REGULATORY IMPACT ASSESSMENT AND ALIGNMENT OF THE LEGISLATION IN THE REPUBLIC OF CROATIA

1. REGULATORY IMPACT ASSESSMENT AND ALIGNMENT OF THE LEGISLATION IN THE REPUBLIC OF CROATIA Tamara Obradović Mazal, LL.M. Assistant Minister for Foreign Affairs and European Integration and Secretary of the Negotiating Team E-mail: tamara.obradovic@mvei.hr

2. Legislative procedure in the Republic of Croatia Analysis of the impact of regulations Alignment of the Croatian legislation with the acquis communautaire Instruments of alignment National Programme for the Integration of the Republic of Croatia into the EU Assessment of financial impact in the preparation of negotiating positions HITROREZ OVERVIEW OF THE PRESENTATION

3. Initiative All natural and legal persons may take the initiative to launch a lawenactment procedure. The initiative is forwarded to the person / body authorised to launch the procedure. Proposals Members of the Croatian Parliament, Clubs of Members Working bodies of the Croatian Parliament, and Government of the Republic of Croatia. LEGISLATIVE PROCEDURE IN CROATIA

4. Drafting the proposal of an act If an act is proposed by the Government of the Republic of Croatia, its draft proposal is prepared by the competent ministries The Draft is forwarded for opinion (Standing Orders of the Croatian Government) to: Legislation Office, Ministry of Finance, Ministry of Foreign Affairs and European Integration, and Other bodies of state administration competent for the issues regulated by the proposal concerned. The proposal is discussed by expert working groups of the coordinating committees of the Government of the Republic of Croatia and by the competent coordinating committee of the Government of the Republic of Croatia. LEGISLATIVE PROCEDURE IN CROATIA

5. Passing an act The Act is generally adopted in the regular procedure through two readings Before discussion at a session of the Parliament, the working bodies must hold a discussion on the proposals of the act The working bodies of the Croatian Parliament are its committees and commissions, established pursuant to the Standing Orders of the Croatian Parliament. LEGISLATIVE PROCEDURE IN CROATIA

6. First reading of the act The first reading includes: an introductory presentation by the sponsor and a discussion, which is followed by the adoption of conclusions concerning the submitted proposals, which are then forwarded to the sponsor. The sponsor must submit the final proposal of the act to the Croatian Parliament within 6 months of the date of acceptance of the proposal of the act in the first reading Second reading of the act The second reading of the act is the second part of the law enactment procedure. It includes a discussion: about the text of the final proposal, the standpoints of the working bodies, amendments to the text of the act, and the adoption of the act. Third reading of the act Exceptionally, in the enactment procedure, the act may be sent for a third reading (when a large number of amendments to the final proposal of the act is submitted or when the amendments are such in nature that they materially change the content of the final proposal of the act). LEGISLATIVE PROCEDURE IN CROATIA

7. Passing the act in summary procedure Exceptionally, an act may be adopted in the summary procedure, but only if that is required by the interests of national defence and other particularly justified state reasons, that is, when that is necessary to prevent or remedy major disturbances in the economy. The final proposal of the act must be submitted with the petition to enact the law under summary procedures, and it must include everything that the proposal of the act includes, except that instead of the text of the proposal of the act, the text of the final proposal of the act is enclosed. Acts that must be aligned with the legislation of the European Union, if requested by the sponsor, are adopted in the summary procedure (Article 161 of the Standing Orders). LEGISLATIVE PROCEDURE IN CROATIA

8. Passing an act when the sponsor is not the Government of the Republic of Croatia The procedure of passing the act is the same, except that the president of the Croatian Parliament forwards the proposal simultaneously to the working bodies of the Croatian Parliament and the Prime Minister to get their opinion The proposal goes through a similar procedure, that is, the competent ministry, the expert working group of the competent coordinating committee, the coordinating committee of the Government of the Republic of Croatia, the Government of the Republic of Croatia, all issue their opinions about the proposal. LEGISLATIVE PROCEDURE IN CROATIA

9. Content of the proposal of an act (Article 132, Standing Orders of the Croatian Parliament) Constitutional grounds for passing the act, Assessment of the status* and fundamental issues* to be regulated by the act and the impact* of the passed act, An assessment and the sources of funds necessary* to implement the act, The text of the proposal of the act, with its interpretationand explanation, The text of the provisions of the valid act to be amended, if that is what is proposed. In addition to the proposal of the act, the sponsor may also submit other relevant documentation, particularly expert opinions, ratified international treaties and other acts serving to explain the grounds for the proposal." * Elements that are underlined are relevant and purposeful in terms of an analysis of the impact of the application of the regulation. ANALYSIS OF THE IMPACT OF REGULATIONS IN THE REPUBLIC OF CROATIA

10. Assessing the financial impact of regulations On 20 May 2005 – The Government of the Republic of Croatia adopted the Decision concerning the form of standard methodology for assessing financial impact The state administration bodies, in addition to the proposals of regulations and other legislation adopted by the Government, and the proposals of acts and other legislation proposed by the Government, must submit the Form on the assessment of financial impact ANALYSIS OF THE IMPACT OF REGULATIONS IN THE REPUBLIC OF CROATIA

11. Content of the form: Basic data about the sponsor and the proposal; Connection between the draft legislation and the State Budget; Statement of financial impact on the State Budget and other budgets; Impact on employment; Statement on the sources of funding; Potential liabilities for the State Budget; Indicators of success; Explanation and response of the sponsor; Recommendation and a statement on the proposal of the regulation by the Ministry of Finance, and Dates on which the Form was sent and received. ANALYSIS OF THE IMPACT OF REGULATIONS IN THE REPUBLIC OF CROATIA

12. Article 69 of the Agreement (the introductory article of Title VI Approximation of Laws, Law Enforcement and Competition Rules) states: "The Parties recognise the importance of the approximation of Croatia's existing legislation to that of the Community. Croatia shall endeavour to ensure that its existing laws and future legislation will be gradually made compatible with the Community acquis.” ALIGNING THE CROATIAN LEGISLATION WITH THE ACQUIS COMMUNAUTAIRE

13. ALIGNING THE CROATIAN LEGISLATION WITH THE ACQUIS COMMUNAUTAIRE PHASE1 Main areas of the internal market PHASE2 Trade and related issues PHASE3 Other parts of the acquis from the SAA 6 transitional years

14. Standing Orders of the Croatian Parliament Article 136, mark “P.Z.E.” Article 161, summary procedure Instruments for aligning the legislation Statement of Compatibility Table of Concordance of the Provisions of Draft Legislation with the Acquis Communautaire Instruments for aligning the legislation

15. Decision on the measures in the procedure of alignment of thelegislation of the Republic of Croatia with the acquis communautaire of 19 July 2001 As of 1 December 2001, in the preparation of draft regulations aligning the legislation, the state administration bodies must complete the Statement of Compatibility and prepare the Table of Concordance of the Provisions of Draft Legislation with the Acquis Communautaire The completed Statement of Compatibility and the prepared Table of Concordance of the Provisions of Draft Legislation with the Acquis Communautaire must be forwarded to the Ministry of Foreign Affairs and European Integration for review and verification of their alignment Instruments for aligning the legislation

16. Decision of the Croatian Government of 25 February 2004 on the instruments for the alignment of the legislation of the Republic of Croatia with the acquis communautaire and legal acts of the Council of Europe Priorities in the process of aligning the legislation of the Republic of Croatia are based on the SAA, and are reflected in the one-year National Programme for the Integration of the Republic of Croatia into the EU The obligation to complete the Statement and the Table of Concordance has been expanded to the making of subordinate legislation, serving to achieve alignment with the acquis communautaire The competent authority has been extended an opportunity to indicate, next to the draft legislation in the Statement of Compatibility, the need to prepare a consolidated version Instruments for aligning the legislation

17. Decision of the Croatian Government on the instruments for aligning the legislation It states that any (draft) proposal of the regulation aligning the legislation which is not accompanied by a completed Statement of Compatibility and the prepared Table of Concordance will not be sent for further legislative procedure, but will be returned to the competent authority for further work It binds the state administration bodies to involve the Ministry of Foreign Affairs and European Integration in the very initial phases of preparing the (draft) proposal of the regulation aligning the legislation It states that the Ministry of Foreign Affairs and European Integration provides all technical and expert assistance that is needed

18. Table of Concordance of the Provisions of (Draft) Legislation with the Acquis Communautaire / Legal Acts of the Council of Europe Statements as to the alignment of (draft) legislation with the provisions of the Stabilisation and Association Agreement between the European Communities and its Member States and the Republic of Croatia Statements as to the alignment of (draft) legislation with the acquis communautaire and the legal acts of the Council of Europe Data relevant to the process of aligning the legislation (participation of consultants in the making of (draft) legislation and their opinion on the alignment, translation of the sources of EU law to Croatian, translation of (draft) legislation to one of the official languages of the EU) Instruments for aligning the legislation

19. Table of Concordance of the Provisions of Draft Legislation A comparative listing of the provisions of (draft) legislation and the provisions of EU legislation An indication of their alignment A presentation of the reasons for their partial alignment or absence of alignment An indication of the foreseen date to achieve complete alignment Based on the prepared Table of Concordance, the competent authority completes the part of the Statement relating to the alignment of (draft) legislation with the acquis communautaire and the legal acts of the Council of Europe Instruments for aligning the legislation

20. 1. Title of EU legislation/legal act of the Council of Europe and its scope and objective 2. Title of (draft) proposal and its scope and objective 3. Degree of alignment with primary source of EU law 4. Degree of alignment with EU legislation (secondary source of law/legal acts of the Council of Europe a) b) c) d) e) Provisions and requirements of the acquis (Article, Paragraph, Item)/legal act of CE Provisions of (draft) proposal (Title, Section, Article, Paragraph, Item, etc.) Degree of harmonisation of the provisions of the (draft) proposal with the EU provision /legal acts of CE (aligned, partially aligned, non-aligned) Reasons for partial alignment or absence of alignment Deadline for complete alignment 5. Degree of alignment with other sources of EU law

21. NPIEU 2006 Political criteria Economic criteria Legal adjustments Administrative capacity building Table – Administrative Capacity Building • Adopting the acquis communautaire(Annex A) • Priorities • Directives/acquis communautaire Table of planned budgetary funds and foreign assistance funds – Annex B

22. NPIEU 2007 Political criteria Economic criteria Legal adjustments Administrative capacity building • Adopting the acquis communautaireand relevant implementing measures (AnnexA) • Priorities • Directives/acquis communautaire Table of planned budgetary funds and foreign assistance funds – Annex B

23. a) Legislative measures and the related sublegislation

24. Amendments to the Decision on the procedure of making and adopting negotiating positions of the Republic of Croatia in the negotiations on accession of the Republic of Croatia to the European Union Adopted by the Croatian Government on 20 April 2006 Statement on the assessment of financial impact on the Form for the assessment of financial impact of the alignment of Croatian legislation with the acquis communautaire (Form PFU EU) ASSESSMENT OF FINANCIAL IMPACT IN THE PREPARATION OF NEGOTIATING POSITIONS

25. Working groups for the preparation of negotiations give a statement on the assessment of financial impact by chapters for: New programmes, strategies, action plans Amendments to programmes, strategies, action plans New legislation and subordinate legislation Amendments to legislation and subordinate legislation Establishment of new agencies or similar organisations Financial participation for inclusion in certain programmes Other activities ASSESSMENT OF FINANCIAL IMPACT IN THE PREPARATION OF NEGOTIATING POSITIONS

26. Procedure for making and adopting the financial impact assessment The form PFU EU is forwarded for opinion to the Ministry of Financeand other state administration bodiescompetent for the issues covered by the chapter, together with the working draft of the proposed negotiating position Within seven days of receiving the Form PFU EU, the Ministry of Finance forwards its opinion on the Form to the member of the Negotiating Team in charge of the chapter concerned The working group then makes the draft proposal of the negotiating position and, together with the Form PFU EU, which includes the opinion of the Ministry of Finance, forwards it to the Negotiating Team The Negotiating Team reviews and adopts, in addition to the draft proposal of the negotiating position, the statement on assessment of financial impact given on the Form PFU EU, and forwards them to the Coordinating Committee ALIGNING THE CROATIAN LEGISLATION WITH THE ACQUIS COMMUNAUTAIRE

27. 28 September 2006 – Decision establishing the Special Unit for HITROREZ as a working body of the Government of the Republic of Croatia Task – to examine, review and analyse the valid regulations, to establish the existence of normative and administrative obstacles, and to propose measures for their simplification or elimination Aim – to eliminate and simplify the existing procedures laid down in various regulations in order to boost direct domestic and foreign investments through the introduction of a friendly regulatory environment and through the mitigation of corruption HITROREZ

28. Functioning of HITROREZ Regulatory bodies will make an extensive list of regulations within their competence In the procedure of HITROREZ, there is a set of simple questions that need to be answered with respect to each regulation: Is it necessary? Is it in accordance with law? Is it business-friendly? Is it in line with the WTO regulations? Is it in line with the EU standards? HITROREZ

29. By using these criteria, the regulations are examined three times: By the state administrationbodies with the right to pass the regulations, By interested parties, like enterprises and entrepreneurs, By the Special Unit for HITROREZ with 12 trained professionals; Once the three examination procedures are over, the Special Unit for HITROREZ makes a list of all regulations that need to be simplified or which are regarded as unnecessary/surplus The Croatian Government prepares the method to amend or place the regulations out of force HITROREZ

30. Further activities: Re-evaluation of the regulations at the level of local/regional government and self-government Improvement of the legislative procedure by introducing a systematic analysis of the impact of legal regulations in accordance with internationally recognised standards (Regulatory Impact Assessment) HITROREZ