Stalled EU accession attributed to the level of organised crime

In order to respond to this question, a set of EU assessments of progress in the field of organised crime, drug trafficking ad corruption was utilised. This data was supplemented by reference to the topics obtained in the interviews. Unlike in previous enlargement phases, the EU membership today requires fulfilment of a set of conditions of democratic “standards”. While other democratizing countries throughout the world were seeking to integrate their politics and economy within the larger global market, the position of candidate countries today is unique as they are obligated to conform to an additional set of rules in order to meet the requirements for EU membership.

It is therefore important to note that the EU has changed the methods to monitor progress starting from 2014. Therefore, the progress of candidate countries in the process of EU accession is nowadays measured by more comprehensive reports, organised per clear indicators. The findings of this research are presented by using similar criteria.

In order to monitor the progress of candidate countries, the EU utilises a variety of specific tools, such as the annual progress reports. peer-review missions, rule of law advisory/expert missions and enhanced monitoring of reforms. By making these reports available to the relevant state

152 actors, the EU attempts to assist them in addressing the key obstacles in the given field to foster implementation of the accession related criteria. In these tools, a specific “EU wording” is utilised, for instance, to assert that there is no progress in a certain field, or that the field remains problematic. In this line, based on the new EU assessment methodology, most countries have only “some level of preparation” in the areas of the rule of law, including functioning of the judiciary, fight against organised crime and fight against corruption. The following findings were identified with regard to EU assessments of the progress of Serbia:

Corruption remains prevalent in many areas and remains a serious problem. The ratio of convictions to indictments is low.

(Progress report 2014, p.2) Serbia has some level of preparation in the fight against organised crime. Serbia has partially fulfilled last year’s recommendations... Efforts to investigate wider criminal networks and to process money laundering cases still need to be stepped up.

(Progress report 2015, p. 15 and 2016, p. 17) Serbia is a transit country for illegal migration and the smuggling of drugs, firearms and other commodities.

Combating these phenomena and establishing appropriate border management, including management of

‘green’ borders, needs to be further strengthened.

(Progress report 2018, p. 38):

Serbia has some level of preparation in the fight against corruption...However, corruption remains widespread and strong political impetus has yet to translate into sustained results.

(Progress report 2015, p.4) The operational capacity of relevant institutions remains uneven and law enforcement and judicial authorities still need to prove that they can pro-actively investigate, prosecute and try all high-level corruption cases in an unbiased and operationally independent manner. There is as yet no measurable impact of anti-corruption reforms.

(Progress report in 2018, p.4)

Overall, in its progress reports, the EC identified various shortcomings related to the fight against organised crime, including inter alia, lack of intelligence-led investigations aimed at dismantling

153 networks involved in organised crime and money laundering, lack of secure platform to exchange intelligence between law enforcement agencies, the need to reinforce independence of the internal control sector of the police. In view of the potential accession of Serbia, these are all rather serious issues.

The participants also referred to endurance of organised crime as an important factor hindering progress in EU accession. An interesting statement is provided below:

Imagine if the EU would actually accept Serbia as a member state... that would be like if you were dating a girl 20 years ago, who was normal back then... but the next 20 years she has been doing drugs, working as a prostitute... And then you meet her and marry her.

(A participant from a state institution, P1.3) If you look at the court decisions, it is clear that the EU will never accept us… most of the criminals are never found guilty, or they never actually go to prison (P1.16)

The convicted drug traffickers appear in football games among key club supporters…the media publish such photos and nothing happens… the EU is monitoring all of this, what kind of image are we sending as a country… (P4.5).

The shortcomings presented above appear in almost identical wording in consecutive reports of the European Commission. A detailed comparison of these shortcomings and linked recommendations of the EC is perhaps the best indicator of the lack of progress during time. This certainly raises questions as to the key underlying reasons for such situation.

It could be argued that this process has been delayed as a consequence of incomplete democratic transition in Serbia. As discussed above, similar obstacles to finalisation of transition are noticed.

In that context, it cannot be expected that a state which has not effectively transited into democracy would be swift in implementation of the EU reforms.

Others perceive that the problem of overly prolonged accession of Western Balkan states is associated with the lack of political will within the EU itself. For instance:

Accession is currently on hold...it has a set of issues surrounding it, such as migration, terrorism, euro scepticism, relations with Russia... but it seems Brussels is unconsciously hindering the process... the process is there, but there is no political will.

(Florian Biber, coordinator of Balkans in Europe Policy Advisory Group, cited in Vreme, 22 Dec. 2016, p. 22 )

154 The Enlargement Strategy is going very slow... the reports are being produced, but the rule of law remains a challenge.

(Ervan Fuere, researcher, Centre for studying EU policies, Brussels, in Vreme 18 October, 2018)

I think Serbia will never enter the EU... The fact is that the EU does not want to accept the Western Balkan states, because the EU is not anymore what it used to be or what it could have been.

(Vladeta Jankovic, professor, cited in Vreme 5 July 2018)

The only time the key politicians from the region were invited to sit together at a table with the EU politicians was in 2015 when the topic was the migrant crisis and the Balkan route... not before, and never after.

(Sonja Liht, Fund for Political Excellence, in Vreme 18 October 2018)

On the contrary, there are perceptions that the problem is in the EU approach. Some authors maintain that the EU policy towards candidate countries has not been effective do to the use of conditionality. For instance, Mendelski (2015) suggests that the effects of reforms depend on the interplay between domestic conditions and the EU reform approach. In this context, progress of Serbia in the field of rule of law appears to be strongly affected by domestic conditions.

Commission’s Progress report 2017³⁹ on Serbia identifies several internal constraints to the implementation of good governance principles, such as corruption, organized crime, lack of independence, transparency and accountability in key institutions. It could be argued that Serbia adopted some legislative changes as a result of conditionality, but has not been able to implement them, thus facing continuous low track record.

Moreover, the effects of the process of enlargement are heavily debated in political and academic discourse at the level of EU, particularly with respect to the rule of law. Therefore, Serbia as a candidate country will be particularly monitored with respect to a tangible progress under Chapter 23, which will not be measured by the number of amended laws, but recorded by the track record in their implementation. The term track record is usually used to measure the relevant data requested by the European Commission for the purposes of progress assessment.

39 See also the EC Progress Report 2016. The Report indicates a lack in judicial independence and impartiality as well as the pathology of politicisation of judicial structures. This signposts that judges’ accountability is not ensured in practice and that the pathology of lack of enforcement of law continues to exist. The Report states that corruption is still highly present and without progress compared to previous years, which indicates the existence of corruption in the judiciary.

155 The review of the specific Track Record Tables on organised crime and high-level corruption cases, performed as a part of data analysis, clearly indicates the reasons for EU assessments provided below. A brief review of the findings related to perceptions of the EU in this regard is presented:

The number of final convictions in the fight against organised crime remains low compared to the estimated value of the criminal market of the region.

(Progress reports 2015, p.15, 2016, p.17 - identical wording) Serbia should in particular: a) establish a convincing track record of investigation, prosecution, and convictions in organised crime cases, including money laundering, based on proactive investigations, and establish an initial track record of freezing and confiscating criminal assets.

(Progress report 2018, p.31) The lack of secure storage of seized drugs and drug precursors prior to destruction remains an issue of concern. An appropriate process for the destruction of precursors has yet to be set up.

(Progress report 2018, p.40) Very few persons were convicted for third party laundering, despite the existence of organised criminality.

No stand-alone money laundering convictions have been achieved.

(MONEYVAL, 2016, p.7).

The data on track record in each of the inspected fields does not indicate satisfactory performance of the criminal justice system. The questions that arise in this regard refer to the reasons for such state of play. That is, if the EU perspective is a goal that Serbia strives to, why isn’t more effort invested into reaching these goals? It may be that the criminal justice system lacks capacity to finalise this type of cases or the system might be captured, hence preventing positive track record.

The recently published GRASP report (2019) indicates that capture risk of the Serbian criminal justice system is much lower than in other candidate countries. Nevertheless, the assessments of the GRASP report relied on broad indicators, such as adopted laws and total number of resolved cases before the courts (although recognising the lack of comparability of different statistics across institutions) and without clear methodological explanation of the values attributed to certain indicators. The GRASP report shows that regulatory framework for addressing corruption and capture risks through the criminal justice instrument is in place. However, the Capture Risk Index provided in the report suggests high capture risk, due to biased approach in detection, investigation, prosecution and sentencing of corruption.

156 Figure V. 2: Capture Risk Index developed in the GRASP Report

Source: GRASP Report - Governance Risks Assessment Project in Western Balkans

The low track record in cases of organised crime and corruption is a fact. However, a number of reasons may be attributed to such condition. There are some objective reasons for this perceived lack of efficiency of the criminal justice system in this particular field. One of those reasons is certainly lack of premises in the Special Court for Organised Crime, even though they work double shifts, which causes practical obstacles to maintain multiple trials simultaneously.

Concurrently, most interviewees referred to the lack of efficiency in the judiciary, lack of accountability, inadequate evidence provided by the law enforcement and a set of similar explanations, commonly offered by different groups of state officials. Illustrative examples are provided below.

Procedural laws enable a set of options to postpone hearings indefinitely, and the lawyers take advantage of this. (A judge, P2.1)

Sometimes they blame us, but the prosecution does not always have good evidence. (A judge, P2.20) We try to suggest as many plea agreements as possible. (A repression institution representative, P2.7) There is no space for other proceedings, we don’t have other court rooms... if they want more, they need to provide additional space and staff. (A judge, P2. 23)

157 The prosecution is over-burdened with tasks, and we don’t have sufficient staff. (A repression institution representative, P2.18)

Nevertheless, the extent of the lack of efficiency of the criminal justice system may also be attributed to state capture, as no sufficiently clear justifications are provided. Thus, what these data suggest is that a dimension of state capture lies in a certain drawing the energy out of state institutions that, while on paper are perhaps not ideal or fully ‘transformed’, nevertheless in practice appear to function with a level of inertia that cannot be explained by reasons of form alone. This is question of the dimensions of capture particularly important and is measured and discussed under research questions 3 and 4 further below.

5.2.3. Conclusions

It is important to note that on the basis of the literature review, it could be expected that stalled democratisation processes and prolonged European accession of a state would be marked by certain characteristics identified by most authors. To summarise the discussions in the Chapter III, it is a fact that economic transition in Serbia was significantly delayed when compared with other states in the region or other transition states. The reasons for this delay may be correctly associated with the conflicts in the region, international embargo, bombing and other particular features of the situation in Serbia in that period. However, despite these factors, a number of authors maintained that there are other dynamics that may influence the process of transition.

This research question strived for determining whether stalled transition and EU accession can be attributed to the level of organised crime. As demonstrated through this presentation of results, deeply rooted problems of organised crime, endurance of criminal networks and wide-spread corruption represent some of the key issues hindering finalisation of transition and the EU progress of Serbia.

The findings generated in this research show that democratic transition does take place in Serbia, but it is continuously obstructed by several key issues, such as organised crime, corruption, clientelism, and fragile institutions. As evidenced, the EU consecutively underlines these issues as key factors hampering progress. These findings are consistent with notions of some authors

158 who suggested that democratic transition is prolonged due to absence of a radical break with non-democratic heritage, corruption and crime (Stoiljkovic, 2012).

Even though the EU constantly refers to these problems, it appears that this approach has not led to improved outcomes in the field of crime control in Serbia. The importance of the identified problems lies primarily in the fact that these are measurable fields of state action i.e. they are not political assessments. A considerably long interval of the same recommendations which are not fully implemented signposts that there are significant obstacles in a state, hindering achievements in this field.

This may be due to an essential problem identified in Serbia, which is the implementation of the legal framework per se. That is, Serbian laws in this field have been assessed as adequate and overall aligned with the EU acquis. The question is therefore why implementation is lacking? To support the existence of this particular problem in Serbia, an excerpt from an arbitration case⁴⁰ against the Republic of Serbia is illustrative:

In the Respondent’s view, the Claimants’ expectations in regard to the Veterinary Act were based on general legislative statements which can only give rise to reduced expectations. The Claimants could only have a very limited expectation that the Veterinary Act would be implemented and complied with simply because it had been enacted as law. (ICSID Case No. ARB/14/27)

Hence the defence of the state rests upon a claim that the fact a law has been adopted doesn’t necessarily guarantee it would be implemented. Inconsistent implementation of laws can therefore be a possible explanation and one continually remarked upon in the external reviews.

However, the reasons for endurance of these problems may also be attributed to the quality of institutions (Greif, 2006; Tridico, 2011). Tridico (2011) ascribed different levels of performance among transition countries, inter alia, to the quality of institutions, implementation of policies and strategies and control of corruption. Besley, Dewatripont, and Guriev (2010) held that effective transition is not possible without subsequent institutional changes, given that

40 International centre for settlement of investment disputes ICSID Case No. ARB/14/27

159 institutions represent the core of social and economic interactions. They consider that transition may be prolonged in case of absence of changes of the formal and informal institutions.

In addition, the features contributing to stalled EU accession identified in this research may also be explained by reflecting on the consequences of the recent past in the Western Balkan region.

That is, as thoroughly discussed in Chapter II, organised criminal networks in Serbia (and the region) were established during the conflicts in the 90s. These criminal networks originating from the period of the break up of Yugoslavia developed strong mutual bonds through the illegal firearms, oil and cigarettes smuggling. It is also well known that Yugoslavian political elites and security forces throughout the region actively participated and operationally supported these trafficking channels (e.g. Hajdinjak, 2002). Such symbiosis between state actors and criminal networks appears to have persisted even nowadays. This is in line with Popovic (2010), who perceived the causes of Serbia's epochal failure to undergo democratic transition process in the main political actors as a continuance of the previous political order, the dominant cultural patterns, and a refusal to recognize the criminal inheritance from the nineties. As this research shows, it appears that this criminal inheritance is deeply rooted into the system.

As discussed in Chapter III, various models of cooperation of state actors and criminal networks continued after the peace has been established, through cross-border transactions based on bribery, suspicious privatization arrangements after the 2000, trading in influence, protection from law enforcement. It could therefore be reliably explained that such prosperous business relations between state actors and criminal networks have never in fact been interrupted, hence maintaining organised crime alive. The process of transition has therefore theoretically strengthened organised criminal networks by giving them an opportunity to invest in legal business. As a result, this symbiosis today significantly hampers any efforts of normalisation.

First implications of close collaboration between politicians and security forces with organized crime structures have been confirmed in Serbia in 2003 by the murder of the Prime Minister. The persons convicted for this murder were members of the main security forces and key criminal groups, who seemed to believe that they can act ‘against the state’.

160 Literature shows that symbiosis between state actors and organized crime during the process of creation of new states leads to permanent transformation of state interests into private ones and fosters the development of criminalised, corrupt and non-transparent societies (Ivanova, 2010;

Grozdanic and Martinovic, 2012).

Despite different ideas about the causes of long lasting transition, discussed in detail in Chapter III, it appears that a symbiosis between state actors and organised criminal networks, coupled with clientelism and grand systemic corruption leaves sufficient grey zones or loopholes (Cockayne and Roth, 2017) for operations of organised crime. Beyond solely delaying the finalisation of transition, such failure of efficient crime control postpones the accession of Serbia into the EU for an indefinite period.

In view of these conclusions, it is not surprising that there are views suggesting that the European strategy for the Western Balkans has been unsuccessful. In a text published in the «Südosteuropa Mitteilungen» (cited in Zougla, 2018) under the title "What is the cause of the EU's failure in the

In view of these conclusions, it is not surprising that there are views suggesting that the European strategy for the Western Balkans has been unsuccessful. In a text published in the «Südosteuropa Mitteilungen» (cited in Zougla, 2018) under the title "What is the cause of the EU's failure in the