Having published the full texts of the national reports on Bulgaria, Cyprus, the Czech Republic and Estonia adopted by the European Commission on 9 October (EUROPE/Documents No. 2286/2287), we here publish the full texts of the national reports for Hungary, Latvia and Lithuania. Reports on the other candidate countries will be published in the following issues of EUROPE/Documents.
* * * * * * * * * * *
HUNGARY
In its 1997 Opinion, the Commission concluded that Hungary fulfilled the political criteria. Since that time, the country has made considerable progress in further consolidating and deepening the stability of its institutions guaranteeing democracy, the rule of law, human rights and respect for the protection of minorities. This has been confirmed over the past year. Hungary continues to fulfil the Copenhagen olitical criteria.
Public administration reform at central level has been completed to a large extent. In this respect, the 2001 Law on Civil Servants, partly enforced in 2002, was an important step forward in the consolidation of the legal framework for civil servants. Following a complex review of the salary structure, the gap between arnings in the public and private sector was further reduced. A financial reform of the local self-governments is still outstanding.
Within the judiciary, the constitutional and legislative guarantees of judicial independence are well-established in Hungary and the system of judicial selfadministration functions efficiently. The decisions to introduce the Regional Courts of Appeal and to strengthen the judiciary's financial independence are important steps as regards the improvement of the judicial capacity.
In line with its anti-corruption strategy, the Hungarian Government has continued to adopt a series of legal and practical measures to fight corruption, which remains a cause for concern. It is important that the new decisions be implemented quickly to better address the situation.
Hungary continues to respect human rights and freedoms. In the area of public service media, political parties are again fully represented in the Supervisory Boards of Trustees. New steps were taken to improve social dialogue.
With a view to addressing the difficult situation of the Roma, the implementation of the 1997 medium-term programme continued. The institutional framework has been further strengthened and a new monitoring system introduced. Still, Roma policy is not well integrated into general social development strategies and exists as a separate and parallel project. Roma continue to suffer discrimination. The Government is currently revising its Roma policy. The envisaged adoption of a comprehensive long-term strategy and comprehensive anti-discrimination legislation would be major steps forward in this regard.
The 1997 Opinion already acknowledged the comprehensive reform efforts undertaken by the Hungarian authorities to transform their economy. Since the Opinion, and against a challenging international economic environment, economic performance has improved. Macroeconomic stability has been achieved, reforms have continued while the Hungarian authorities' commitment to the economic requirements of EU accession has been sustained.
Hence, it is concluded that Hungary is a functioning market economy. The continuation of its current reform path should enable Hungary to cope with competitive pressure and market forces in the Union.
Improvements can be made to macroeconomic management by reducing the general government deficit, thus preventing fiscal policy to become pro-cyclical and supporting a further reduction of the inflation rate. A more fundamental reform of the health care sector now needs to be embarked on. Wage developments will have to be brought in line again with productivity growth in order not to compromise the country's competitiveness.
Since the Opinion, Hungary has made continuous progress in aligning with the acquis in all areas. Implementation of the new legislation has been proceeding well in most sectors. Considerable efforts have been made by the country since 1997 to improve its administrative capacity needed for a satisfactory implementation of the acquis.
Over the past year, Hungary has further advanced in a number of areas, such as social policy, justice and home affairs, telecommunications, culture and audio-visual and energy with regard to the adoption and the enforcement of the acquis. Among the sectors in which only limited progress was made in the reporting year as regards administrative capacity figure agriculture and regional policy. However, administrative capacity was further improved in many other sectors, thereby increasing the level of preparations to effectively implement and enforce Community legislation.
Overall, Hungary has achieved a high degree of alignment with the acquis and is also well advanced with regard to achieving adequate administrative capacity to implement the acquis. However, further efforts remain to be made for Hungary to be fully capable of enforcing it by accession. Detailed plans have been agreed, in particular in the negotiations and in the Action Plan, to cover the remaining gaps.
Continued good progress could be noted in the internal market sector. As described in last year's report, the major part of the acquis has been adopted, and administrative structures are in place. Since transposition of the acquis is very advanced as regards the free movement of goods, attention is now focusing on enforcement, for example on the effective establishment of the Food Safety Agency as well as on market surveillance. The necessary infrastructure for standardisation and certification is in place. Progress could be noted with the adoption of legislation on procurement in the motorway construction sector. However, further efforts are needed to align with the acquis on public procurement in particular as far as its correct application is concerned. In the field of services, Hungary's legislation is largely aligned. On data protection, however, legal alignment has to be completed and the appropriate administrative structures strengthened. Following the adoption of legislation on the fight against money laundering, Hungary was removed from the OECD Financial Action Task Force list of non-co-operative countries in June 2002. Also in the sector of free movement of capital, new legislation on land was adopted. However, further adaptations are still required. Administrative capacity to ensure the due supervision of financial services is adequate. In the field of company law, Hungarian legislation is largely in line with the acquis. While Hungary has a relatively good enforcement record, border control measures need to be strengthened with respect to intellectual property rights and the fight against piracy and counterfeiting further intensified. In competition policy, further efforts are still necessary to align State aid schemes, in particular the fiscal aid schemes. Both anti-trust and State aid enforcement bodies continued to work satisfactorily.
In taxation, Hungary's legislation is to a large extent aligned with the acquis. However, transposition of the acquis, notably as regards VAT and excise duty, has to be completed. Efforts should be continued to ensure that the computerised tax information system is fully operational ahead of accession. In customs, legislation is largely aligned with the acquis. Further efforts were made as regards customs warehousing, temporary importation, valuation and non-commercial consignments. Hungary continued to strengthen the administrative and operational capacity of the Hungarian Customs and Finance Guard and undertook significant steps to revitalise the development of interconnectivity enabling systems. Efforts should be continued to ensure interconnectivity with EC computerised systems in the customs area.
With regard to industrial policy and small and medium-sized enterprises, the Széchenyi Plan will now concentrate on SME development and EC pre-accession projects and be integrated into the National Development Programme.
Good progress was again made in the area of environment, notably through the adoption of legislation in the air, water, industrial pollution control and genetically modified organisms sectors. However, the National Waste Management Plan still needs to be adopted. Administrative capacity in this sector was improved, inter alia, by changes in ministerial responsibilities, but due attention should be given to this issue in the future. In addition, environmental investments need to be further increased.
As to agriculture, Hungary has a steady basis upon which to implement the acquis. However, the preparation of key management instruments such as the paying agency and the Integrated Administration and Control System (IACS) has been delayed, and a number of decisions on the distribution of responsibilities are awaited. As regards IACS, serious efforts are needed to ensure that a fully functioning system will be soon in place. Delays have also occurred in making the SAPARD Agency operational. Steady progress could be noted in the veterinary and phytosanitary fields, but the upgrading of Border Inspection Posts and of establishments needs appropriate attention. Ongoing efforts need to be substantially stepped up. Legal alignment proceeded in the area of transport, in particular in the road and rail sectors. Although some additional steps have been taken, the restructuring of the rail sector should be completed to fully implement the market access acquis. In addition, institution-building efforts have to be further enhanced in this sector.
Considerable progress was made in the energy sector with the adoption of the electricity law, which paved the way for the liberalisation of the Hungarian market. However, no similar progress was made in the gas sector. Administrative capacity is at an advanced level. Good progress could be noted in the audio-visual sector through the adoption of the media law, but further efforts are needed to achieve full alignment.
Considerable progress was made in the area of social policy and employment, notably with the adoption of further implementing legislation to the Labour Law. As to social dialogue, the new Government introduced confidence-building measures and decided to set up a National Interest-Reconciliation Council to enhance real dialogue. The capacity to implement the acquis on occupational safety and health, including the strengthening of labour inspectorates, has been increased, but needs further attention.
In relation to regional policy, it was decided in June 2002 to establish a more efficient institutional framework for programming and implementation of structural and cohesion funds. However, the capacity of the managing and paying authorities has to be strengthened. Further progress is also needed as regards the technical preparation of projects eligible for Community funding. While progress was made in establishing financial management and control systems, the programming process suffered from delays in the reporting period. Hungary's preparations for the structural instruments have to be substantially stepped up.
Considerable progress was made in the telecommunications sector, where the Hungarian market was opened for competition with the adoption of the communications law. Efforts need to focus on ensuring affordable universal service.
In the area of Justice and Home Affairs, significant progress was achieved through further alignment with the acquis in the fields of visa policy, migration and asylum. The fight against fraud, corruption, money laundering and organised crime was made more efficient through the adoption of additional legislation and reinforced institutional structures. A revised Schengen Action Plan addresses the main issues of the acquis.
In the area of common foreign and security policy, Hungary still needs to find an agreement with Slovakia and Romania on the implementation of the Law on Hungarian minorities living in neighbouring countries. Also, the law needs to be aligned with the acquis upon accession.
As to financial control, enhanced efforts are needed in the sector Public Internal Financial Control, both in terms of legal alignment and administrative capacity. In order to tackle the weaknesses identified, Hungary is in the process of redefining its internal audit functions and structures according to international practice and to redraft the respective legislation. Efforts need, however, to be considerably stepped up.
Hungary has continued to make progress in building up its administrative capacity to apply the acquis in most areas. However, further efforts will have to be made in particular in areas such as agriculture, transport, regional policy, environment and financial control. Further action is also still required in establishing the necessary administrative capacity to ensure the sound, efficient and controllable management of EC funds.
In the accession negotiations, 26 chapters have been provisionally closed. Hungary is generally meeting the commitments it has made in the negotiations. However, delays have occurred with regard to the transposition of parts of the veterinary acquis, legislation on the size control of imported fish, the adoption of the gas law and several pieces of environmental legislation (national climate change strategy, National Waste Management Plan, regional and local waste management plans, packaging and packaging waste and waste oils). These issues need to be addressed.
Bearing in mind the progress achieved since the Opinion, the level of alignment and administrative capacity that Hungary 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 Hungary will be able to assume the obligations of membership in accordance with the envisaged time frame. In the period leading up to accession, Hungary needs to continue its preparations in line with the commitments it has made in the accession negotiations.
LATVIA
In its 1997 Opinion, the Commission concluded that Latvia fulfilled the political criteria. Since that time, the country has made considerable progress in further consolidating and deepening the stability of its institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities. This has been confirmed over the past year. Latvia continues to fulfil the Copenhagen political criteria.
Regarding public administration reform, Latvia has continued to address the remaining reform issues and the legislative and administrative framework will be fairly comprehensive once the Civil Service Law and Public Administration Law are fully implemented. It is now important to speed up the introduction of the uniform civil service pay system and to ensure sufficient funding.
Overall, while most of the deficiencies of the judicial system have been identified, only part of them have been addressed. Efforts in this field need to be multiplied in order to ensure a thorough systemic reform, based on political support for modernising the judiciary and sufficient funding. The legislative framework still remains to be completed and the increasing backlog of court cases should be reduced. The issue of pre-trial detention requires continued attention. Further significant efforts to strengthen the de facto independence, efficiency and quality of the judiciary are needed. The upgrading of the infrastructure of courts needs to be completed.
Latvia has made further progress in the fight against corruption, which remains a cause for serious concern. The legislative framework has been improved, the institutional set-up has been strengthened and public awareness as well as the involvement of civil society are rising. However, further efforts are needed in order to complete the institutional setup and to provide the new Anti-Corruption Bureau with the necessary means in order to achieve concrete results.
Latvia continues to respect human rights and freedoms.
Latvia has encouraged the further integration of non-citizens into Latvian society by removing language requirements in the election law, and increasing support to facilitate the naturalisation process, and through the activities of the Society Integration Foundation. The integration process needs however to be accelerated and sufficient funding made available to encourage naturalisation and language training in particular. Latvia should ensure that at all levels the implementation of the language law respects the principles of justified public interest and proportionality, Latvia's international obligations and the Europe Agreement.
The 1997 Opinion already acknowledged the reform efforts undertaken by the Latvian authorities to transform their economy. Since the Opinion, and against a challenging international economic environment, in particular the Russian crisis, economic performance has improved. Macroeconomic stability has been achieved, reforms have accelerated while the Latvian authorities' commitment to the economic requirements of EU accession has been sustained.
Hence, it is concluded that Latvia is a functioning market economy. The continuation of its current reform path should enable Latvia to cope with competitive pressure and market forces within the Union.
Improvements can be made to the functioning of the labour markets, in particular by active labour market measures in favour of disadvantaged groups, reinforcing public and private infrastructure necessary for the mobility of the workforce and further reforms to the educational system. Fiscal policy has to maintain a prudent approach, also in view of the high current account deficit. In addition, improving the general business environment and strengthening the administrative and judicial capacity would support a more broadbased private sector development.
Since the Opinion, Latvia has made steady progress in aligning its legislation with the acquis, in particular during the last 2 years. As a consequence the majority of the primary legislation has been put in place. At the same time, considerable efforts have been made to strengthen its administrative capacity, albeit not to the same extent as legislative alignment.
Over the past year, Latvia has further advanced in completing alignment and creating or restructuring related specialised bodies in the vast majority of areas. It has as well intensified training in most areas with a view to complying with the requirements of the acquis.
Overall, Latvia has achieved a high degree of alignment with the acquis in many areas, and is well advanced towards reaching adequate administrative capacity to implement the acquis in most fields. Further efforts remain to be made, in particular regarding its administrative capacity in most fields, as well as completion of legislation in a number of sectors. Detailed plans have been agreed, in particular in the negotiations and in the Action Plan, to cover the remaining gaps.
The preparation for participation in the internal market is well advanced and Latvia has achieved a good level of alignment in this area. As regards free movement of goods, the legal and institutional framework is generally in place. There has been sustained development of the standardisation system, which needs however to be reinforced. The reform of the market surveillance system and its infrastructure, including on food safety and in the field of public procurement, requires further strengthening. The process of bringing Latvia's legislation and structures in relation to the free movement of persons into line with the acquis has developed satisfactorily, although further efforts are required, especially on mutual recognition of professional qualifications as well as on strengthening institutional capacity. In the area of freedom to provide services, legislative alignment has advanced, notably regarding financial services and banking, but further work remains necessary regarding insurance and securities. In the area of capital movements, legislative alignment is well advanced, but the process needs to be completed as regards capital movements and payments. The administrative capacity has been put in place in this field, though further reinforcement remains necessary. On company law, an important development was the recent entry into force of the Commercial Code, which now needs to be implemented. While Latvia's legislation is well advanced in the field of intellectual and industrial property rights, effective action to fight against piracy and counterfeiting remains a challenge. In the area of competition, Latvia's legislative alignment, administrative capacity and enforcement record is reasonably advanced, but efforts should continue to develop a track record on effective implementation of competition legislation.
As regards customs, legislation is largely aligned, but organisational restructuring and implementation needs to continue, as it does for taxation, where legislation needs to be completed on direct and indirect taxation. Latvia should step up its ongoing legislative work, and urgently speed up its preparations for electronic interconnectivity. For both areas, Latvia has committed itself to introducing adequate information technology systems so as to allow the exchange of electronic data with the Community and its member states. Significant further work is required as a priority for these systems to be operational by the date of accession.
Latvia has made further progress in the field of agriculture as well as more recently through upgrading of administrative structures with a view to the implementation of the Common Agricultural Policy. The establishment of the Food and Veterinary Service as the joint body responsible for controls of the entire food chain and the accreditation of the SAPARD agency constitute a significant achievement. However, important challenges lie ahead to complete alignment, and to reinforce the institutional capacity to implement the Common Agricultural Policy and its implementing measures, including the paying agency, the Integrated Administration and Control System (IACS) and the Common Market Organisations (CMO). Particular efforts remain necessary in the field of veterinary and food safety controls as well as on upgrading of food establishments to Community Standards. As regards fisheries, Latvia's legislation has been aligned to a reasonable extent, although there are gaps, notably as regards structural actions and market policy. The administrative structures have been partially established. Latvia's efforts now need to focus on further reinforcing administrative capacity and ensuring sufficient funding.
While Latvia's legislation is to a great extent in line with the acquis in the field of transport, the relevant framework laws (with the exception of maritime transport) are in place and the administrative capacity is being strengthened. Further efforts are necessary to complete the alignment process notably in the rail and maritime sectors as well as regarding administrative capacity in road, rail and air transport. The recent increase in capacity regarding maritime safety and Flag State performance needs to be further enhanced.
A significant step forward was the adoption of the new Labour Code in the field of social policy and employment. Legislative alignment in this field is well advanced, but needs to be completed. Effective implementation and enforcement regarding labour law, health and safety and public health remains important. In the field of energy, a reasonable level of alignment of legislative and institutional capacity has been achieved, but this process needs to be completed, in particular regarding the internal energy market (electricity and gas), oil stocks, increased energy efficiency and reinforcement of the administrative
capacity of the various bodies. Latvia has achieved considerable progress in aligning with the environmental acquis. This process needs to be completed and the administrative capacity needs further strengthening, especially regarding inspections, co-operation and coordination at all levels. Investments should be enhanced.
With the adoption of the Law on Telecommunication and the establishment of the Public Utility Commission as regulator, the legislation is largely aligned and the institutions are in place. However, particular efforts are necessary with a view to a further liberalisation of the telecommunications market, the strengthening of the independence and effectiveness of the regulator and legislative alignment in the field of postal services. Particular progress was made recently in terms of institutional strengthening in the field of culture and audio-visual policy, where Latvia's legislation is largely in line with the acquis.
In the field of justice and home affairs, significant progress has been made in terms of legal alignment as well as continued strengthening its institutional capacity. Latvia's efforts need now to focus on completion of legislative alignment, especially on migration, money laundering, and protection of the financial interests of the European Communities and judicial co-operation and implementation of the high quality Schengen Action Plan. Further reinforcing of the law enforcement bodies is needed, with particular attention to be paid to the fight against drugs and trafficking in general, smuggling, fraud, corruption and organised crime, including through improved cooperation between the various bodies involved. Strengthening of integrated border controls and completion or upgrading of structures also remains an important priority.
As for regional policy and the co-ordination of structural instruments, progress was made recently in preparing for the implementation of structural policies and designation of the main institutions involved. However, efforts will need to focus on building up adequate and efficient administrative capacity for the management of the Structural Funds and Cohesion Fund at all levels. Moreover, preparation of an up-to-standard draft Single Programming Document should be speeded up and inter-ministerial co-ordination and partnership needs to be ensured. Generally, all systems and procedures for effective monitoring, financial management and control should be reinforced and the legal framework has to be completed. There is a particular need for progress as regards the technical preparation of projects eligible for Community funding. Latvia has started to take measures to address the weaknesses identified, including through the allocation of human resources. Ongoing efforts need to be continued and substantially stepped up. The establishment of the Public Internal Financial Control system is relatively advanced, but needs to be completed, including legislative alignment.
Preparing its administrative capacity for membership remains one of the greatest challenges Latvia faces. With a view to the responsibilities Latvia will have to assume in managing and enforcing the acquis upon accession, a substantial portion of the necessary institutions have been restructured or created. While this process is well advanced, further substantial efforts are required to ensure that these institutions become fully operational. This is particularly important in areas such as internal market, agriculture, fisheries, transport, regional policy, environment, justice and home affairs and with regard to the implementation of information technology systems for taxation and customs. Finally, continued efforts are necessary to enhance Latvia's capacity to ensure sound, efficient and controllable management of EC funds.
In the accession negotiations, 27 chapters have been provisionally closed. Latvia is generally meeting the commitments it has made in the negotiations.
Bearing in mind the progress achieved since the Opinion, and in particular over the recent past, the level of alignment and administrative capacity that Latvia has achieved at this point in time, and its track record in implementing the commitments it has made in negotiations, the Commission considers that Latvia will be able to assume the obligations of membership in accordance with the envisaged timeframe. In the period leading up to accession, Latvia needs to continue its preparations, in line with the commitments it has made in the accession negotiations.
LITHUANIA
In its 1997 Opinion, the Commission concluded that Lithuania fulfilled the political criteria. Since that time, the country has made considerable progress in further consolidating and deepening the stability of its institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities. This has been confirmed over the past year. Lithuania continues to fulfil the political criteria.
Lithuania has made considerable progress in pursuing public administration reform, notably through the adoption of the new Civil Service Law and the related implementing legislation. Lithuania needs to ensure that the reform is duly implemented in all services and that adequate financing is secured as a matter of priority.
Substantial progress has been made in reforming the judicial system, in particular, notably through the adoption of the Law on Courts. Due attention should be given to ensuring proper implementation of the new legislation. Further efforts are needed to improve the professional capacity of judges and prosecutors. This is fundamental to guaranteeing the quality of legal proceedings and respect for procedural rights and professional ethics. Further progress is required also in accelerating court proceedings and ensuring the enforcement of judgements.
Considerable progress has been made as regards the fight against corruption, mainly with the adoption of the National Anti-Corruption Programme and the Law on Corruption Prevention. Sustained efforts should be made by law enforcement bodies and line ministries to ensure the proper and effective implementation of measures against administrative corruption, which remains a cause for concern.
Lithuania continues to respect human rights and freedoms.
The 1997 Opinion already acknowledged the reform efforts undertaken by the Lithuanian authorities to transform their economy. Since the Opinion, and against a challenging international economic environment, in particular the Russian crisis, economic performance has improved. Macroeconomic stability has been achieved, reforms have accelerated while the Lithuanian authorities' commitment to the economic requirements of EU accession has been sustained.
Hence, it is concluded that Lithuania is a functioning market economy. The continuation of its current reform path should enable Lithuania to cope with competitive pressure and market forces within the Union.
Improvements can be made to the labour market by addressing the high unemployment. The management of public finances should be improved, in particular by addressing, at municipal level, the accumulation of expenditure arrears. Furthermore, the completion of the pension reform, by the planned introduction of a funded compulsory pension scheme, should make public finances more sustainable in the long term and support the development of financial markets. In addition, strengthening the administrative and judicial capacity, and simplifying procedures, in areas relevant for the business sector, including in bankruptcy and enterprise restructuring, would enhance market entry and exit of companies.
Since the Opinion, Lithuania has made significant progress in terms of both transposition of the acquis and administrative capacity. While the initial efforts were unsystematic, in recent years the pace and scope of transposition has considerably improved and increasing efforts have been devoted to the challenging task of building up the necessary administrative capacity.
Over the past year, Lithuania has further advanced in its accession preparations, in particular in the areas of free movement of goods, free movement of persons, competition, energy, regional policy and justice and home affairs. Limited progress has been made in the areas of financial control and fisheries. Although progress was made in the areas of agriculture and environment, continuous efforts are still needed.
Overall, Lithuania has achieved a good degree of alignment with the acquis across most fields, and in some areas the level of alignment is now high. Lithuania has set up most of the administrative structures which are necessary to implement the acquis; however, further sustained efforts to reinforce the administrative capacity are required, notably as regards training and retaining qualified staff and ensuring effective inter-agency coordination. Detailed plans have been agreed, in particular in the negotiations and in the Action Plan, to cover the remaining gaps.
Lithuania has continued to make progress in the area of the internal market. In the field of free movement of goods the legislation is aligned to a large extent. The main administrative structures are in place but these are not yet fully operational. As regards market surveillance, efforts are needed to further develop the infrastructure, notably in the areas of testing and certification. In the field of food safety, progress has been made in terms of alignment and administrative capacity, but further efforts are required as regards the abolition of pre-market authorisation of foodstuffs. Legislation on public procurement has been further aligned but still needs some fine-tuning, and the public procurement office needs to be further strengthened. As regards free movement of persons, Lithuania has reached a good level of alignment, while the administrative structures in place are not yet operating satisfactorily. In the area of mutual recognition of qualifications, major efforts remain to be made in the area of medical professions. In the area of freedom to provide services, legislation is aligned to a reasonable extent, but administrative structures do not yet operate in a fully satisfactory manner. Good progress has been made in the fields of banking and securities. Legislation concerning the insurance sector and data protection should be further aligned, notably to guarantee the independence of the supervisory bodies. Co-operation between supervisory institutions should be strengthened. Further progress has taken place in the area of free movement of capital, where Lithuania had already achieved a high degree of liberalisation. Further sustained efforts are needed as regards payment systems and the fight against money laundering. As regards company law, Lithuania has reached a reasonable level of alignment and administrative structures are in place but not yet fully operational. Further alignment has been achieved concerning patent and intellectual property rights. The fight against piracy and counterfeiting needs to be significantly intensified, as does co-operation between the authorities involved in the enforcement of intellectual property rights. In the area of competition policy legislation is aligned to a broad extent and administrative structures are in place and are operational. Lithuania should continue to develop a track record of proper application and enforcement of its legislation. The Competition Council should focus on a more deterrent sanctions policy in the field of anti-trust and pay close attention to rescue and restructuring aid.
As regards taxation, Lithuania has reached a good level of alignment and administrative capacities are largely in place but need further strengthening. Lithuania has made significant progress in aligning its tax legislation although further alignment is required in the areas of VAT and excise duties. The tax administration reform has also made some progress. In the area of customs union, Lithuania has achieved a good degree of alignment and administrative capacities are partially in place. However, further efforts remain to be made in strengthening inter-agency co-operation and in enforcing existing provisions on fraud, intellectual property rights and anti-corruption. For both areas, particular efforts are necessary to ensure adequate information technology systems so as to allow the exchange of data with the EC and its Member States.
As regards agriculture, transposition of legislation is proceeding well. Administrative structures are partly in place but further improvements are needed. Lithuania should focus on border inspection posts, the Integrated Administration and Control System, administrative capacity to manage the Common Agriculture Policy, paying agency, upgrading of establishments, and animal waste treatment.
As regards fisheries, legislation has been aligned to a reasonable extent, although there are gaps, notably as regards market and structural policy. The administrative structures have been partially established. Further efforts are needed to develop market and structural policy and reinforce the control and inspection functions. The establishment of the fishing vessel register needs to be finalised.
Legislation in the transport sector is now to a great extent in line with the acquis, although further efforts are needed as regards rail transport. The relevant framework laws are in place and only a limited amount of implementing legislation remains to be implemented. Administrative structures are largely in place, but need further strengthening. In the energy sector, Lithuania has achieved a high level of legislative alignment, while administrative structures are largely in place but need further strengthening. Progress regarding the internal energy market has been good. As regards nuclear safety, Lithuania took the very important step of formally confirming that Unit 1 of the Ignalina NPP will be closed before 2005 and formally committing to close Unit 2 of this plant by 2009. The EU expressed its readiness, on the basis of Community solidarity, to continue to provide adequate additional Community assistance to the decommissioning effort after Lithuania's accession. Lithuania's efforts now need to focus on ensuring full and timely implementation of legislation; on nuclear safety, including the timely installation of a diverse second shutdown system at Unit 2 of the Ignalina NPP, and the preparation of the closure and decommissioning of this NPP; and on strengthening the administrative capacity, in particular the energy regulator and the nuclear safety authority.
In the field of social policy, legislation has been transposed to a large extent and administrative structures are largely in place but need further strengthening. Progress has taken place with the adoption of the Labour Code and of the new provisions on collective agreements. Lithuania needs to complete transposition and effectively implement the acquis in the areas of public health and health and safety at work, including through the strengthening of relevant institutions; develop social dialogue and social protection; and further strengthen the administrative structures to manage support from the European Social Fund. In the field of environment, transposition has reached a relatively good level, but implementation is not yet fully satisfactory. Lithuania needs to focus on finalising the transposition and strengthening the overall administrative capacity. Close attention is required to implementation of the acquis with regard to waste management, water quality, industrial pollution control, chemicals and GMOs and nature protection.
In the area of telecommunications, Lithuania has reached a good level of alignment but implementing legislation remains to be transposed. Administrative capacities are in place but not yet fully operational. The independence of the Communication Regulatory Authority has been substantially strengthened. Further efforts remain to be made on completing legislative alignment and preparing for full liberalisation and strengthening the administrative capacity of the regulator.
In the field of justice and home affairs, Lithuania has achieved significant legislative alignment. Administrative structures are mainly in place, although further efforts are still necessary. Lithuania has updated and has continued to implement the Schengen Action Plan. Lithuania needs to focus on finalising alignment (notably on visas, Schengen, asylum, money laundering and protection of the financial interests of the European Communities) and on further reinforcing the law enforcement agencies, in particular as regards data protection, the protection of the external border and the fight against corruption.
In the field of regional policy and co-ordination of structural instruments, the institutional framework is largely in place, but the administrative capacity and the technical preparation of projects have not yet reached the level required. Administrative capacity has been strengthened, inter-ministerial co-ordination improved and good progress has been made as regards programming and partnership. Lithuania should focus efforts on completing the programming documents, defining the final implementation structures and further reinforcing the administrative capacity, in particular as regards technical preparation of projects eligible for Community funding, monitoring, financial management and control.
In the area of financial control, while the acquis has been transposed, further efforts are required to consolidate the fragmented legal provisions relating to public internal financial control into a single comprehensive law. The administrative structures are partially in place but not yet fully operational. They need to be strengthened considerably, in order to implement effectively the consolidated legislation. Ongoing work on the audit manuals should be finalised. Full implementation of the measures foreseen in the Action Plan with regard to the implementation of a methodology for financial management and control, for internal audit throughout the Government, and for training of human resources would go a long way to ensure that the current gaps in administrative capacity and implementation of the acquis are filled. In the area of financial and budgetary provisions, the legal framework is largely in place but the administrative capacity needs further improvement, in particular as regards the calculation, control and provision of own resources by accession.
As regards administrative capacity, Lithuania has achieved a sufficient, though still rather fragile, capacity to ensure effective implementation and enforcement of the acquis, notably in the area of internal market and the various Community policies. Lithuania needs to ensure the administrative structures are fully operational, in particular with a view to guaranteeing the uniform and predictable implementation of the acquis. Particularly close attention is required regarding the structures which are necessary to implement that part of the acquis which will be applicable only upon accession, in particular as regards sound and efficient management of EC funds.
In the accession negotiations, 28 chapters have been provisionally closed with Lithuania. Lithuania is generally meeting the commitments it has made in the negotiations. However, delays have occurred with regard to fisheries (completion of the fishing vessels register), statistics (conduct of the agricultural census) and environment (legislation on packaging and on biocides). These issues need to be addressed.
Bearing in mind the progress achieved since the Opinion, the level of alignment and administrative capacity which Lithuania has achieved at this stage, and Lithuania's track record in implementing the commitments it has taken in the negotiations, the Commission considers that Lithuania will be able to assume the obligations of membership in accordance with the envisaged timeframe. In the period leading up to accession, Lithuania needs to continue its preparations, in line with the commitments it has made in the accession negotiations.