The Republic of Serbia

The Government of the Republic of Serbia
The Anti-Corruption Council
No.: Official
June 4, 2007
Belgrade

THE GOVERNMENT OF THE REPUBLIC OF SERBIA
Prime Minister Vojislav Kostunica
Deputy Prime Minister Bozidar Djelic

Dear Sirs,

At its session held on May 30, 2007 the Anti-Corruption Council considered the most important issues of the fight against corruption in Serbia. We deem necessary that the Government establishes a plan and program of its anti-corruption activities at the beginning of its mandate, enabling thus the implementation of the Anti-Corruption Strategy. The Council deems that the following issues require a special attention:

1. Establishing the public control of the public finances, due to the fact the implementation of the Law on the State Audit Institution is more then one year behind.
2. Adherence of the internationally recognized regulations on the budgetary system and observance of the obligations prescribed by the Law, namely the Government’s obligation to submit the budgetary reports and the reports of the Budgetary Inspection to the National Assembly. In connection with this issue, the Council points out that the National Investment Plan was a major source of corruption in the past, due to which a complete audit of the idea of the National Investment Plan as a way to finance big infrastructure structures should be performed.  
3. Problems in the field of the Public Procurement like the lack of competition in the process of the collection of the public tenders, protection of the bidder’s rights, and the implementation of the Decree on Special Procurement Funds. Also, two segments especially important for curbing corruption remained unregulated in this field so far – planning of the public procurement, and the control of the concluded contracts.
4. The lack of the control of the financing of political parties. It is clear that the public and other companies in the state ownership are in the hands of the political parties instead of the state. Parties use public companies as a source of their finance, which represents one of the fundamental origins of the unlimited power of the political parties in Serbia, and one of the major sources of the systemic corruption.   
5. Monopolization of the market due to poor legal framework and non-functioning of the institution in charge of the fight against monopoly. 
6. Harmonization of the regulations governing the work of the capital market. 
7. Delay and the insufficient transparency in the process of privatization. The recent changes in the Law on Privatization only increased the already strong opportunities for corruption in this procedure, especially trough the introduction of the institution “ debt writ-off’’, unknown in the practice of other countries. On February 3, 2005 the Council addressed these issues and forwarded the respective Report to the Government. 
8. We particularly point out to the non-existence of the working conditions for the independent, regulatory institutions, as well as their autonomy and quality work.
9. Decision on the approval of the Concession for the Construction of the Highway Horgos-Pozega was made by violation of the envisaged procedure. The explanation for the rendering of this Decision shows no apparent public interest. It is especially disturbing that Vojvodina was shut out from the process of decision making. Also, the refusal of the relevant Minister to disclose the Contract on Concession to Vojvodina, as well as to the public, even though the Commissioner for the Information of Public Importance insisted upon it. This example clearly points out to an another major problem in curbing corruption in Sebia, and that is the inadequate implementation of the Law on Free Access to the Information, one of the fundamental laws in the prevention of corruption. 

The Council gave a full consideration to these issues taking into account the particular cases, and we are willing to give a detail explanation and assist in the elaboration of the specific measures and suggestions for the changes and amendment to the regulations in order to solve these problems. 

Today’s implementation of the anti-corruption and other laws requiring the anti-corruption instruments show that the laws have serious drawbacks, which disable their implementation. The analysis of these problems in the implementation of laws, and finding out solutions, as well as overcoming week spots in the field of curbing corruption, would make a realistic foundation for the implementation of the Action Plan for the implementation of the Anti-Corruption National Strategy.  It would also benefit the harmonization of the regulations into a comprehensive legal framework aimed at the fight against corruption.  

The Council understands that each of these issues is a complex one, and that it is not easy to find good solutions for curbing systemic corruption, which rules our society.

We recommend a meeting between the Prime Minister, Deputy Prime Minister and the Anti-Corruption Council, above all, in order to establish the fashion of communication and the cooperation in solving these issues.

Yours faithfully,

President 
Mrs. Verica Barać