropriate notification of such substances in accordance with the
acquis.
Legislation in the areas of fertilisers, drug precursors, pharmaceuticals, cosmetics,
textiles and glass has been adopted. Implementation structures are in place and
essentially satisfactory. Minor amendments are being made to the Act on Consumer
Protection in relation to transposition of the
acquis
on footwear and to legislation on
motor vehicles and wheel tractors. In the area of pharmaceuticals, the Czech Republic
has not yet completed the revision of marketing authorisations nor preparations for the
application of EU centralised procedure and mutual recognition of national
authorisations. The Czech Republic is carrying out improvements to implementation on a
continuous basis, but particular attention should be paid to medicinal products and
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cosmetics. Preparations for Czech participation in the RAPEX information system on
dangerous products are ongoing.
Transposition of the foodstuffs
acquis
is almost complete, though further amendments to
framework legislation (notably for the deletion of the pre-market approval for food for
particular nutritional uses) and to national measures on labelling, official control
irradiation, novel foods, labelling of genetically modified foodstuffs and monitoring of
temperatures are necessary to ensure full alignment. Gradual administrative
strengthening (from a high base) continues at the State Veterinary Administration, which
is the main supervisory body for animal-origin foodstuffs, and at the Czech Agricultural
and Food Inspection (CAFI) under the Ministry of Agriculture, which is in charge of
such issues as official control on contaminants, pesticide residues, food hygiene in
processing plants and labelling. Further efforts are still needed to: ensure that Hazard
Analysis Critical Control Points (HACCP) is enforced at all stages and that overall
strategy and co-ordination between implementing bodies is ensured; improve the
procedures for handling alerts (RASFF); and guarantee effective controls concerning
food irradiation (and to adopt and implement the necessary labelling requirements).
Efforts by the Ministry of Health in the accreditation and specialisation of laboratories
and training of officials and inspectors following re-organisation should continue.
Aspects of food safety are also covered under
Chapter 7 – Agriculture.
The adoption of the Act on
Public Procurement
still needs to be finalised, to ensure
equal access for Community companies through abolition of the national preference
clause, alignment on remedies, transparency, time limits and thresholds.
The Ministry of Regional Development has overall responsibility for public procurement
legislation. The lack of qualified staff working at the ministry in this area should be
urgently addressed. The Office for the Protection of Economic Competition exercises the
surveillance of adherence to the Act on Public Procurement when awarding public
contracts. The level of administrative capacity seems sufficient. Staff in both
organisations, as well as in other relevant institutions (ministries, regional bodies, etc.)
will need re-training once the adoption of the new, aligned public procurement act is
finalised.
In the
non-harmonised area,
the Czech Republic has conducted a screening of national
legislation possibly in contradiction with the principle of free movement of goods. An
inter-ministerial group has been established to oversee identification and removal of any
such obstacles. This screening must continue and the identified barriers must be
removed. Potential obstacles to the free movement of goods posed by the legislation
should primarily be solved by inclusion of mutual recognition clauses. Czech legislation
ensures inclusion of such clauses in all new laws regulating non-harmonised areas. The
Ministry of Industry and Trade is responsible for ensuring the insertion of these clauses
in existing legislation, but there remains some uncertainty as to how this will be effected.
The
acquis
on arms and ammunition has been transposed. The
acquis
concerning cultural
heritage objects has been largely transposed. Preparations have been made to apply the
rules on product safety checks at external borders from accession. Administrative co-
operation arrangements between customs and market surveillance authorities have been
set up and contact points appointed; however, the future activities of custom officers are
not yet specified, and this should be addressed.
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Conclusion
The Czech Republic is essentially meeting the requirements for membership as regards
horizontal and procedural measures, new approach sectoral legislation
and in the
non-harmonised area
and is expected to be able to apply this
acquis
from accession.
Attention should be paid to ensuring that remaining legislative steps are taken in good
time and that administrative preparations are finalised. In the non-harmonised area,
attention must be paid to inclusion of mutual recognition clauses into the existing
legislation.
The Czech Republic is meeting the majority of the requirements for membership as
regards
old approach sectoral legislation
and
public procurement.
Further efforts are
still needed to complete alignment and implementation of legislation in the area of
foodstuffs. Additional efforts should be made to provisionally notify "new" chemical
substances prior to accession so as to ensure the continued marketing of such substances.
In the area of public procurement, legislative alignment must be finalised. After that has
been accomplished the required implementing measures, administrative preparations and
training must be effectively pursued.
Chapter 2: Free movement of persons
The
acquis
under this chapter provides for non-discriminatory treatment of workers who
are legally employed in a country other than their country of origin. This includes the
possibility of cumulating or transferring social security rights, which requires
administrative cooperation between Member States. In order to facilitate the practice of
certain professions, the
acquis
under free movement of persons also includes specific
rules concerning mutual recognition of qualifications and diplomas; for certain
professions a harmonised training curriculum must be followed to be able to use the
professional title. Furthermore, this area also covers the residence and voting rights of
EU citizens in any Member State.
Significant work remains to be done in the field of
mutual recognition of professional
qualifications,
where the Czech Republic’s legislation is not in line with the
acquis.
Legislation to transpose the general system of recognition and many of the sectoral
directives remains to be adopted. Particular efforts are needed to ensure alignment with
the relevant sectoral legislation on the recognition of qualifications of doctors, dentists,
pharmacists, general care nurses and midwives. Subordinate provisions, e.g. the training
curricula, also remain to be adopted. Requirements concerning veterinary surgeons have
only been partly transposed, an amendment aligning legislation on architects has been
adopted, and the transposition of the
acquis
on lawyers has been largely completed.
The Ministry of Education, Youth and Sports will be the central authority responsible for
co-ordination of administrative activities in the recognition of professional qualifications.
The existing National Academic Recognition Information Centre (NARIC) and the
National Institute for Technical and Vocational Education will support the Ministry in its
co-ordination. Professional associations and the Ministry of Trade will also be involved
according to the specific field of activity. It will be important to ensure that all such
bodies have enough well-trained staff to carry out their tasks effectively.
In the area of
citizens’ rights
legislative alignment has been largely completed through
legislation on residence, education, elections to the municipalities and elections to the
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European Parliament. An amendment to the Act on Registration of Residents remains to
be adopted and the Ministry of Education, Youth and Sports must ensure that there are
no breaches of equal treatment in the provision of education. The main administrative
structures for implementation are in place; electoral rolls including EU nationals will
need to be prepared for the 2004 European Parliament elections.
As regards
free movement of workers,
a transitional arrangement has been agreed. For
the first two years following accession, current Member States will apply national
measures, or bilateral agreements, to regulate the access of workers from the Czech
Republic to their labour markets. These arrangements may continue up to a maximum of
seven years. An amendment will be needed to the Civil Service Act to ensure that access
for EU citizens to employment in the public sector is not overly restricted. An
amendment to pensions legislation to align on supplementary pension rights of workers
moving within the European Union remains to be adopted.
With regard to
co-ordination of social security systems,
no transposition into national
legislation is needed to achieve alignment with the
acquis,
but appropriate administrative
capacity needs to be ensured through staffing increases and training. The Centre for
International Reimbursements will co-ordinate administration of health care expenses.
Although these structures remain to be completed, preparations, including training, are
on track.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements in the
areas of
citizens’ rights, free movement of workers
and
co-ordination of social
security systems
and is expected to be in a position to apply the
acquis
from accession
after the remaining legislative work is completed. Equal treatment in the provision of
education and access to employment in the public service must be guaranteed and the
supplementary pension rights system must be adapted. The ongoing measures to ensure
adequate administrative capacity in these areas should be continued.
Serious concerns exist relating to the Czech Republic’s preparations in the area of
mutual recognition of professional qualifications.
The Czech Republic must
substantially enhance its efforts to transpose both the general system and the sectoral
directives on doctors, dentists, pharmacists, general care nurses and midwives. The
required administrative bodies must be fully established and the capacity to implement
this
acquis
reinforced. In addition, all necessary steps concerning training and curricula
need urgently to be taken. Unless immediate action is taken across an important and
extensive range of issues, the Czech Republic will not meet the requirements for
membership in this area.
Chapter 3: Freedom to provide services
Under this chapter, Member States must ensure that the right of establishment and the
freedom to provide services anywhere in the EU is not hampered by national legislation.
In some sectors, the
acquis
prescribes harmonised rules which must be respected if the
internal market is to function; this concerns mainly the financial sector (banking,
insurance, investment services and securities markets) but also some specific professions
(craftsmen, traders, farmers, commercial agents). Harmonised rules concerning personal
data protection and certain information-society services must also be respected.
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Although the
acquis
on commercial agents has been transposed, legislative alignment is
not complete concerning the
right of establishment and freedom to provide non-
financial services.
In particular, in Czech legislation regulating economic activity a clear
distinction should be made between economic operators providing services in the Czech
Republic temporarily and those established permanently, so as to ensure free provision of
cross-border services. This has not been done sufficiently in the existing trade licence
legislation, which needs to be improved in order to ensure the free provision of cross
border services. Screening needs to be completed as regards other legislative or
administrative restrictions which are not compatible with the principle of the freedom to
provide services in the light of the relevant case law of the European Court of Justice,
and the identified restrictions will need to be removed upon accession.
In the field of financial services,
banking-sector
legislation is largely in line with the
acquis.
The e-money directive and capital adequacy rules have not been fully
implemented.
Legislative progress is necessary in the
insurance sector,
where some further
transposition is needed concerning life, non-life and motor vehicle insurance, insurance
contracts, intermediaries and loss adjusters.
In the area of
investment services and securities markets,
alignment needs to be
completed. The directive on financial collateral needs to be transposed.
In the field of banking supervision, the performance of the Czech National Bank is
satisfactory. However, the financial independence of the Securities Commission has not
yet been guaranteed. An agreement signed in February 2003 aims to reinforce co-
operation between the authorities in banking and financial-market supervision. In the
field of insurance, the supervisory body is not yet fully independent in political and
budgetary terms. The Czech Republic should ensure that it is able to meet its target in
establishing this regulator; and in particular that it has sufficient specialised staff.
The Czech Republic has broadly aligned its legislation on
protection of personal data
and the free movement of such data.
However, a number of amendments are necessary
to refine the Data Protection Act and the Banking Act. The Office for Personal Data
Protection has proved to be fully independent and effective. Additional staff needs to be
recruited to guarantee a long-term sustainable performance.
In the area of
information-society services,
a White Paper on e-commerce was finalised
in May 2003 but the e-commerce directive has not yet been transposed. The
acquis
on
conditional access has not yet been implemented and minor amendments are needed to
the Law on Electronic Signatures.
Conclusion
The Czech Republic is essentially meeting the requirements for membership and is
expected to be in a position to implement the
acquis
in the areas of
banking, investment
services and securities markets
and the
protection of personal data
by the time of
accession. Full transposition of the
acquis
in these areas needs to be completed and the
independence of the supervisory bodies safeguarded. The Office of Personal Data
Protection would benefit from further strengthening.
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1465022_0021.png
The Czech Republic is meeting the majority of the requirements for accession in the
areas of
right of establishment and freedom to provide non-financial services,
insurance,
as well as in the field of
information-society services.
In order to complete
preparations for membership, legislative alignment must be accelerated in those areas.
Urgent action needs to be taken in the field of trade licensing in order to ensure that the
Czech Republic is in accordance with fundamental EU rules on
the
free
provision
of
services and
the right
of establishment by accession.
Chapter 4: Free movement of capital
Under this chapter, Member States must remove all restrictions in national law on the
movement of capital between themselves, but also with third countries (with some
exceptions) and adopt EU rules to guarantee the proper functioning of cross-border
payments and transfers of all forms of capital. The
acquis
under this chapter also
includes harmonised rules on payments systems and the fight against money laundering,
requiring adequate enforcement capacity.
In the area of
capital movements and payments,
the Czech Republic is to a large extent
in line with the
acquis
but a few measures remain to be taken. The Czech Republic still
needs to harmonise fully the prudential rules relating to the placement of assets of
insurance companies, pension funds, and saving and credit unions. The assessment of
whether the special rights retained by the state in privatised companies are compatible
with the
acquis,
also remains to be carried out. The Czech Republic must still remove the
restrictions on foreign direct investment in the air transport sector.
In accordance with the transitional arrangement, the Czech Republic will remove the
restrictions on the acquisition of secondary residences by EU nationals non-resident in
the Czech Republic and by EU companies by May 2009 at the latest. Similarly, in
accordance with the transitional arrangement it has been granted, the Czech Republic
will remove the restrictions on the acquisition of agricultural land and forests by EU
nationals and by EU companies by May 2011 at the latest.
In the field of
payment systems,
the Czech Republic is completing its legislative
alignment, while the implementing structures are in place and function adequately. In
particular, the provisions on securities settlement systems of the
acquis
on securities
finality remain to be adopted.
In the area of
money laundering,
the Czech Republic still has to amend its anti-money-
laundering legislation in line with the most recent
acquis
and,
inter alia,
extend the range
of subjects obliged to report suspicious transactions to cover lawyers, accountants, tax
advisors, auditors and notaries. Moreover, the Czech Republic is completing
implementation of the Financial Action Task Force recommendations and is fulfilling its
commitment to phasing out anonymous accounts. Implementing structures, the financial
intelligence unit needs to be further strengthened both in terms of staff and equipment
(see
also chapter 24 – Justice and home affairs).
Conclusion
The Czech Republic is essentially meeting the requirements for membership and is
expected to be in a position to implement the
acquis
in the area of
capital movements
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and payments
and
payment systems
from the date of accession. A limited number of
specific issues will still need to be addressed in these areas before accession.
The Czech Republic is meeting the majority of the requirements for membership as
regards the fight against
money laundering.
In order to complete preparations for
membership, the Czech Republic must transpose the recent
acquis
and further reinforce
its administrative capacity to effectively implement the
acquis
on money laundering.
Chapter 5: Company law
Under this chapter, Member States must adopt and apply harmonised rules required for
the proper operation of companies in the internal market. They concern five legislative
fields: company law in the strict sense, accounting law, intellectual property rights,
industrial property rights, and the recognition and enforcement of judgements in civil and
commercial matters as well as of contractual obligations.
In the field of
company law
as such, the Czech Republic has aligned its legislation with
the
acquis.
Further efforts are still needed to improve administrative capacity and the
overall business environment (in particular the efficient enforcement of commercial
judgements). As regards the commercial registry, significant progress has been made in
speeding up company registration and reducing the backlog of cases of the Prague
Commercial Registry. Efforts need to be maintained in order to secure this positive trend
at a national level.
The Czech Republic’s commitments in the field of
accounting
have been met and it will
be in a position to implement the
acquis
in this field from the date of accession. The
administrative structures are adequate.
As regards
protection of intellectual and industrial property rights (IPR),
the
majority of commitments have been met on copyright and related rights. However, with
respect to the Directive on copyright in the Information society, further alignment is
needed with regard to the provisions relating to the protection of technological measures
and rights management information. The Trademark Act still remains to be adopted.
Special transitional rules will apply in relation to pharmaceutical product patents,
involving the non-applicability of Community exhaustion to certain exports from the
Czech Republic, as regards the granting of supplementary protection certificates for
medicinal and plant protection products, as well as in relation to the extension of
registered or pending Community trademarks to the territory of the Czech Republic.
Concerning the enforcement of IPR, the necessary structures are in place but need to be
strengthened, in particular to combat media piracy. Video piracy has been reduced due to
enforcement measures, but software and music piracy levels remain high. Further
training and better co-ordination between enforcement bodies (customs, police and
judiciary) should remain a priority, as should the control of cross-border trade in
counterfeit goods and the speed and efficiency of court procedures in this area. The
specialised police unit foreseen in the field of IPR has not yet been established.
The
Regulation replacing the Brussels Convention
on mutual recognition and
enforcement of foreign judgements in civil and commercial matters will be directly
applicable upon accession, and accession to the
Rome Convention
will only be possible
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upon accession. The Czech Republic should designate the relevant Courts or other
authorities to ensure swift implementation of these provisions
(see also Chapter 24 -
Justice and home affairs).
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the areas of
company law
and
accounting,
as well as
on the
Regulation replacing the Brussels Convention
and the
Rome Convention.
The
Czech Republic is expected to be in a position to implement the
acquis
from accession,
provided that the final legislative alignments are completed.
The majority of commitments and requirements arising from the accession negotiations
in the field of the
protection of intellectual and industrial property rights
have been
met. Further legislative adjustments are required in respect of copyright and related
rights, and trademark rules. Although the legislation is mostly in line, however, enhanced
efforts must be made to strengthen enforcement of intellectual and industrial property
rights. Better co-ordination among enforcement bodies is required and the efficient
functioning of a well-trained judiciary should be given particular attention.
Chapter 6: Competition policy
The competition
acquis
covers both anti-trust and state aid control policies. It includes
rules and procedures to fight anti-competitive behaviour by companies (restrictive
agreements between undertakings and abuse of dominant position), and to prevent
governments from granting state aid which distorts competition in the Internal Market.
Generally, the competition rules are directly applicable in the whole Union, and Member
States must fully co-operate with the Commission on the enforcement of these rules.
In the
anti-trust
sector, the Czech Republic has adopted legislation containing the main
principles of Community anti-trust rules as regards restrictive agreements, abuse of
dominant position and merger control. The Czech Republic needs to ensure that its
legislation is not in contradiction with the most recent Community block exemptions.
Preparation should continue, as appropriate, for the application of the EC’s new
procedural regulation.
The Czech Republic has the necessary implementing structure in place and the Office for
the Protection of Competition is functioning well. In view of the decentralised
application of the antitrust rules under the EU's new procedural regulation, further
strengthening of the administrative capacity would still be opportune. Further efforts are
needed to raise the awareness of all market participants and to build up a credible and
transparent competition culture. Specialised training for judges in economic and
competition issues is still not sufficient.
The enforcement record of the Competition Office is generally satisfactory. In order to
strengthen it further, priority should be given to cases creating the most serious
distortions to competition. Furthermore, the policy on sanctions (fines on competition
infringements) should be reinforced.
As regards
state aid,
the Czech Republic is applying state aid rules covering the main
principles of the
acquis.
The amendment of the Investment Incentives Act, which aims
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inter alia
to establish a fully compatible investment incentives scheme, remains to be
completed.
The Czech Republic has the necessary implementing structure in place. Further efforts
are needed to raise awareness of state aid rules among all market participants and aid
grantors. Further attention needs to be paid to training in this field, both at the level of
the national state aid authority (the Competition Office) and the judiciary.
The enforcement record of the Competition Office is not wholly satisfactory. The
assessment of the aid measures has not always been carried out in line with the
acquis
and has diverged from the Commission’s practice. The Czech Republic must ensure that
all State aid measures, including investment incentives, are properly monitored and
controlled. In general, reinforced efforts are required to ensure fully satisfactory
enforcement.
The Czech Republic is fulfilling its commitment to create full transparency as regards all
State aid measures taken in the process of restructuring of its banking sector. The Czech
Republic would need to remain vigilant on any new measure in the run up to accession.
The Czech Republic benefits from a transitional arrangement in relation to the
restructuring of the steel industry until December 2006. In this context, the Czech
Republic is allowed to grant restructuring aid to a pre-defined group of steel companies
until the end of 2003 for which the restructuring process would have to be completed by
2006. The Czech Republic is also obliged to report on the implementation of the
restructuring program on a half-yearly basis. Furthermore, it is important to observe that
no restructuring aid may be granted exceeding the specified amounts or to companies
outside the group of steel mills specified in the special Protocol of the Accession Treaty.
As regards public undertakings and undertakings with special or exclusive rights, the
Czech Republic still needs to fully adopt the Transparency Directive by the date of
accession.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the area of
anti-trust
and is expected to be in a
position to implement this
acquis
from accession. In completing preparations for
membership, the Czech Republic should finalise the necessary legislative fine-tuning,
and should continue to develop a track record of proper application of the antitrust rules.
The Czech Republic is meeting the majority of the commitments and requirements
arising from the accession negotiations in the area of
State aid.
In order to complete
preparations for membership, the Czech Republic must ensure proper enforcement of all
State aid measures. The Czech Republic must also ensure full implementation of the
agreed framework for the restructuring of the steel industry, and in particular, guarantee
that no restructuring or any other incompatible aid is granted to steel companies that are
not covered by the Protocol on steel.
Chapter 7: Agriculture
The agriculture chapter covers a large number of binding rules, many of which are
directly applicable. The proper application of these rules and their effective enforcement
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by an efficient public administration are essential for the functioning of the common
agricultural policy. This includes the setting up of management systems such as a Paying
Agency and the Integrated Administration and Control System, which are covered under
”horizontal issues”. below, and also the capacity to implement rural development actions.
The acceding countries must be ready to be integrated into the common market
organisations for a range of agricultural products, including arable crops, fruits and
vegetables, and meat. Finally, this chapter covers detailed rules in the veterinary field,
which are essential for safeguarding animal health and food safety in the internal market,
as well as in the phytosanitary field, including issues such as seed quality, harmful
organisms and plant protection products.
Horizontal issues
The Czech Republic has decided to merge the State Agriculture Intervention Fund
(SAIF) and the Agrarian
Paying Agency
(APA) into one single paying agency but
appropriate legal and administrative arrangements have yet to be completed. A
substantial amount of work remains to be done, notably in terms of organisation (internal
and with the delegated bodies) and the IT system. Attention should be given to ensuring
that the timetable for the remaining work is respected.
The Czech Republic has made progress in establishing of a functioning
Integrated
Administration and Control System
(IACS), notably in setting up of the Land Parcel
Identification System, but substantial efforts are still needed in order to have the system
operational by accession.
The SAIF will be responsible for the administration of
trade mechanisms.
The relevant
control tasks will be the responsibility of the customs services and the State Veterinary
Service. Legislation in this area remains to be adopted and administrative structures and
procedures remain to be fully put in place. In particular, clear agreement must be reached
on the sharing of responsibilities amongst the services involved.
The Responsibility for
quality policy
and
organic farming
rests with the Ministry of
Agriculture, for quality policy in co-ordination with the Office for Industrial Property.
Legislation in this field is largely in line with the
acquis.
The Czech Republic has met the commitments and requirements arising from the
accession negotiations in the area of the
Farm Accountancy Data Network
(FADN)
and is expected to have implemented the FADN by accession.
State aid
measures in the field of agriculture remain to be brought into line with the
acquis
by the time of accession.
As concerns direct payments to farmers, the Czech government has decided to apply the
single area payment scheme (SAPS) in the first years after accession.
Common market organisations
SAIF will be responsible for intervention as well as inspection and authorisation of
payments for
arable crops.
Implementing rules on potato starch and cereals remain to be
adopted. The establishment of the actual structures, including intervention centres, needs
to be accelerated. Further progress is required as regards the
acquis
on fibre crops.
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SAIF has been designated as the body responsible for the
sugar
common market
organisation (CMO). A system of sugar quotas has been in place since 2001 but only in
2003 was the appropriate legislation adopted to make the system operational. However,
the Czech legislation is still not in compliance with the
acquis.
Other mechanisms of the
CMO for sugar, such as inter-professional agreements and provisions for trade with third
countries, still need to be established at the legal and administrative level.
Implementing legislation as regards marketing standards for
fruit and vegetables
has
been adopted, but it is still lacking on recognition of producers’ organisations, approval
and control of operational programmes and control of operational funds. Administrative
capacity needs to be strengthened, in particular concerning price reporting, controls for
producers’ organisation and inspection at the export stage.
In the area of
wine and alcohol,
the CMO for wine remains to be fully set up. A new Act
on Viticulture needs to be adopted. Administrative capacity has already been more or
less designated or is already in place, but the vineyard register is only partially aligned
with the
acquis.
The implementation of controls on wine circulation (in particular the
accompanying documents) also requires particular attention.
Since 2001 the Czech Republic has a
milk
quota system, which remains to be aligned on
the
acquis.
The legal basis for implementing the milk CMO has not yet been adopted.
Proper administrative structures are in place and preparations for full implementation of
all mechanisms in the milk sector are ongoing.
Legislative measures have been adopted regarding carcass classification for
beefmeat,
sheepmeat and pigmeat.
Regarding beef, legislation remains to be adopted on labelling
and price reporting and controls on carcass classification need to be reinforced.
Regarding pig meat the legal basis for controlling carcass classification is not yet in
place. Appropriate administrative structures are in place, with the exception of those
required for the labelling system.
For
eggs and poultry,
legislative measures as well as administrative structures are in
place as regards marketing standards, price reporting and the reporting of production
statistics.
Rural development
The horizontal legislation and administrative structures for implementation of rural
development measures have largely been put in place. APA will be the paying agency for
rural development and will be responsible for implementation of the measures. The
Agency already has substantial experience with the implementation of SAPARD. The
Czech Republic has transmitted its formal draft Rural Development Plan for EAGGF
Guarantee expenditure to the Commission
Veterinary and phytosanitary issues
Transposition of legislation on transmissible spongiform encephalopathies (TSEs) and
animal by-products
has been partly achieved. Full implementation needs to be
accelerated, in particular as regards the total feed ban.
The establishment of the
veterinary control system in the internal market
needs to be
completed. The administrative structures in this area need to be strengthened. The Czech
Republic has not joined the computerised network linking veterinary authorities ANIMO.
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Transposition of the
acquis
for identification and registration of animals remains to be
completed. A central computer database for bovine animals has been operational since
January 2002 but needs to be updated. The law on financing of veterinary inspections
and controls has been partly transposed but remains to be implemented. Implementating
regarding veterinary checks of imports from third countries and rules for imports has not
yet been adopted. The only border inspection post that the Czech Republic plans to bring
into continue after accession is the one located at Prague’s airport. Considerable work is
still needed at these premises.
Regarding
animal disease control
measures, national contingency plans on-foot-and
mouth disease, classical swine fever, Newcastle disease and avian influenza have been
provided. The Czech Republic has joined the Animal Disease Notification System
(ADNS) on a voluntary basis. Legislation on
trade in live animals and animal
products
still needs to be transposed and implemented.
Legislation on
public health
protection has been largely transposed but gaps remain in
the fish sector. Transitional arrangements have been granted for certain red meat, poultry,
egg and dairy establishments until the end of 2006. Products from these establishments
will be restricted to the national market. The upgrading of establishments needs to be
accelerated. The Czech Republic has given a commitment that all establishments in
operation after accession will be in compliance with the
acquis.
There is a high
probability that a significant number of agri-food establishments will not be in
compliance with the relevant EU requirements at the date of accession.
The
acquis
on
common measures
(including zoonoses) largely remains to be
transposed. The residue control system is not fully effective.
The
acquis
in the field of
animal welfare
remains to be transposed, and efforts need to
be stepped up in order to ensure actual implementation and enforcement. The Czech
Republic has been granted a transitional arrangement until the end of 2009 as regards the
conditions for laying hens in certain farms.
In the field of
zootechnics,
transposition and implementation of the
acquis
remain to be
achieved.
Alignment with the
acquis
on
animal nutrition
still needs to be completed by an
Amendment to the Act on Feedingstuffs.
In the field of
phytosanitary legislation,
the Plant Health Act (harmful organisms and
plant protection products) and legislation related to pesticide residues still need to be
adopted. The Seeds Act has been adopted. Numerous implementing decrees remain to be
adopted. Plant passport and registration of producers, growers and traders have been
introduced. The administrative structures in this field are adequate.
The Czech Republic must ensure that international veterinary and phytosanitary
agreements are brought into compliance with the EU
acquis
by accession.
The Czech Republic has made very little progress in ensuring a comprehensive approach
to enhancing food safety throughout the food chain. Aspects of food safety are also
covered under
Chapter 1 – Free movement of goods.
Conclusion
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The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations, in (as far as the horizontal issues are concerned)
quality
policy
and
organic farming,
the
Farm Accountancy Data Network
(FADN) and
state
aid;
as far as the common market organisations (CMOs) are concerned, in
arable crops,
fruit and vegetables, milk, sheep and pigmeat
and
eggs and poultry;
and in
rural
development.
In the veterinary field, the requirements for
animal disease control
measures
are essentially met. The Czech Republic is expected to be in a position to
implement this
acquis
in these areas from accession.
The Czech Republic is partially meeting the commitments and requirements for
membership as regards the
Paying Agency, Integrated Administration and Control
System
(IACS),
trade mechanisms,
CMOs for
sugar, wine
and
beefmeat,
and most f
veterinary and phytosanitary issues (TSEs
and animal by-products, veterinary control
systems in the internal market, trade in live animals and animal products, common
measures, animal welfare, zootechnics, animal nutrition,
and
phytosanitary
measures).
Unless efforts are accelerated in these areas, there is a risk that functioning
systems will not be in place at accession.
There are serious concerns about the progress with
public health
protection (upgrading
of agri-food establishments). Unless immediate remedial action is taken, the Czech
Republic will not be in a position to implement the
acquis
in this area by the date of
accession.
Chapter 8: Fisheries
The
acquis
on fisheries consists of regulations, which do not require transposition into
national legislation. However, it requires the introduction of measures to prepare the
administration and the operators for participation in the Common Fisheries Policy (in the
areas of market policy, resource and fleet management, inspection and control, structural
actions and state aid). In some cases, existing fisheries agreements or conventions with
third countries or international organisations need to be adapted.
In the field of
resource and fleet management, and inspection and control,
the Czech
Republic needs to adopt the remaining legislation, including a new Act on the import
control system, in order to be able to implement the
acquis
by accession. Administrative
capacity in this sector should be further strengthened through an increase of staff.
In the area of
structural actions,
the Czech Republic has submitted to the European
Commission the chapter on fisheries in the Czech Operational Programme on “Rural
Development and Multifunctional Agriculture”. A Managing Authority for this
Operational Programme has also been established. However, additional specific staff
needs to be allocated to the Rural Support Service of the Ministry of Agriculture for the
administration of the Financial Instrument for Fisheries Guidance (FIFG).
Regarding
market policy,
the Czech Republic has met the commitments and
requirements arising from the accession negotiations. The administrative structures are
adequate to implement the
acquis
in this area.
As regards
state aid
to the fisheries sector, the Czech Republic must bring its national
aid schemes into conformity with the
acquis
by accession.
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The Czech Republic is not party to any
international fishing agreements.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations and is expected to be in a position to implement the
acquis
in the area of
fisheries
as from accession. The administrative capacity is adequate
overall, but needs to be strengthened for the management of the fisheries part of the
Operational Programme.
Chapter 9: Transport policy
EC transport legislation aims at improving the functioning of the Internal Market by
promoting efficient and environment- and user-friendly transport services. The transport
acquis
covers the sectors of road transport, railways, aviation, maritime transport and
inland waterways. Member States are required to adopt and implement legislation
concerning technical and safety standards as well as social standards. In order to further
develop the European Single Transport Market, EC legislation also includes rules on
market liberalisation. An important aspect of EC maritime policy is the establishment of
Union-wide maritime safety standards.
The extension of the
trans-European transport networks
has been defined. While the
necessary implementing structures in this area are in place, the capacity of the Ministry
of Transport to prepare, manage and monitor transport projects requires further
strengthening, in both qualitative and quantitative terms.
In the land transport sector, serious delays have occurred in the implementation of the
Czech Republic’s commitments with regard to the
road transport
acquis.
While
framework legislation is in place and in line, secondary legislation remains to be
completed in order to ensure alignment with the
acquis.
Alignment with the fiscal
acquis
is not yet completed as regard rules on charges for the use of infrastructure. In the area of
the social
acquis,
legislation is in line with the
acquis,
but implementation remains
insufficient. The administrative capacity needs to be increased rapidly in order to reach
the volume of checks required by the
acquis.
This is needed in order to ensure
compliance with driving times and rest periods. In the technical field, implementing
legislation remains to be adopted, notably with regard to speed limitation devices,
driving licences, safety advisers for the transport of dangerous goods, vehicle registration
documents and roadside inspections. The implementation of roadworthiness testing at the
roadside for commercial vehicles and the supervision of the privately-run vehicle test
centres are insufficient. Ministry supervision of the enforcement structures and the
inadequate enforcement are of particularly serious concern. Moreover, checks on the
transport of dangerous goods by road need to be significantly increased. Administrative
capacity should be strengthened through further staff increases and the training of
specialised staff in supervisory and control functions. The Czech Republic has agreed to
a transitional arrangement put forward by the EU concerning gradual reciprocal access to
the cabotage market in the road haulage sector (for a maximum duration of five years).
Transposition of the
rail transport
acquis
is taking place according to schedule. The
process remains to be completed with regard to the revised railway
acquis
of February
2001 and the interoperability directives. In the framework of the ongoing reorganisation
process, the capacity of the railway administrations needs to be further strengthened. In
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particular as regards track access charging and capacity allocation, procedures and task
allocation should be reviewed and training of staff should be pursued. The separation of
accounts between infrastructure rail freight and rail passenger transport must be
completed.
On
inland waterways
transport, legislative alignment is not yet completed, in particular
as regards the establishment of the Inland Waterway Fund, the reciprocal recognition of
navigability licences, the technical requirements for waterway vessels, and the reciprocal
recognition of boatmasters’ certificates. Apart from the need to establish the Inland
Waterway Fund, administrative structures in this area are in place and satisfactory.
In the area of
air transport,
the relevant legislation has been transposed and is generally
in line with the
acquis.
On licensing, some modifications are needed. Secondary
legislation is still being adopted in order to complete alignment with the
acquis.
Administrative capacity needs further strengthening.
In the field of
maritime transport,
framework legislation is in place and in line with the
relevant
acquis.
However, the adoption of implementing legislation remains to be
completed, in particular in relation to the
acquis
adopted under the “Erika” packages
relevant to the Czech Republic. The administrative structures in this area are in place and
satisfactory.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations as regards
trans-European transport networks, rail
transport, air transport, maritime transport
and in the area of
inland waterways.
The
Czech Republic needs to reinforce administrative capacities regarding trans-European
transport networks and air transport and to complete alignment in the areas of air
transport, maritime transport and inland waterways. The Czech Republic needs to adopt
legislation transposing the revised railway
acquis
and continue implementing the re-
organisation of the railway sector
There are serious concerns as regards the implementation of the
road transport
acquis.
Urgent improvement is needed in the implementation of the social and technical
acquis.
Unless immediate action is taken, the Czech Republic will not meet the requirements for
membership in this area by the time of accession.
Chapter 10: Taxation
The
acquis
on taxation largely covers indirect taxation, as concerns VAT (value-added
tax) and excise duties. It lays down definitions and principles of VAT. Excise duties on
mineral oils, tobacco products and alcoholic beverages are regulated at EU level as
concerns the structure of the duty, the level of minimum rates and the holding and
movement of excisable goods. As concerns direct taxation, the
acquis
covers some
aspects of corporate taxes and aims mainly at removing obstacles to cross-border
activities between enterprises. Finally, the Community legislation in the area of
administrative co-operation and mutual assistance provides tools to prevent intra-
Community tax evasion and tax avoidance on both direct and indirect taxation.
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In the area of indirect taxation, alignment needs to be completed as concerns the scope
and definition of the application of the reduced
VAT
rate for some supply of goods and
services, and to a lesser extend the scope of exempt transactions. The Czech Republic
also needs to align its legislation to the
acquis
in the following areas: VAT refunds to
foreign taxable persons not established within the Czech Republic; further reduction of
the registration and exemption threshold for small and medium-sized enterprises (SMEs)
to the equivalent level for which a derogation has been granted in the accession
negotiations (see below); introduction of certain special schemes including for second
hand goods, travel agents, investment gold; introduction of the intra-Community regime.
The necessary administrative structures for VAT are in place. Further modernisation and
reinforcement of the tax administration is in progress and should be completed.
The Czech Republic has been granted transitional periods as regards the continued
application of the reduced VAT rate on the supply of construction work for residential
housing not provided as part of a social policy (until 31 December 2007), and on the
supply of heat energy used by households and small entrepreneurs who are not registered
for VAT for heating and hot utility water preparation (until 31 December 2007). The
Czech Republic obtained derogations concerning the application of a VAT exemption on
international passenger transport and of a VAT exemption and registration threshold of
€35,000 for SMEs.
As concerns
excise duties,
the Czech Republic has recently adopted legislation aiming to
fully align with the
acquis,
except for the areas where transitional measures were granted
in the accession negotiations. The necessary administrative structures are in place. The
transfer of the administration of excise duties to the customs administration is
progressing according to plan, but it should be ensured that remaining actions are
completed as scheduled.
The Czech Republic was granted a transitional period regarding delayed implementation
of the excise duty rates on cigarettes and other tobacco products (until 31 December
2006 in respect of the minimum excise duty equivalent to 57% of the retail selling price
and the minimum excise duty of € 60 per 1000 cigarettes of the category most in
demand, and until 31 December 2007 in respect of the minimum excise duty of € 64 per
1000 cigarettes of the category most in demand), and a derogation to continue to apply
its excise duty rate scheme for small fruit growers’ distillation, provided that the quantity
does not exceed 30 litres of fruit spirit per year per household and that the reduced excise
rate is not less than 50% of the standard national duty rate for ethyl alcohol.
Significant delays have occurred in the permanent closure of duty free shops at land
borders, which have still not been closed, despite the commitment of the Czech Republic
to ensure this by December 2001 and subsequently by 31 December 2003. There has
been a recent decision to further delay the closure of the duty free shops until 31 March
2004.
As regards
direct taxation,
the Czech Republic needs to complete alignment with the
Directive on indirect taxes on the raising of capital and the Merger and Parent/Subsidiary
Directives and to transpose the Directives on Interests and Royalties and on Taxation of
Savings Income. In order to comply with the principles of the Code of Conduct for
Business Taxation, the Czech Republic should improve transparency of its investment
incentive legislation. The administrative structures are in place as regards the direct
taxation field, and they are essentially satisfactory.
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On
administrative co-operation and mutual assistance,
the Czech Republic is taking
the necessary steps to transpose the
acquis
and implement it by accession, both from the
legislative point of view and as concerns organisational structures, including information
technology systems. A Central Liaison Office (CLO) has been set up, but needs to be
expanded to cover intra-Community transactions. The Excise Liaison Office (ELO) has
also been established, but needs to be further staffed. Preparations for the VAT
Information Exchange System (VIES) and for the System for Exchange of Excise Data
(SEED) databases are ongoing and are proceeding according to plan.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the
taxation
chapter, except for duty free shops at
land borders. In light of the repeated failure to close such shops and in particular in light
of the recent further postponement of their closure until end March 2004, it is most
important that shops are now closed without any further delay. Subject to legislative
alignment being completed, the Czech Republic is expected to be in a position to
implement the
acquis
from accession.
Chapter 11: Economic and monetary union
EC legislation on Economic and Monetary Union (EMU) contains specific rules ensuring
the independence of central banks in Member States, prohibiting indirect financing of the
state by the central bank, and disallowing privileged access of the public sector to
financial institutions. These rules must be transposed into the national legislation, despite
the fact that the Czech Republic will not yet adopt the euro as a currency from accession.
EMU policy also includes the co-ordination of exchange rate and economic policies,
adherence to the stability and growth pact and the statutes of the European System of
Central Banks.
The Czech Republic has met the commitments and requirements arising from the
accession negotiations in the area of
economic and monetary union
and is in a position
to implement the
acquis
as from accession.
Chapter 12: Statistics
The
acquis
in the field of statistics requires adoption of basic principles such as
impartiality, reliability, transparency, confidentiality of individual data and dissemination
of official statistics. It also covers methodology, classifications and procedures for data
collection in various areas such as statistical infrastructure, macro-economic and price
statistics, business statistics, transport statistics, external trade statistics, demographic
and social statistics, agricultural statistics and regional statistics. The focal point of the
statistical system of a country is the National Statistical Institute, which acts as the
reference point for the methodology, production and dissemination of statistical
information.
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the area of
statistics
and is expected to be in a
position to implement the
acquis
as from accession. The Czech Republic needs to
improve the quality and the timeliness of data in certain domains such as national
accounts, government finance statistics, household budget surveys, business statistics,
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and data for agricultural prices and incomes. Furthermore, the Czech Republic needs to
complete data-bases for regionally structured data.
Chapter 13: Social policy and employment
The
acquis
in the social field includes minimum standards in fields such as labour law,
equal treatment of women and men in employment and social security, and health and
safety at work. Specific binding rules have also been developed in public health (on
tobacco control and surveillance and control of communicable diseases) and recently also
with respect to non-discrimination on grounds of racial or ethnic origin, religion or
belief, disability, age or sexual orientation. The European Social Fund (ESF) is the main
financial tool through which the EU supports the implementation of its Employment
Strategy and contributes to social inclusion efforts (implementation rules are covered
under Chapter 21, which deals with all structural instruments). The acceding countries
are expected to be able to participate in social dialogue at European level, and in the EU
policy processes in the areas of employment, social inclusion and social protection.
Recent amendments to the
labour law
have further aligned Czech legislation with the
acquis.
However, transposition of legislation has to be completed on some aspects as
regards protection of young people, part-time and fixed-term work, working time,
transfer of undertakings and insolvency. The legislation transposing the
acquis
on
posting of workers needs significant technical revision to ensure its full compatibility.
The transposition of the new
acquis
concerning the involvement of workers in the
European Company and the information and consultation of workers is foreseen after
accession. The independent guarantee fund for employees is in place and functioning
well.
The Czech Republic has transposed almost all legislation in the field of
equal treatment
of women and men,
and, in general, the legislative transposition is in line with the
acquis.
However, the
acquis
on equal treatment in occupational social security schemes
still remains to be transposed. Moreover, the pensionable age for male and female civil
servants will have to be equalised upon accession, when the pension scheme constitutes
pay within the meaning of the EC Treaty and case law. With regard to equal access to
employment, effective sanctions against discrimination must be provided and provisions
in the labour code protecting women in preventing them from work underground and
physically heavy work need to be removed. It will also be necessary to introduce a
compulsory period of maternity leave for pregnant workers as well as a clear clause to
cover protection of workers on parental leave against dismissal. Implementing structures
are largely in place, but need further strengthening.
In the area of
health and safety at work,
most of the legislation has been transposed.
Further legal adjustments are necessary with regard to the Framework Directive.
Moreover, transposition needs to be completed in the areas of workplace requirements,
work equipment, temporary or mobile construction sites, workers potentially at risk from
explosive atmospheres, medical treatment on board vessels and work at a height (new
acquis).
The National Labour Inspectorate is in place, but needs further strengthening, in
particular as regards computerisation. Co-operation and co-ordination between the
occupational safety inspection and health at work inspection bodies should be
considerably improved. The use of risk premiums to compensate for hazardous working
conditions should be abolished.
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As regards
social dialogue,
effective tripartite social dialogue is well established.
Autonomous bipartite social dialogue between employer and worker representatives
needs to be strengthened notably through giving more autonomous collective bargaining
space to social partners, and with the view to progressively increasing social dialogue
coverage in terms of labour force and enterprises covered by collective agreements.
Specific emphasis should also be given to the emergence of autonomous social dialogue
in the public sector. In general, the administrative capacity of both government and social
partners needs to be reinforced.
In the field of
public health,
the Czech Republic has recently adopted legislation aiming
at transposing the new tobacco
acquis.
The system of surveillance, prevention, and
control of communicable diseases in the Czech Republic is aligned with the
acquis.
The
Czech Republic also has the necessary capacity to be incorporated into the EU
communicable disease surveillance and control structures. Attention should be paid to
the improvement of the health status of the population and to health expenditure.
Concerning
employment policy,
efforts are still needed to effectively implement the
priorities identified in the Joint Assessment of the Employment Priorities (JAP). Further
action should focus on the reform of the education and vocational training systems, in
particular the implementation of a new comprehensive life-long learning facility,
providing stronger incentives for job creation and people to take up jobs and
strengthening the public employment service. In view of the ageing of the population and
the consequent pension problem, more and continued efforts are needed to increase the
participation of older workers.
The administrative capacity of the structures for
European Social Fund (ESF)
management and implementation has been strengthened in order to be ready for efficient
use of the ESF. Further efforts are, however, necessary, especially as regards training of
new staff. The Czech Republic has a first experience of participation in EQUAL.
Preparations need however to be further enhanced.
The Commission and the Czech Republic are finalising the Joint Memorandum on Social
Inclusion (JIM),which identifies key challenges and possible policy orientations for
promoting
social inclusion.
On this basis, an integrated strategy and a National Action
Plan on social inclusion will have to be developed. Analytical work and social statistics
systems on poverty and social exclusion should continue to be improved in line with the
EU commonly agreed indicators on social inclusion.
In the field of
social protection,
continued efforts are required to reform the health care
and pension systems. To improve social protection, the Government has adopted a
national programme to prepare the Czech Republic for an increasing number of elderly
citizens and focusing on the social impact of an ageing population.
Concerning
anti-discrimination,
the government agreed on an approach for a new anti-
discrimination act aiming at transposing the relevant
acquis.
However, legislation
remains to be fully aligned with the
acquis
and the Equality Body required by the
acquis
needs to be established. As regards the situation of the Roma minority, the multi-faceted
discrimination and social exclusion faced by the Roma continues to give cause for
concern. Unemployment affecting the Roma continues to be disproportionately high.
Widespread discriminatory hiring practices are still being reported. Efforts aimed at
defining an incentive structure for the employment of Roma should be intensified. As
regards the integration of the Roma in the education system, the phasing out of the
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system of special schools should be pursued. Local levels of government need to show a
greater commitment to addressing the particular problems of the Roma, in particular in
the field of housing. The future ESF support for the Roma should also receive more
emphasis in the proposed programmes.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the areas of
labour law, equal treatment of women
and men, social dialogue, public health, employment policy, social inclusion
and
social protection
and is expected to be in a position to implement this
acquis
from
accession. Certain specific aspects of measures in the fields of labour law and equal
treatment of women and men need further legal alignment. As regards employment
policy, the effective implementation of the priorities identified in the Joint Assessment
Paper is necessary to prepare for full participation in the European Employment Strategy.
The Czech Republic is meeting the majority of the requirements for membership in the
fields of
health and safety at work, European Social Fund
and
anti-discrimination.
In order to complete preparations for membership, further legal alignment and co-
ordination of the administrative structures as regards inspections is needed in the field of
health and safety at work. With regard to European Social Fund, including EQUAL,
while considerable progress has been achieved during the last few months, further efforts
are urgently needed in order to strengthen the administrative capacity for management,
implementation, monitoring, audit and control at both national and regional level.
Attention must be given to alignment with the anti-discrimination
acquis,
and
considerable efforts should aim at improving the situation of the Roma minority.
Chapter 14: Energy
EU energy policy objectives include the improvement of competitiveness, security of
energy supplies and the protection of the environment. The energy
acquis
consists of
rules and policies, notably regarding competition and state aids (including in the coal
sector), the internal energy market (for example, opening up of the electricity and gas
markets, promotion of renewable energy sources, crisis management and oil stock
security obligations), nuclear energy and energy efficiency. This chapter also covers
important aspects on the safety of nuclear installations.
With respect to
security of supply,
and in particular oil stocks, both framework and
implementing legislation are in place and in line with the
acquis.
The administrative
capacity required - the Administration of State Material Reserves - is in place. Building
up of oil stocks is -despite some delays for some product categories -essentially taking
place in accordance with the transitional arrangement the Czech Republic has been
granted, namely to reach the 90 days of oil stocks required by the
acquis
by the end of
2005.
In the field of
competitiveness and the internal energy market
(electricity and gas
sectors), transposition of the
acquis
is taking place according to schedule. Framework
legislation is in place and in line with the
acquis.
Regarding electricity, implementing
legislation is in place and in line with the
acquis.
However, as regards gas, implementing
legislation is only partially adopted and needs to be completed in order to prepare the
opening of the gas market. Market opening in the gas and electricity sectors is taking
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place in line with the commitments made in the negotiations. Electricity and gas price
distortions have been removed in line with the commitments made. The regulatory body,
the Energy Regulatory Office, whose task it is to oversee the gas and electricity markets,
is established but needs to be further strengthened. The Czech Republic was granted a
transitional arrangement to implement the market opening provisions of the gas directive
until end 2004. The Czech Republic should transpose the recently adopted electricity and
gas directives in line with the timetable laid down by this
acquis.
As regards solid fuels, the Czech Republic must continue to prepare for the application of
EU State Aid regulations for the hard coal industry and will have to abolish any import
restrictions for hard coal upon accession.
In the area of
energy efficiency and renewable energy,
framework legislation is in
place. Implementing legislation is largely in place and needs to be completed.
Administrative structures in this area, with the Czech Energy Agency as the main
institution, are in place but need to be strengthened. A State Programme for Promotion of
Energy Savings and Use of Renewable Sources of Energy is being implemented.
In the field of
nuclear energy and nuclear safety,
the Czech Republic meets the
commitments and requirements arising from the accession negotiations and is in a
position to implement the Euratom
acquis
as from the date of accession. During the
accession negotiations, the Czech Republic committed itself to providing additional
information on measures taken to implement the recommendations of the June 2001
Council Report on Nuclear Safety in the Context of Enlargement. The Czech Republic
provided such information in July and September 2001 and in April 2002. The Czech
Republic has also been providing regular information on the licensing status of the
Temelin Nuclear Power Plant. In June and September 2003, the Czech Republic
submitted additional information covering all recommendations, including those related
to high energy pipes and valves at Temelin NPP and the bubbler-condenser system.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the
energy
chapter and is expected to be in a position
to implement the
acquis
in this area by accession. The Czech Republic needs
progressively to build up oil stocks in line with the schedule agreed during the
negotiations. In addition, the Czech Republic must complete alignment by adopting
implementing legislation as regards the gas market. It needs to strengthen the Energy
Regulatory Office and the Czech Energy Agency.
Chapter 15: Industrial Policy
EC industrial policy seeks to enhance industrial competitiveness and rates of
employment, whilst operating in markets open to international competition. Its aim is to
speed up adjustment to structural change, encouraging an environment favourable to
initiative and to the development of undertakings throughout the Community. EC
industrial policy mainly consists of policy principles and horizontal and sectoral
industrial policy communications.
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The Czech Republic’s
industrial strategy
essentially complies with the concepts and
principles of EC industrial policy, i.e. it is market-based, stable and predictable. The
necessary administrative structures are in place.
The
privatisation and restructuring
process has not yet been fully completed in the
energy, telecommunications and steel sectors. Priority should be given to ensuring that
restructuring policy is implemented in a manner which conforms to the competition and
state aid
acquis,
in order to create efficient and competitive firms. The necessary
administrative structures in this area are in place.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the area of
industrial policy
and is expected to be in a
position to implement the
acquis
from accession. In completing preparations for
membership, the Czech Republic should ensure the continued implementation of its steel
restructuring programme in line with the
acquis.
Chapter 16: Small and Medium-sized Enterprises
SME policy aims to improve the formulation and co-ordination of enterprise policy
across the internal market with a view to supporting the development of SMEs. In doing
so, it seeks to improve the overall business environment in which SMEs operate. SME
policy consists largely of consultation fora and Community programmes, as well as of
communications, recommendations and exchanges of best practices.
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the chapter
small and medium-sized enterprises.
Alignment with the new Commission recommendation on the SME definition should be
carried out. The implementation of the European Charter for Small Enterprises should be
maintained.
Chapter 17: Science and research
Due to its specificity, the
acquis
in the field of science and research does not require any
transposition in the national legal order. However, the necessary implementing capacity
needs to be created to allow for effective participation in activities under the Framework
Programmes in the field of research.
The Czech Republic has met the commitments and requirements arising from the
accession negotiations in the area of
science and research
and will be in a position to
implement the
acquis
as from accession.
Chapter 18: Education and training
Education, training and youth is primarily the competence of the Member States. The
Community's
acquis
consists of a directive on education of the children of migrant
workers, and of action programmes and recommendations. The necessary implementing
capacity needs to be in place to allow for effective participation in the Community
programmes related to this chapter (Leonardo da Vinci, Socrates and Youth).
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The Czech Republic has met the commitments and requirements for membership in the
area of
Community programmes,
and will be in a position to implement this
acquis
from accession. The implementing capacity for Community programmes will need to be
enhanced to benefit from additional allocations for decentralised actions following
accession.
In the area of
education of children of migrant workers,
due implementation of the
acquis
needs to be ensured.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the area of
education and training
and is expected to
be in a position to implement this
acquis
from accession. Efforts to implement the
acquis
on education of children of migrant workers should continue.
Chapter 19: Telecommunications and information technologies
The
acquis
in the field of telecommunications consists mainly of the 1998 regulatory
framework and a 2000 regulation, and is aimed at the elimination of obstacles to the
effective operation of the single market in telecommunications services and networks,
and the achievement of universally available modern services. A new regulatory
framework on electronic communications was adopted in 2002 and must be
implemented. As regards postal services, the objective is to implement the single market
by opening up the sector to competition in a gradual and controlled way, within a
regulatory framework which assures a universal service (1997 and 2002
acquis).
In the field of
telecommunications,
the Czech Republic’s framework legislation is
mostly in line with the
acquis
adopted in the period 1998 to 2000, except for the cost-
orientation of certain prices which continue to hamper the full liberalisation of the
market. The 2002
acquis
remains to be transposed. While the necessary administrative
structures in this area are in place, changes are necessary to provide for the appropriate
powers and independence of the regulator. In particular, the continued presence of
appointees from the Ministry of Informatics in the management of the incumbent
operator is incompatible with the separation of functions required by the
acquis.
Finally,
the
acquis
on universal service remains to be fully implemented.
In the area of
postal services,
legislative alignment on the second postal directive has
been achieved but remains to be implemented. Universal services remain to be clearly
defined in line with the present
acquis.
The administrative capacity in this sector needs to
be further strengthened including through further staffing and training.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the
postal services
sector and is expected to be in a
position to implement the
acquis
in this area by accession. The Czech Republic should
ensure the full implementation of the
acquis
in the postal sector and should ensure the
correct application of the universal service
acquis.
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The Czech Republic is partially meeting the commitments and requirements arising from
the accession negotiations in the
telecommunications
area. In order to complete
preparations for accession, the Czech Republic must adopt the new
acquis
in this area.
Additionally, the competencies and independence of the regulator in the
telecommunications sector need to be further strengthened.
Chapter 20: Culture and audio-visual policy
The culture and audio-visual policy chapter requires legislative alignment with the
Television without Frontiers directive and contains the community programmes Culture
2000, Media Plus and Media Training. Alignment with the Television without Frontiers
directive creates the conditions for the free movement of television broadcasts within the
Community. It implies basic common requirements concerning advertising; the
protection of minors and public order; and the promotion of European works.
The Czech Republic’s legislation is largely in line with the
audio-visual
policy
acquis,
but technical amendments to the Broadcasting Act, e.g. on the subsidiary criteria for
determining jurisdiction, are required to ensure full alignment. Whilst administrative
capacity for implementation of the audio-visual
acquis
is satisfactory, regulation of the
sector has proved controversial. The challenge for the new Broadcasting Council is to
ensure establishment of a stable, transparent and effective framework.
The Czech Republic meets the requirements for participation in Community activities in
the field of
culture.
Conclusion
The Czech Republic has met the commitments and requirements arising from accession
negotiations in the field of
culture.
The Czech Republic is meeting the majority of the requirements for membership in the
area of
audio-visual policy.
In order to complete preparations for membership, the
Czech Republic should adopt the remaining legislative amendments and focus its efforts
on the establishment of a stable, transparent and effective regulatory framework.
Chapter 21: Regional policy and co-ordination of structural
instruments
The
acquis
under this chapter consists mostly of regulations, which do not require
transposition into national legislation. They define the rules for drawing up, approving
and implementing Structural Funds programmes and Cohesion Fund actions. These
programmes are negotiated and agreed with the Commission, but implementation is the
responsibility of the Member States. It is essential that Member States respect
Community legislation in general, for example in the areas of public procurement,
competition and environment, when selecting and implementing projects, and have the
necessary institutional structures in place to ensure implementation in a sound and cost-
effective manner from the point of view of both management and financial control.
The Czech Republic has agreed with the Commission on a NUTS classification of its
territorial organisation.
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The essential feature of the
legislative framework,
i.e. the ability to ensure multi-annual
budget programming, is in place. In addition an amendment in the Act of Budgetary
Rules, coming into force in January 2004, will allow the required budgetary flexibility.
The legislative framework for financial control and compliance with other Community
policies is monitored in other chapters. However, in order for the Czech Republic to
make effective use of its eligibility for structural funds from 1 January 2004, the relevant
acquis
in areas such as public procurement, state aid and environmental protection will
need to be fully respected from that date.
The necessary
institutional structures
for the preparation and implementation of the
Structural and Cohesion Funds have all been put in place.
After repeated delays, a human resources development strategy for the various bodies
involved in the implementation of the Structural and Cohesion Funds was recently
approved by the Government. The strategy aims at meeting the current needs for
additional staff in the ministries and places particular emphasis on the regional
administrations. The timely and effective implementation of this strategy is essential, if
the administrative structures are to be ready by accession.
The bodies responsible for implementation of the specific financial control provisions,
including the 5% and the 15% on-the-spot checks, have been identified. Satisfactory
arrangements have been made for most of the programmes and the Cohesion Fund.
However, for two of the operational programmes, management control and internal audit
functions need to be more clearly separated.
Functionally independent internal audit units have been established within the line
Ministries. Training of auditors needs to be a priority.
Inter-ministerial co-ordination is guaranteed by the Management Committee for the
Community Support Framework, in which all Managing Authorities of the Operational
Programmes and the Paying Authority participate in order to discuss day-to-day
management issues. This Committee has an advisory role to the Managing Authority and
the Monitoring Committee for the Community Support Framework.
The
programming
documents — specifically the Development Plan, the Operational
Programmes, the Single Programming Documents and the programme complements —
have been submitted. Ex ante evaluations have been carried out for all programmes in
line with the guidelines issued by the Commission, and their conclusions were taken into
account in the drafting process. Separate strategic environmental assessments were also
prepared for each programme.
The Ministry for Regional Development is responsible for establishing the monitoring
system for structural funds. The system has been designed to meet the requirements for
computerised data transfer with the Commission and the specific data requirements per
fund. Following a pilot phase, work on making the system operational in time is
progressing.
The Management and Co-ordination Committee (MCC) serves as the main tool for
partnership arrangements. This precursor of the Monitoring Committee for the
Community Support Framework includes both public partners (ministries and regions)
and private partners (social partners, NGOs), and discusses the progress of the National
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Development Plan. All relevant partners have been involved in the preparation phase of
each programme through consultations in various forms.
Considerable and sustained efforts are needed to establish a pipeline of projects that are
ready to be implemented in technical and financial terms so as to enable the Czech
Republic to benefit fully from Community funds as soon as the programme starts.
The
financial management and control
arrangements are generally satisfactory. Efforts
should concentrate on drafting procedure manuals in relation to financial control,
auditing, certification of expenditure, and correction of irregularities of future Structural
and Cohesion Funds expenditure, including the detailed responsibilities of the Paying
Authority, the Managing Authorities and the Intermediate Bodies in the field of financial
management and control.
Additionality will be verified before approval of the relevant programming documents.
Conclusion
The Czech Republic is essentially meeting the requirements for membership in relation
to
territorial organisation
and
programmingfor
the implementation of actions under
the Structural and Cohesion Funds. Provided its further work programme is carried out as
envisaged, the Czech Republic should be in a position to meet all requirements in these
areas by accession. The Czech Republic needs to focus on establishing an adequate
pipeline of well-prepared projects and finalising procedures and manuals for financial
management and control.
The Czech Republic is only partially meeting the commitments and requirements arising
from the accession negotiations in relation to the
legislative framework, institutional
structures
and
financial management and control.
In order to complete preparations
for membership, a particular effort must be made in preparing the various authorities
concerned, strengthening their co-ordination and administrative capacity through
recruitment and training of staff. They must be prepared to apply effectively the new
rules on public procurement in line with EU requirements, in order to benefit from
Community funding from 1 January 2004. Particular attention must also be paid to
finalising arrangements for financial management and control.
Chapter 22: Environment
Community environment policy aims to promote sustainable development and protect the
environment for present and future generations, and is based on the integration of
environmental protection into other Community policies, preventive action, the polluter
pays principle, fighting environmental damage at source, and shared responsibility. The
acquis
comprises over 200 legal acts covering horizontal legislation, water and air
pollution, management of waste and chemicals, biotechnology, nature protection,
industrial pollution and risk management, noise, and radiation protection. Ensuring
compliance with the
acquis
requires significant investments, but also brings significant
benefits for public health and reduces costly damage to forests, buildings, landscapes and
fisheries. A strong and well-equipped administration at national, regional and local level
is imperative for the application and enforcement of the environment
acquis.
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Horizontal legislation
is in place and is in line with the
acquis,
except for the recent
acquis
on the strategic environmental impact assessment which needs to be transposed
and implemented by July 2004 in line with the Directive, as well as minor adaptations to
the Act on environmental impact assessment (EIA) in order to complete transposition of
EIA by the date of accession. While the relevant administrative capacities are in place
and function adequately, the competent authority for strategic environmental impact
assessment still needs to be designated.
In the
air quality
sector, legislation is in place and is in line with the
acquis,
except for
the recent
acquis
on ozone. Minor amendments are also needed to fully align the
legislation on volatile organic compounds from the storage and distribution of petrol.
Administrative capacities are in place and function adequately. Air quality plans and
programmes need to be adopted as well as monitoring further enhanced by accession.
In the field of
waste management,
legislation is in place and is in line with the
acquis,
except for packaging waste, the financial security of landfills, and the recent
acquis
on
end-of-life vehicles. These areas need to be transposed by accession. Administrative
capacities are in place and function, but the newly established Centre for Waste
Management needs further strengthening, and co-operation with the Ministry needs to be
improved. However, the regional waste management plans have yet to be adopted. The
establishment of collection systems and recovery and disposal facilities needs to
continue. A transitional arrangement until 31 December 2005, with intermediate targets,
was agreed for the implementation of rules on packaging waste.
In the area of
water quality,
legislation is in place and is in line with the
acquis,
except
for bathing water and the recent framework
acquis
on water, which need to be completed
by accession. The necessary implementing structures are in place and function. Due to
large number of bodies in the water sector, particular attention needs to be paid to co-
ordination between the various organisations involved. Water quality monitoring needs
to be enhanced. The inventory of and authorisations for discharges of dangerous
substances need to be completed, and programmes for nitrates and dangerous substances
need to be finalised and adopted by accession. As regards urban waste water, a
transitional arrangement until 31 December 2010, with intermediate targets, has been
agreed.
Substantial efforts are still needed in the field of
nature protection.
As regards
transposition, the adoption of framework legislation in this area has been delayed. Only
the
acquis
on zoos has been transposed in full. By contrast, the
acquis
on nature
protection and on endangered species, together with their implementing legislation, are
still pending. Enhanced efforts are required to prepare a list of proposed sites of
Community interest and to designate special protection areas by accession, and to ensure
that relevant protection measures are applied by accession. Administrative capacities are
in place, but further staff and technical equipment are needed to fulfil the requirements of
the
acquis,
as well as with regard to the consultation process.
The legislation on
industrial pollution
is in place and is in line with the
acquis.
Administrative capacities are in place and function, but more attention needs to be paid
to ensuring effective implementation of integrated pollution prevention and control
(IPPC), including enforcement. The capacity to issue integrated permits for all
installations subject to the rules on integrated pollution prevention and control (IPPC)
has been strengthened, but particular attention needs to be paid to ensure that permits are
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issued and complied with for all new IPPC installations by accession, and that permits
for existing installations continue to be issued and complied with until October 2007. As
regards
industrial risk management,
legislation is in place and is in line with the
acquis.
However, implementation of the provisions on major accident hazards requires
attention and needs to be completed by accession. As regards large combustion plants,
transitional arrangements until 31 December 2007 have been agreed for certain
installations in the Czech Republic.
The legislation concerning
chemicals and genetically modified organisms
(GMOs) has
been transposed and is in line with the
acquis,
except for the recent
acquis
on the
deliberate release into the environment of GMOs, which needs to be transposed by
accession. Administrative capacities are in place and function adequately.
Transposition of the
acquis
on
noise
is proceeding according to schedule and the
legislation is in line with the
acquis,
except for the recent
acquis
on ambient noise, which
needs to be completed by July 2004 in line with the Directive. Administrative capacities
are in place and function adequately.
On
nuclear safety and radiation protection,
legislative alignment has been completed
and the legislation is in line with the
acquis.
Administrative capacities in this area are
largely in place and function adequately.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations and is expected to be in a position to implement the
acquis
in the areas of
horizontal legislation, air quality, waste management, water
quality, industrial pollution and risk management, chemicals and genetically
modified organisms, noise
and
nuclear safety and radiation protection
by accession.
The Czech Republic still needs to finalise the legal alignment as regards the following
areas: horizontal legislation, air quality, waste management, water quality, genetically
modified organisms and noise. It needs to complete air quality plans and programmes
and continue to enhance air quality and water quality monitoring. Moreover, the Czech
Republic must complete inventories of and authorisations for discharges of dangerous
substances, finalise the necessary programmes on water, and improve co-ordination. The
establishment of waste collection systems and recovery and disposal facilities needs to
continue. On industrial pollution, administrative capacity requires particular attention to
ensure that permits for IPPC installations are issued and complied with according to
acquis
deadlines. As regards industrial risk management, the implementation of
provisions on major accident hazards needs to be completed.
The Czech Republic is partially meeting the commitments and requirements in the area
of
nature protection.
In order to complete preparations for membership, enhanced
efforts are required to finalise legal alignment, to prepare the lists of proposed nature
protection sites and special bird protection areas, and to strengthen administrative
capacity including with regard to the consultation process.
Chapter 23: Consumer and health protection
The
acquis
covers protection of the economic interests of consumers (concerning
misleading and comparative advertisement, price indication, consumer credit, unfair
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contract terms, distance and doorstep selling, package travel, timeshare, injunctions for
the protection of consumers’ interests, and certain aspects of the sale of consumer goods
and associated guarantees) as well as the general safety of goods (liability for defective
products, dangerous imitations and general product safety). Recently adopted legislation
includes rules on general product safety and distance marketing of consumer financial
services. The acceding countries need to effectively enforce the
acquis
through
appropriate judicial and administrative systems, including market surveillance and a role
for consumer organisations.
The Czech Republic has largely completed alignment of
safety-related measures.
An
amendment to the Act of General Product Safety was adopted in August 2003. It aims at
transposing the revised directive on general product safety.
Market surveillance
and
enforcement is well-established and although progress has been made in clarifying the
division of responsibilities between the organisations involved, further improvement is
needed, in particular as regards co-ordination amongst institutions. Furthermore, the
operability of the existing systems for market surveillance needs to be increased and
smooth and comprehensive information flows should be ensured. Preparations for Czech
participation in the RAPEX information system on dangerous products are ongoing. The
Czech Trade Inspection started exchanging information through PROSAFE, the “product
safety enforcement forum of Europe” dealing with the safety of consumer protection.
Legislative alignment in the area of
non-safety related measures
is largely completed.
The relevant institutional and administrative framework is in place but steady
strengthening of the relevant structures needs to continue. The Czech Republic has
introduced an alternative dispute resolution system in the banking sector, which is
financed by and operates as an independent department of the Czech National Bank
(CNB). A system for the out-of-court settlement of disputes outside the financial services
area should be developed as well. NGOs have been establishing networks of advisory
centres to assist on alternative dispute resolution, largely by enhancing both parties’
understanding of the legal situation and possible negotiated solutions.
Consumer organisations
are represented in the Consumer Advisory Committee, which
advises the Ministry of Industry and Trade. The number of active NGOs has increased
and now covers a broader area, including services (telecommunications, health, social
and legal services). Legal changes have allowed consumer organisations to commence
proceedings for an injunction for the protection of consumers’ interests. Integration of
consumer NGOs into European consumer structures such as BEUC, ANEC and AEC has
continued. Consumer organisations should participate more actively in the creation and
observation of product safety standards and in raising awareness of consumers' rights.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the areas of
safety-related measures, non-safety
related measures
and
consumer organisations
and is expected to be in a position to
implement this
acquis
as from accession.
The Czech Republic is meeting the majority of the requirements for membership in the
area of
market surveillance.
In order to complete preparations for membership, the
Czech Republic needs to improve market surveillance to ensure the proper enforcement
of legislation on safety and non-safety related measures including by strengthening the
administrative capacity and structures.
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Chapter 24: Justice and Home Affairs
The most developed part of this chapter is the Schengen
acquis,
which entails the lifting
of internal border controls. However, much of this
acquis
will not apply to the acceding
countries upon accession, but only after a later separate Council Decision. The Schengen
Implementation Action Plan aims at preparing this on the basis of a credible schedule for
the introduction of the Schengen provisions. Binding rules which must be put in place as
from accession include part of the rules on visas, rules on external borders and the acquis
on migration, asylum, police co-operation, combating organised crime, fight against
terrorism, fraud and corruption and drugs, customs co-operation as well as human rights
legal instruments. On issues such as border control, illegal migration, drugs trafficking
and money laundering, organised crime, police and judicial co-operation, data protection
and the mutual recognition of court judgements, acceding countries need to be equipped
to meet adequate standards of administrative capacity. The establishment of an
independent, reliable and efficient judiciary and police organisation are also of
paramount importance.
Preparation in the Czech Republic with regard to the Schengen provisions (Schengen
Action Plan)
relevant for accession is broadly satisfactory, but further efforts are still
required to conclude the remaining bilateral co-operation and re-admission agreements,
as well as an agreement with Slovakia restricting border crossings to designated points,
and to complete alignment of the border regime in respect of the border with Slovakia.
The Czech Republic should continue its preparations for the lifting of internal borders
and full implementation of the Schengen
acquis
on the basis of a further decision to be
taken by the Council. The preparation for integration into the Schengen Information
System (SIS) II is progressing according to schedule.
In the field of
data protection,
the Czech Republic has completed its legislative
alignment, including on the use of personal data by the police and customs authorities.
The national Office for Personal Data Protection needs to complete its recruitment of the
necessary additional staff, including sufficient police officers to deal with police data
storage.
On
visa policy,
the Czech Republic has almost completed approximation of its visa
regime, but still needs to align as regards EU visa-free travel and to introduce a
Schengen-type visa sticker following the transmission of the relevant technical
specifications by the EU in August 2003. Administrative structures are in place and are
functioning adequately.
As regards
external border control,
the Czech Republic has in general aligned its
legislation on border control and border surveillance. Attention should be paid to
finalising border control and crime prevention agreements with Poland, Slovakia and
Austria. Concerning border management, efforts need to be accelerated to conclude a
border management agreement with Slovakia. Controls at official border crossing points
are performed in a satisfactory manner, however special attention should be paid to
control of the green border with Slovakia.
In the area of
migration,
legislative alignment has been completed. The Czech Republic
is taking action to conclude readmission agreements with third countries, however
further efforts are required. The necessary administrative structures are in place and
function adequately. Efforts should be made to ensure the proper implementation, at
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regional and district level, of the rules on work and residence for EU and third country-
citizens.
In the field of
asylum,
the Czech Republic has largely completed alignment with the
acquis,
although it needs to be completed in the area of minimum standards for
temporary protection. As regards implementing capacity, the Czech Republic still needs
to increase the number of judges dealing with asylum appeals and step up specialised
training of the judiciary in the field of asylum law. Furthermore, the Czech Republic
should continue its analytical and organisational measures for active participation in
EURODAC. National Access Points need to be confirmed for EURODAC and Dublinet.
In the area of
police-cooperation and the fight against organised crime,
considerable
efforts are still required to ensure that the Czech Republic has an accountable, reliable
and fully co-ordinated police organisation by accession. The Czech Republic has signed
but not yet ratified the UN Convention against transnational organised crime, while the
three protocols to the Convention have not yet been signed. The Act on the Status of
Members of the Security Forces was adopted by the Parliament. The police Code of
Ethics still need to be adopted. The lack of a formally adopted police Code of Ethics is a
significant concern. Administrative capacity to deal with corruption within the police
force remains weak, and further efforts are needed to investigate crimes committed by
police officers. Further co-ordinated efforts are required to combat trafficking in women.
As regards administrative capacity, the merger of the police and investigators resulted in
the creation of a unified Criminal and Investigation Police, which has proved beneficial
in terms of improved efficiency, but internal co-operation between specialist police
departments still needs to improve. International co-operation is well-established and
supported by sufficient co-operation agreements, in particular the conclusion of an
agreement with Europol. Attention should be paid to the timely preparation of national
procedures in order to ensure the swift ratification of the Europol Convention upon
accession to the EU.
In the
fight against terrorism,
the Czech Republic still needs to ratify the 1999 UN
Convention for the Suppression of the Financing of Terrorism, and should accelerate its
efforts in this area. The Czech Republic should also continue its preparations to accede to
the Convention on Mutual Assistance in Criminal Matters between the EU and Member
States (2000) upon accession.
As regards the
fight against fraud and corruption,
the Czech Republic has largely
aligned its legislation with the
acquis,
including the 1995 Convention on the Protection
of the Communities’ Financial Interests and its Protocols and the Council Framework
Decisions on the protection of the euro against counterfeiting, although minor
amendments (the liability of legal persons and the confiscation of proceeds of crime) are
still required. The Czech Republic has taken measures to designate a National Central
Office dealing with banknote and coin analysis. The necessary implementing structures
are in place, however their effectiveness is not adequate in practice and further efforts
should be made to ensure adequate support staff for police investigators and prosecutors,
appropriate training and the development of a more co-ordinated multi-agency approach,
which has already been started by merging the Department for Revealing Corruption and
Major Economic Crime and the Bureau for Financial Crime and Protection of the State
into a single Unit for Combating Corruption and Financial Crime. As regards corruption,
see also
Section C.1. – Administrative and judicial capacity.
46
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On the
fight against drugs,
the Czech Republic has largely completed its legislative
measures, but still needs to ratify the 1995 Agreement on Illicit Traffic by Sea,
implementing Article 17 of the 1988 UN Convention. The National Strategic Plan for
2001-2004 is being implemented and the necessary administrative structures are in place
and are functioning well. However, further efforts should be made to promote better co-
operation between the National Drug Commission and police and customs. The National
Focal Point started operating in January 2003; the National Information Centre still needs
to be established for future co-operation with the European Centre for Drugs and Drug
Addiction.
The Czech Republic still has to amend its legislation on
money laundering.
The
administrative structures, including inter-agency co-operation, need to be further
strengthened, in particular, the inter-agency co-operation among the Financial Analytical
Unit, Prosecutors Offices and specialised police. Moreover, specialised training should
be provided (see
also Chapter 4 – Free movement of capital).
In the area of
customs co-operation,
the Czech Republic has largely aligned its
legislation. Preparations are being made for accession to the Naples II Convention on
Mutual Assistance and Co-operation and 1995 Convention on the Use of IT for Customs
Purposes. The necessary administrative structure is in place and training is ongoing,
however attention should be paid to the customs administration’s co-operation with other
law enforcement agencies in combating illegal immigration, corruption and drug
trafficking.
In the area of
judicial co-operation in civil and criminal matters
legislative alignment,
where still necessary, is ongoing, and the Czech Republic should be ready upon
accession to apply it and accede to the relevant conventions. Particular attention needs to
be paid to the alignment with Council Framework Decision of 13 June 2002 on the
European arrest warrant and the surrender procedure between Member States.
Administrative structures for direct contacts between competent judicial authorities are in
place and appear to function well.
As regards the
reform of the judiciary
in general, a detailed analysis is provided in
Section C.1. – Administrative and judicial capacity.
Most of the
human rights legal instruments
under the justice and home affairs
acquis
have been ratified by the Czech Republic.
Conclusion
The Czech Republic is essentially meeting the requirements arising from the accession
negotiations and is expected to be able to implement by accession the
acquis
in the areas
of the
Schengen Action Plan, data protection, visa policy, external borders,
migration, police co-operation
and
combating organised crime, fight against drugs,
fight against terrorism, customs co-operation, judicial co-operation in civil and
criminal matters
and
human rights legal instruments.
The Czech Republic is partially meeting the commitments and requirements for
membership in relation to the
fight against fraud and corruption
(including corruption
within the police), where capacity and effectiveness of implementing structures needs to
be enhanced and co-ordinating structures strengthened and
asylum,
where the number of
judges hearing asylum appeals need to be increased and their training, improved.
47
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Furthermore, in the area of
money laundering,
the Czech Republic needs to fully align
with the
acquis,
and inter-agency co-operation needs to be improved and strengthened.
Chapter 25: Customs Union
The Customs Union
acquis
consists almost exclusively of legislation which is directly
binding on the Member States and does not require transposition into national law. It
includes the Community’s Customs Code and its implementing provisions; the
Combined Nomenclature, Common Customs Tariff and provisions on tariff
classification, customs duty reliefs, duty suspensions and certain tariff quotas; and other
provisions such as those on customs control of counterfeit and pirated goods, drugs
precursors and cultural goods and on mutual administrative assistance in customs matters
as well as Community agreements in the areas concerned, including transit. Member
States must ensure that the necessary enforcement capacities, including links to the
relevant EC computerised customs systems, are in place.
The Czech Republic’s
customs legislation
is in line with the
acquis
up to 2002.
Implementation of the remaining provisions, (essentially 2003
acquis),
will take place
upon accession, when the EC customs legislation becomes directly applicable. National
provisions superseded by the
acquis
are to be repealed at the time of accession and
agreements on mutual administrative assistance in customs matters are to be amended as
necessary.
Concerning
administrative and operational capacity,
a functioning customs
administration is in place and is expected to reach an adequate level of administrative
capacity subject to completion of its preparations by the time of accession. The Czech
Republic is finalising plans for the reorganisation and closure of customs offices and the
redeployment of staff to address the decrease in customs work, following the conversion
of external to internal trade and the abolition of EU land frontiers as a result of accession.
The customs services’ capacity to combat fraud, piracy, counterfeiting and economic
crime, in close co-operation with other enforcement bodies, should continue to be
strengthened and inter-agency co-operation should be a priority. (See
also Chapter 5 –
Company law).
Preparation and training for the application of measures and provisions that will only be
introduced at the time of accession are ongoing. Continued training efforts should be
made in this respect.
The Czech customs administration is already meeting the majority of the operational
capacity and interoperability requirements for computerised systems and all projects are
on track to be completed before accession.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the area of
customs union
and is expected to be in a
position to implement the
acquis
from accession with the necessary administrative and
operational capacities.
48
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Chapter 26: External relations
The main element in this chapter, the common commercial policy, is made up of directly
binding EU legislation which does not require transposition into national law. The
acceding countries were requested to align before accession with the
acquis
on dual-use
goods and, where applicable, export credits. Acceding countries committed themselves to
ensure compatibility with the
acquis
of their bilateral agreements with third countries. In
the area of humanitarian aid and development policy, countries need to ensure the
capacity to participate in the EC’s development and humanitarian policies.
The administrative structures for dealing with the issues related to the
common
commercial policy
are in place and satisfactory. A new organisational structure has been
in place within the Ministry of Industry and Trade since October 2002, with a special
section for external economic relations and EU integration.
The Czech Republic has co-ordinated its positions and policies with the Commission
with regard to the Doha Development Agenda. The Czech Republic should continue
close co-ordination and co-operation with the Commission, mainly in order to carry on
preparing the convergence of its GATS commitments and MFN exemptions into the EU
ones (consolidation EU 25), to be finalised upon accession. Concerning alignment of the
list of integrated products under the Agreement on Textiles and Clothing, the Czech
Republic has co-operated with the Community in the process of third stage notification.
As regards dual-use goods, the Czech Republic has reached a high degree of alignment
with the
acquis.
However, further alignment, in particular regarding the list of dual-use
items, needs to be achieved, as export control regimes continue to adopt decisions, which
the EU integrates into its legislation. Full alignment as regards the Community general
export authorisation can only take place upon accession.
Legislative alignment in the field of export credits has been achieved, and the relevant
administrative structures are in place and functioning well.
The Czech Republic has completed the analysis of its
bilateral agreements with third
countries
and needs to take further steps to complete the ongoing process of termination
or re-negotiation of those international agreements which were found to be incompatible
with the
acquis.
So far, 20 agreements with third countries will be terminated upon
accession at the latest. Following the successful signature of the Memorandum of
Understanding regarding the bilateral investment treaty (BIT) between the Czech
Republic and the USA, the Czech Republic still needs to sign with the USA the
Additional Protocols to the BIT. The Czech Republic must then ensure swift ratification
in order for the adaptations to enter into force by the date of its accession to the EU.
Furthermore, among other agreements, the Foreign Investment Protection Agreement
concluded with Canada, as well as the trade agreement with Japan need to be brought
into conformity with the
acquis.
As regards
humanitarian aid and development policy,
the Czech Republic follows the
main principles of the EU’s development and humanitarian aid policies and is advancing
in establishing the framework for development assistance, in particular with the
guidelines laid down by the OECD Development Assistance Committee as well as the
commitments and objectives that the Czech Republic has approved in the context of the
UN and other international organisations. In 2002, a new Concept was developed for
Czech Foreign Development Aid, in line with UN Millennium Development goals. In
49
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March 2003, the Government adopted a Medium Term Outlook for Foreign
Development Aid Financing (2002-2007), including targets for the direct aid/GDP ratio.
Humanitarian aid has been provided on a reasonable scale through international bodies,
the Red Cross and Czech-based NGOs. The Czech Republic is advancing in establishing
the administrative framework for humanitarian aid and development assistance. A new
department for development co-operation and humanitarian aid was created in June 2003
within the Ministry of Foreign Affairs, together with the post of National Co-ordinator of
Foreign Development Assistance. However the institutional structure is still fragmented
and implementing capacity needs to be strengthened further.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the areas of
common commercial policy
and
humanitarian aid and development policy
and is expected to be able to implement the
acquis
from accession.
The Czech Republic is meeting the majority of the commitments and requirements for
membership in the area of
bilateral agreements with third countries.
In order to
complete preparations for membership in this area, the Czech Republic must finalise the
steps it has taken to renegotiate or terminate its bilateral agreements to make sure that
they are compatible with the
acquis
upon accession.
Chapter 27: Common foreign and security policy
The
acquis
related to the common foreign and security policy (CFSP) is essentially based
either on legally binding international agreements or on political agreements to conduct
political dialogue in the framework of CFSP, to align with EU statements, and to apply
sanctions and restrictive measures where required.
The Czech Republic has the required administrative capacity to participate in the
political dialogue.
With regard to alignment with
EU sanctions and restrictive
measures, statements, declarations and démarches,
the Czech Republic still needs to
adjust legislation in relation to introduction and withdrawal of economic sanctions.
Moreover, the implementation of the EU Code of Conduct for Arms Exports and the
fight against unauthorised weapons transfers should be enhanced. The administrative
structures in this area in the Czech Republic are in place and satisfactory.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the chapter on the
common foreign and security
policy,
and is expected to be able to participate in the political dialogue and to align with
EU statements, sanctions and restrictive measures by accession.
Chapter 28: Financial control
The
acquis
under this chapter consists mostly of general, internationally agreed and EU-
compliant principles of public internal financial control that need to be transposed into
the control and audit systems of the entire public sector. In particular, the
acquis
requires
the existence of adequate ex ante financial control and functionally independent internal
50
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audit systems; an independent external audit of the public internal financial control
systems in the public sector; an appropriate financial control mechanism for EU pre-
accession funding and future structural action expenditure; and arrangements on the
protection of EC financial interests. In addition, an anti-fraud co-ordination service,
capable of co-operating with the Commission’s Anti-fraud Office OLAF at an
operational level, is to be designated.
In the area of
public internal financial control,
the framework legislation is in place
and in line with the
acquis,
but the Czech Republic needs to complete the necessary
implementing legislation. The Central Harmonisation Unit was established in July 2003
and its effective operation should be ensured. The internal audit units in all budget-
spending centres with internal audit focusing on system-based and performance-audit
functions need to be adequately staffed with well-trained and experienced personnel.
In the field of
external audit,
legislative alignment has been completed. The Supreme
Audit Office (SAO) is incorporating international audit standards into its current work.
The SAO is functionally and operationally independent and its audit services
satisfactorily cover all public and EU funds.
As regards
control over structural action expenditure,
the framework legislation in the
Czech Republic is in place and in line with the
acquis.
However, the implementing
legislation remains to be completed. Appropriate administrative structures are being set
up and the Czech Republic should enhance its administrative capacity to manage the pre-
accession funds and future structural funds in order to meet the requirements for financial
control and internal audit. In particular, recruitment of additional staff for the pre-
accession funds, and for the Structural and Cohesion Funds, should be reinforced and
accompanied by training measures. The Czech Republic must urgently accelerate efforts
to implement the extended decentralised implementation system (EDIS) for ISPA and
Phare.
In the area of the
protection of EC financial interests,
the Czech Republic has further
completed the framework and implementing legislation. The Supreme Public
Prosecutor’s Office has been designated as the Czech anti-fraud co-ordinating service
(AFCOS). A co-operation arrangement was agreed with OLAF, and relations with other
Czech services were specified. Attention should now be placed to ensuring
implementation of effective co-operation of AFCOS with other relevant Czech
institutions and bodies, and with OLAF.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the areas of
external audit
and
protection of the EC
financial interests
and is expected to be in a position to implement this
acquis
as of
accession. In the latter area, efforts should focus on effective implementation of the
recently adopted legislation and co-operation arrangements.
The Czech Republic is meeting the majority of the commitments and requirements
arising from accession negotiations in the area of
public internal financial control
and
control over structural action expenditure.
In order to complete preparations for
membership, attention must be paid to strengthening the administrative structures
including defining detailed responsibilities for all bodies involved, and in particular the
internal audit units in all budget-spending centres. The functioning of the recently
51
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established Central Harmonisation Unit should be ensured. Enhanced efforts must also
be made to complete the extended decentralised implementation system (EDIS).
Chapter 29: Financial and budgetary provisions
Chapter 29 covers the rules concerning the financial resources necessary for the funding
of the EC budget (‘own resources’). These own resources are made up mainly from
contributions from Member States based on 1) traditional own resources from customs
and agricultural duties and sugar levies, 2) a resource based on VAT and 3) a resource
based on the level of gross national income (GNI). Member States must ensure the
creation of appropriate administrative capacity to adequately co-ordinate and ensure the
correct calculation, collection, payment and control of own resources and reporting to the
EU for implementation of the own resources rules.
As regards the
traditional own resources (TOR),
a national reporting system on cases
of fraud and irregularity is under preparation in the Czech Republic. Moreover, the
information requirements of reporting to the Commission in line with the OWNRES
system should be examined closely. The State Agriculture Intervention Fund has been
designated as the authority responsible for administration of sugar levies. The A and B
accounts in line with the EC system are not yet fully in place.
The Czech Republic still needs to improve its ability to correctly calculate the
VAT-
based resource,
in particular as regards the calculation of the weighted average rate in
accordance with ESA95.
For calculation of the
GNI-based resource,
continued efforts are needed by the Czech
Republic to further improve the quality and reliability of the national accounts and GNI
calculations in line with ESA95, including their exhaustiveness.
All institutions necessary for application of the own resources system in the Czech
Republic exist. A unit within the Ministry of Finance co-ordinates own resources issues
and is operating effectively.
Conclusion
The Czech Republic is essentially meeting the commitments and requirements arising
from the accession negotiations in the area of
financial and budgetary provisions
and is
expected to be in a position to implement the relevant
acquis
by the date of accession.
The Czech Republic should now focus attention on completing preparations under this
chapter by establishing procedures for sending reports on cases of fraud and irregularity
to the Commission (OWNRES), further improving the reliability of GNI statistics and
the calculation of the VAT-based resource, finalising the procedures for keeping the A
and B accounts, and further developing the procedures for accounting and recovery of
sugar levies.
52
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D.
C
ONCLUSION
The Czech Republic has broadly maintained macroeconomic stability. However, public
finances have deteriorated. The Czech Republic continued on its reform path, albeit
hesitantly.
As regards the areas, where last year’s report suggested improvements, some progress
has been made, but challenges remain. The continued deterioration of the general
government deficit led the government to undertake steps towards the consolidation of
the public finances and to present a set of measures aiming at bringing the deficit down
to 4% by 2006. A deeper and a more comprehensive reform affecting the social benefits
and the pension system and healthcare is needed. The Czech Consolidation Agency
resumed the selling off of bad assets to private investors. This process should accelerate
in order to free the economy from misallocated resources.
As regards overall administrative and judicial capacity, sufficient conditions are in place
for the implementation of the
acquis
by the Czech public administration and judiciary,
but there is room for further improvements. In the field of public administration,
sufficient resources should be allocated to the implementation of the Civil Service Act,
which will enter into force on 1 January 2005. As regards the judicial system, a key area
for further improvement is the reduction in length of court proceedings. The fight against
corruption should continue to receive high priority, in particular the actual prosecution of
corruption cases needs to be stepped up.
As regards the implementation of the
acquis
in specific policy areas, the findings of this
report are set out below.
Firstly, it should be noted that the Czech Republic has reached a
high level of alignment
with the acquis
in most policy areas.
It is expected to be in a position to implement the
acquis
as required in the following
areas by accession: horizontal and procedural measures, new approach legislation and the
non-harmonised area in the
free movement of goods
chapter; citizens’ rights, free
movement of workers and co-ordination of social security systems, in terms of
free
movement of persons;
the banking sector, investment services, securities markets and the
protection of personal data in the area of
freedom to provide services;
capital movements
and payments, and payment systems related to the
free movement of capital; company
law
and accounting; and anti-trust rules in
competition policy.
In the area of
agriculture,
the Czech Republic is expected to be in a position by accession to implement the
acquis
in a number of horizontal areas, in most common market organisations, as regards animal
disease control in the veterinary area, and in rural development; and in
fisheries.
The Czech Republic is also expected to be in a position to implement the
acquis
by
accession in: most areas in the
transport
sector;
taxation; economic and monetary union;
statistics;
labour law, equal treatment of women and men, social dialogue, public health,
employment policy, social inclusion and social protection in the area of
social policy and
employment;
the
energy
sector;
industrial policy; small and medium-sized enterprises;
science and research; education and training;
the postal services sector in the area of
telecommunications and information technologies;
culture in the area of
culture and
audio-visual policy;
territorial organisation and programming in the area of
regional
policy and co-ordination of structural instruments;
horizontal legislation, air quality,
waste management, industrial pollution and risk management, water quality, chemicals
and genetically modified organisms, noise and nuclear safety and radiation protection in
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the area of
environment
policy; safety-related measures, non-safety measures and
consumer organisations in terms of
consumer and health protection;
almost all aspects of
justice and home affairs; customs union;
the common commercial policy, and
humanitarian aid and development policy in the
external relations
acquis;
common
foreign and security policy;
external audit and protection of the EC financial interests in
the area of
financial control;
and
financial and budgetary provisions.
Secondly, in certain areas the Czech Republic partially meets the commitments and
requirements and needs to make
enhanced efforts
in order to complete its preparations
for accession.
This includes the old approach sectoral legislation and public procurement in the area of
free movement of goods;
in the area of
free movement of services,
the fields of insurance,
information society services, and the right of establishment and the freedom to provide
non-financial services; in the fields of
free movement of capital,
the fight against money
laundering; within the area of
company law,
the protection of intellectual and industrial
property rights; and state aid rules in
competition policy.
In the
agriculture
area it
concerns the Paying Agency, the Integrated Administration and Control System, trade
mechanisms, the common market organisations for sugar, wine and alcohol, and
beefmeat, and nearly all phytosanitary and veterinary issues.
This also includes the fields of: health and safety, the European Social Fund and anti-
discrimination in the area of
social policy and employment;
the
telecommunications
sector; audio-visual policy in the area of
culture and audio-visual policy;
institutional
structures, the legislative framework and financial management and control in the area of
regional policy and co-ordination of structural instruments;
nature protection in the area
of
environment
policy; market surveillance in the area of
consumer and health
protection;
the fight against fraud, corruption and money laundering, and asylum in the
area of
justice and home affairs; external relations,
as regards bilateral agreements with
third countries; and public internal financial control and control over structural action
expenditure in the area of
financial control.
Thirdly, the Czech Republic must take immediate and decisive action to address three
issues of
serious concern
in three chapters of the
acquis
if it is to be ready by the date of
accession.
This concerns the field of
free movement of persons,
relating to the Czech Republic’s
preparations for mutual recognition of qualifications of certain professions, including in
the healthcare sector. In the field of
agriculture,
it concerns progress in the upgrading of
agri-food establishments in order to meet public health requirements. Finally, it concerns
the field of road
transport,
where the implementation of the social and technical
acquis
should be considerably reinforced.
54
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1465022_0055.png
S
TATISTICAL ANNEX
1998
Basic data
Population (average) a)
Total area
National accounts
Gross domestic product at current prices
Gross domestic product at current prices
Gross domestic product per capita b) at current
prices
Gross domestic product at constant prices (nat.
currency)
Employment growth
Labour productivity growth
Unit labour cost growth
Gross domestic product per capita b) at current
prices
GDP per capita b) at current prices in PPS
Labour productivity (GDP per person employed in
PPS)
Structure of production
- Agriculture
- Industry (excluding construction)
- Construction
- Services
Structure of expenditure
- Final consumption expenditure
- household and NPISH
- general government
- Gross fixed capital formation
- Stock variation d)
- Exports of goods and services
- Imports of goods and services
Inflation rate
Consumer price index
1,839
50.6
4,900
10,295
78,860
1999
10,283
78,864
2000
in 1000
10,273
in km²
78,865
2001
10,224
78,865
2002
10,201
78,868
in 1000 Mio Czech Koruna
1,902
51.6
5,000
1,985
55.8
5,400
2,175
63.8
6,200
2,276
73.9
7,200
1000 Mio ECU/euro
in ECU/Euro
% change over the previous year
-1.0
-1.4
0.4
-2.2
12,700
0.5
-2.1
2.6
1.1
12,500
3.3
-0.7
4.0
1.3
12,700
3.1
0.4
2.7
-1.7
13,800
2.0
1.0
1.0
2.8
14,400
in Purchasing Power Standards
in % of EU-15 average
63
57
59
55
56
54
59
57
60
56
% of Gross Value Added c)
4.6
32.5
7.2
55.7
71.2
52.5
18.6
29.1
0.9
58.8
60.0
4.2
31.8
7.2
56.8
73.2
53.6
19.6
27.8
0.3
60.6
61.9
4.3
32.3
7.1
56.3
73.7
54.1
19.6
28.3
1.3
69.8
73.2
4.3
32.7
6.7
56.2
73.2
53.1
20.0
27.7
1.8
70.8
73.5
3.7
31.9
6.6
57.9
74.2
52.8
21.4
26.3
1.8
65.2
67.5
as % of Gross Domestic Product
% change over the previous year
9.7
1.8
3.9
4.5
1.4
55
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1998
Balance of payments
-Current account
-Trade balance
Exports of goods
Imports of goods
-Net services
-Net income
-Net current transfers
-
of which: government transfers
- FDI (net) inflows
Public finance
General government deficit/surplus e)
General government debt
Financial indicators
Gross foreign debt of the whole economy
Gross foreign debt of the whole economy
Monetary aggregates f)
- M1
- M2
- M3
Total credit
Average short-term interest rates
- Day-to-day money rate
- Lending rate
- Deposit rate
ECU/EUR exchange rates
- Average of period
- End of period
- Effective exchange rate index
Reserve assets g)
-Reserve assets (including gold)
-Reserve assets (excluding gold)
External trade
Trade balance
Exports
Imports
Terms of trade
Exports with EU-15
Imports with EU-15
-2,209
22,969
25,178
106.3
64.0
63.5
10,765
10,693
36.32
35.19
102.0
13.6
13.5
11.1
:
30.5
11.5
35.3
-1,187
-2,269
23,412
25,680
1,593
-873
362
63
2,416
1999
-1,470
-1,785
24,638
26,423
1,033
-1,198
479
56
4,792
2000
-2,946
-3,394
31,492
34,886
1,533
-1,488
404
261
:
2001
2002
in Mio ECU/euro
-2,930 -4.692 k)
-3,425
37,267
40,692
1,702
-1,729
522
269
:
:
:
:
:
:
:
5,489 9.889 k)
in % of Gross Domestic Product
-4.5
13.7
-3.7
14.3
-4.0
16.6
-5.5
23.3
-3.9p
27.1p
in % of Gross Domestic Product
21.3
22.0
28.8
26.6
as % of exports
36.2
36.2
12.4
37.0
:
28.6
6.8
9.0
11.4
36.88
36.10
:
30.6
5.3
8.0
5.8
35.60
35.05
% per annum
5.0
7.8
3.8
34.07
31.96
113.6
16,410
16,271
41.2
14.2
40.3
:
29.7
37.5
18.3
49.9
:
:
1000 Mio ECU/euro
21.4
53.1
:
30.4
3.6
7.3
3.0
30.80
31.58
126.8
22,812
22,670
(1ECU/euro=..Czech Koruna)
1995=100
106.9
108.7
Mio ECU/euro
12,888
12,762
14,173
14,043
Mio ECU/euro
-1,746
24,638
26,384
98.5
69.2
64.2
-3,394
31,492
34,886
97.2
68.6
62.0
-3,425
37,267
40,692
101.9
68.9
61.8
-2,315
40,722
43,038
101.5
68.4
60.2
previous year=100
as % of total
56
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1465022_0057.png
1998
Demography
Natural growth rate
Net migration rate (including corrections) h)
Infant mortality rate
Life expectancy :
Males:
Females:
Labour market (Labour Force Survey)
Economic activity rate (15-64)
Employment rate (15-64), total
Employment rate (15-64), males
Employment rate (15-64), females
71.7
67.3
76.0
58.7
71.1
78.1
-1.8
0.9
5.2
1999
-2.0
0.9
4.6
71.4
78.1
2000
-1.8
0.6
4.1
at birth
71.6
78.3
2001
-1,7
-0,8
4.0
72.1
78.4
2002
-1,5
1.2
4.1
72.1
78.5
per 1000 of population
per 1000 live-births
% of population
71.8
65.6
74.0
57.4
71.2
65.0
73.2
56.9
70.7
65.1
73.3
57.0
70.6
65.5
74.0
57.1
as % of the total population of the same age group
Employment rate of older workers (55-64)
Average employment by NACE branches
- Agriculture and forestry
- Industry (excluding construction)
- Construction
- Services
Unemployment rate, total
Unemployment rate, males
Unemployment rate, females
Unemployment rate of persons < 25 years
Long-term unemployment rate
Social cohesion
Inequality of income distribution
Early school-leavers
Population in jobless households (persons aged
0-65)
Standard of living
Number of cars
Main telephone lines
Number of subscriptions to cellular mobile
services
Infrastructure
Railway network
Length of motorways
120
499
339.5
363.6
94.1
:
:
8.3
5.6
31.5
10.0
52.9
6.4
5.0
8.1
10.8
2.0
37.1
37.5
5.3
31.1
9.4
54.1
8.6
7.2
10.3
16.6
3.2
36.3
5.2
30.6
9.4
54.8
8.7
7.3
10.3
17.0
4.2
37.1
4.9
31.4
9.1
54.6
8.0
6.7
9.7
16.3
4.3
40.8
4.9
31.2
8.9
55.0
7.3
5.9
9.0
15.4
3.7
in % of total
% of labour force
ratio of top quintile to lowest quintile
:
:
9.4
:
:
10.2
:
:
10.5
:
5.5
9.9
% of population aged 18-24
% of population aged 0-65
per 1000 inhabitants
334.7
370.3
189.2
335.0
377.1
423.3
345.2
377.6
679.5
357.5
360.3
844.1
in km per 1000 km²
120
km
499
499
517
518
120
121
122
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1465022_0058.png
1998
Industry and agriculture
Industrial production volume indices i)
Gross agricultural production volume indices
Innovation and research
Spending on Human
expenditure on education)
Resources
(public
4.20
101.9
100.7
1999
96.9
100.6
2000
105.4
95.5
2001
106.5
102.5
2002
104.8
95.6
previous year=100
as % of GDP
4.34
4.38
4.28E
4.39E
as % of GDP
Gross domestic expenditure on Research &
Development
Level of Internet access - households
Environment
Total greenhouse gases emissions
Energy intensity of the economy
Share of renewable energy
Modal split of freight transport
p=provisional figures
E=estimated data
a) Population stocks for the year 2001 were changed in the light of preliminary results of the census hold at 1 March
2001, definitive results will be available in 2003.
b) Figures have been calculated using the population figures from National Accounts, which may differ from those used
in demographic statistics.
c) Including FISIM.
d) These figures include changes in inventories,
acquisitions
less disposals of valuables and the statistical discrepancy
between the GDP and its expenditure components.
e) Excluding losses of CKA (Czech Agency for Consolidation). These worsen general government net borrowing for
2001 and 2002 by an estimated CZK 14.3 billion and 76.4 billion respectively.
f) For 2002 : value at the end of October.
g) For 2002 : value at the end of November.
h) Change of methodology in 2001 following UN Recommendations of 1998.
i) Year-on-year monthly indices are derived from the monthly basic IPIs. Since 2002 monthly basic IPI is calculated on
new 2000 base.
j) Conversion to EUR made by means of the annual average rate of exchange released in AMECO Database.
k) Source: Website of the National Bank
1.24
1.24
1.33
:
:
per 1000 inhabitants
:
:
8
11
:
tonnes CO2 equivalent per capita
77.1
1000.5
2.2
72.8
928.2
2.7
76.4
947.6
2.8
:
:
:
:
:
:
:
kg of oil equivalent per 1000 euro of GDP
as % of total electricity consumption
as % of total freight transport
63.3
67.7
68.1
69.7
Methodological notes
Inflation rate
For
details
please
refer
to
the
following
link
to
the
Eurostat
website:
http://europa.eu.int/newcronos/suite/info/notmeth/en/theme1/strind/ecobac_ir.htm
Finance
Public finance:
The general government deficit / surplus refers to the national accounts concept of
consolidated general government net borrowing / net lending (EDP B.9) of ESA95. General government
debt is defined as consolidated gross debt at end-year nominal value.
External trade
Imports and exports (current prices).
The data is based upon the special trade system. Trade Classification:
Trade in goods are recorded using the commodity classification according to the Combined Nomenclature.
Imports are recorded on CIF basis, exports on FOB basis.
Imports and exports with EU-15.
Data declared by the Czech Republic.
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1465022_0059.png
Labour market
Indicators are harmonised annual figures with the exception of average employment by NACE branches
and unemployment rate of persons < 25 years, which are for the 2
nd
quarter of the respective year. The
results are based on the European Union Labour Force Survey (LFS). The EU LFS is conducted on a
quarterly basis in accordance with Council Regulation (EEC) No. 577/98 of 9 March 1998.
For
details
please
refer
to
the
following
link
on
the
Eurostat
website:
http://europa.eu.int/newcronos/suite/info/notmeth/en/theme1/strind/emploi.htm
Social cohesion
For
details
please
refer
to
the
following
link
on
the
Eurostat
website:
http://europa.eu.int/newcronos/suite/info/notmeth/en/theme1/strind/socohe.htm
Industry and agriculture
Industrial production volume indices.
Industrial production covers mining and quarrying, manufacturing
and electricity, gas, steam and water supply (according to the NACE Rev.1 Classification Sections
C,D,E). Industrial production index (IPI) is calculated by the method corresponding to the international
standards based on the production statistics of selected products (.Series-witness.). It covers 88,6 % of
industrial production in the Czech Republic. Until 2001 published IPI for the Czech Republic are
calculated in weights of 1995. Since 2002 IPI are calculated on new 2000 base. No adjustments were done
as concerns seasonal influences and number of working days.
Total agricultural output volume indices.
Indices based on evaluation of all individual products of gross agricultural production in constant prices of
1989.
Innovation and research
For
details
please
refer
to
the
following
link
to
the
Eurostat
website:
http://europa.eu.int/newcronos/suite/info/notmeth/en/theme1/strind/innore.htm
Environment
For
details
please
refer
to
the
following
link
to
the
Eurostat
website:
http://europa.eu.int/newcronos/suite/info/notmeth/en/theme1/strind/enviro.htm
Sources: Total area, External trade, Demography, Standard of living, Infrastructure, Industry and
agriculture: National sources. Other indicators: Eurostat.
59