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Croatia - Internal market

Candidate countries conduct negotiations with the European Union (EU) in order to prepare themselves for accession. The accession negotiations cover the adoption and implementation of European legislation (acquis) and, more specifically, the priorities identified jointly by the Commission and the candidate countries in the analytical assessment (or ‘screening’) of the EU’s political and legislative acquis. Each year, the Commission reviews the progress made by candidates and evaluates the efforts required before their accession. This monitoring is the subject of annual reports presented to the Council and the European Parliament.

ACT

Commission Report [COM(2010) 660 final – SEC(2010) 1326 - Not published in the Official Journal].

SUMMARY

The 2010 Report presents the improvements made in terms of the free movement of goods, workers, services and capital. These improvements have particularly taken place in coordinating social security systems, the recognition of vocational qualifications, postal services and the protection of intellectual property. Effort is required with regard to product safety, security of payment systems and combating money laundering. Progress has also been made in the development of the Customs Union.

EUROPEAN UNION ACQUIS (according to the Commission’s words)

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 complemented by a harmonised regulatory framework, following the "old approach" (imposing precise product specifications) or the "new approach" (imposing general product requirements). The harmonised European product legislation, which has to be transposed, represents the largest part of the acquis under this chapter. In addition, sufficient administrative capacity to notify the restrictions to trade and to apply horizontal and procedural measures in areas such as standardisation, certification, accreditation, metrology and market surveillance is essential.

The acquis in respect of the free movement of workers states that citizens of an EU Member State have the right to work in another Member State. EU migrant workers must be treated in the same manner as national workers with regard to working conditions, social benefits and tax allowances. The acquis also provides a mechanism for coordinating national social security provisions for those tax contributors and their families who move to another Member State.

Member States are required to remove all restrictions with regard to the free movement of services. 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). Financial institutions may carry out their activities throughout the European Union according to the principle of ‘home country control’ by opening branches or by providing cross-border services. The acquis also provides harmonised rules for some specific professions (craftsmen, traders, farmers, commercial agents), for certain information society services, and matters relating to personal data protection.

Member States must remove all restrictions on the free movement of capital between themselves, within the European Union, but also with third countries (with some exceptions) and adopt EU rules applicable to cross-border payments and to credit transfers concerning transferable securities. The money laundering and financing of terrorism directives require banks and other economic operators to identify their clients and be aware of certain operations, particularly in the case of cash transactions for high-value items. In order to tackle financial crime, it is essential that administrative and enforcement capacities are put in place, particularly by establishing cooperation between those authorities responsible for surveillance, implementing law and carrying out criminal proceedings.

The acquis on public procurement covers the general principles of transparency, equal treatment, free competition and non-discrimination. In addition, specific Community rules apply to the coordination and granting of public works, supplies and services contracts for traditional contracting entities and specific sectors. The acquis also defines the rules relating to the court procedures and means of action available. Its implementation requires specialised bodies.

The acquis relating to intellectual property rights defines the harmonised rules for the legal protection of copyright and related rights. Specific provisions are applicable to the protection of databases, data processing programmes, topographies of semi-conductors, satellite broadcasting and cable retransmission. In the field of intellectual property rights, the acquis details harmonised rules for the legal protection of trademarks and designs. Other specific provisions apply to biotechnological inventions and to pharmaceutical and phytopharmaceutical products. The acquis also establishes a Community trademark system and a Community design system.

The acquis on company law includes rules applicable to the constitution, registration, merger and division of companies. In the field of financial information, the acquis specifies the rules to be complied with regarding the presentation of consolidated annual accounts and provides simplified rules for small and medium-sized enterprises, in particular. The application of international accounting standards is obligatory for certain entities of public interest. Furthermore, the acquis also includes provisions relating to the approval, professional integrity and independence of persons responsible for legal controls.

The Customs union acquis consists almost exclusively of legislation which is directly binding on the Member States. It includes the Community's Customs Code and its implementing provisions; the Combined Nomenclature, Common Customs Tariff and provisions on tariff classification, customs duty relief, duty suspensions and certain tariff quotas; and other provisions such as those on customs control of counterfeit and pirated goods, drugs precursors and the export of cultural goods and on mutual administrative assistance in customs matters and transit. Member States must also have the required implementing capacities, particularly connectivity with the EU’s computerised customs systems. Customs authorities must also have sufficient capacity for implementation and compliance with the specific provisions established in related fields of the acquis, such as foreign trade.

 EVALUATION (according to the Commission’s words)

Good progress has been made in the field of free movement of goods and alignment with the acquis in this chapter is well advanced. However, further efforts are necessary, particularly on conformity assessment, metrology and market surveillance. Croatia needs to complete alignment with the acquis and to strengthen implementation capacity.

Good progress can be reported in the area of free movement of workers, and a satisfactory level of legal alignment has been achieved. Additional efforts are needed to strengthen, in particular, the coordination of social security systems.

Progress has been made in the field of right of establishment and freedom to provide services, in particular on mutual recognition of professional qualifications and on postal services. Overall alignment with the acquis is satisfactory. Increased efforts are required to complete alignment, in particular in the area of mutual recognition of professional qualifications and to transpose the Services Directive. Work on improving administrative capacity needs to be continued.

Further progress has been made in aligning with the acquis in the field of free movement of capital. Continued efforts are needed to complete liberalisation of capital movements and to consolidate the enforcement of anti-money laundering legislation.

Good progress has been made with regard to customs union. Croatia's customs legislation is aligned with the acquis to a very large extent. Croatia has continued to make progress in the area of IT, notably in interconnectivity. Further progress towards removing the last discrepancies in Croatia's legislation, implementing the Anti-Corruption Strategy and preparing for IT interconnectivity is required.

RELATED ACTS

Commission Report [COM(2009) 533 final – SEC(2009) 1333 final – Not published in the Official Journal].

Commission Report [COM(2008) 674 final – SEC(2008) 2694 final – Not published in the Official Journal].
The 2008 report highlighted the progress made in the free movement of goods and capital. Freedom of movement for workers was however not yet in line with the Union rules on access to the labour market, whilst obstacles still hampered the right of establishment and freedom to provide services.

Commission Report [COM(2007) 663 final - SEC(2007) 1431 - Not published in the Official Journal].
In its 2007 report, the Commission noted some progress with regard to the free movement of goods, workers, capital and services, and the right of establishment. It advised that efforts to align legislation with the acquis should be continued.

Commission Report [COM(2006) 649 final - Not published in the Official Journal].
The 2006 report stated that limited progress had been made with regard to customs union, public procurement, right of establishment, financial services, intellectual property and the free movement of capital. Croatia would need to invest a lot more effort into aligning its legislation with the Community acquis on the free movement of goods, workers, services and capital.

Commission Report [COM(2005) 561 final – SEC(2005) 1424 – Not published in the Official Journal].
The 2005 report pointed out that, in spite of the efforts made in 2004, there were still several barriers to the free movement of goods in Croatia. There had been very limited progress as regards the free movement of workers, services and capital.

Commission Opinion [COM(2004) 257 final – Not published in the Official Journal].
In its 2004 report, the Commission pointed out that the key elements of the Community acquis covering the free movement of goods were not yet in place. Considerable delays had been noted with respect to the free movement of workers. The Commission considered additional efforts to be urgently required in the area of the free movement of services and capital.

Last updated: 02.12.2010

See also

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