Communication from the Commission - Hungary: Accession Partnership
29. 6. 98 EN Official Journal of the European Communities C 202/33 HUNGARY: ACCESSION PARTNERSHIP (98/C 202/04) 1. INTRODUCTION recommended the Commission In the opinion which it submitted to the Council in July 1997, in accordance with the provisions of Article O of the Treaty, that negotiations for accession should be opened with Hungary. This recommendation derives from the analysis contained in the opinion in which the Commission is of the view that Hungary (i) presents stable institutions, guarantees the rule of law, human rights and the protection of minorities, (ii) can be regarded as a functioning market economy able to cope with the competitive pressure and market forces within the Union in the medium term, and (iii) should be capable in the medium term of applying the acquis provided it continues its efforts on its transposition and intensifies its work on its implementation. The Europe Agreement will remain the basis for the European Union’s relations with Hungary. However the pre-accession strategy will be reinforced to enable assistance to be directed towards the specific needs of each applicant so as to provide support for overcoming particular problems identified in the opinion. As the Commission indicated in Agenda 2000: ‘The reinforced pre-accession strategy has two main objectives. First, to bring together the different forms of support provided by the Union the Accession Partnerships, and to work together with the applicants, within this framework, on the basis of a clearly defined programme involving commitments by the applicants to particular priorities and to a calendar for carrying them out. Second, to familiarise the applicants with Union policies and procedures through the possibility of their participation in Community programmes. ’ for membership, in a single to prepare framework, that At its meeting in Luxembourg in December 1997 the European Council the Accession decided Partnerships would be the key feature of the enhanced pre-accession strategy, mobilising all forms of assistance to the applicant countries within a single framework. This Accession Partnership has been decided by the Commission, after consulting Hungary and on the basis of the principles, priorities, intermediate objectives and conditions which have been decided by the Council. financial means available to help Hungary implement these priorities and the conditions which will apply to that assistance. This Accession Partnership provides a framework for a number of policy instruments which will in their be used to help the candidate countries preparations for membership. These will include, inter alia, the National Programme for the Adoption of the Acquis to be adopted by Hungary, the Joint Assessment of Economic Policy Priorities, the Pact against Organised Crime and the internal market road maps. Each of these instruments is different in nature and will be prepared and implemented according to specific procedures. They will not be an integral part of this Partnership but the priorities they contain will be compatible with it. 3. PRINCIPLES The main priority areas identified for each candidate country relate to their ability to assume the obligations of meeting that membership requires: the Copenhagen criteria which state — that the candidate country has achieved stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities, — the existence of a functioning market economy, as well as the capacity to cope with competitive pressure and market forces within the Union, — the ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union. At its meeting in Madrid, the European Council stressed the need for the candidate countries to adjust their administrative structures to ensure the harmonious operation of Community policies after accession and at Luxembourg it stressed that incorporation of the acquis into legislation is necessary, but not in itself sufficient; it is necessary to ensure that it is actually applied. 2. OBJECTIVES The purpose of the Accession Partnership is to set out in a single framework the priority areas for further work identified in the Commission’s opinion on Hungary’s application for membership of the European Union, the 4. PRIORITIES AND INTERMEDIATE OBJECTIVES and The Commission’s opinions the Council’s examination of these have highlighted the extent of the efforts which still have to be made in certain areas by the candidate countries to prepare for accession and took the view that none of these countries fully satisfies all of the Copenhagen criteria at the present time. This situation C 202/34 EN Official Journal of the European Communities 29. 6. 98 will require the definition of intermediate stages in terms of priorities, each to be accompanied by precise objectives to be set in collaboration with the countries concerned, the achievement of which will condition the degree of assistance granted and the progress of the negotiations under way with some countries and the opening of new the others. The priorities and negotiations with intermediate objectives have been divided into two groups — short and medium term. Those listed under the short term have been selected on the basis that it is realistic to expect that Hungary can complete or take them substantially forward by the end of 1998. In view of the short time span, and taking into account the administrative capacity required to achieve them, the number of priorities selected for the short term has been limited. The priorities listed under the medium term are expected to take more than one year to complete although work may and should also begin on them during 1998. Hungary will be invited to draw up a National Programme for the Adoption of the Acquis (NPAA) by the end of March which should set out a timetable for achieving these priorities and intermediate objectives and, where possible and relevant, indicate the necessary staff and financial resources. The Accession Partnership indicates that Hungary will have to address all issues identified in the opinion. The annex provides a these. summary Incorporation of the acquis into legislation is not in itself sufficient; it will also be necessary to ensure that it is actually applied to the same standards as those which apply within the Union. In all of the areas listed below there is a need for credible and effective implementation and enforcement of the acquis. checklist of Drawing on the analysis of the Commission’s opinion and the Council’s examination of this, the following short and medium-term priorities and intermediate objectives have been identified for Hungary. 4. 1. Short term (1998) — Economic reform: review and update the country’s medium-term economic policy priorities within the framework of the Europe Agreement; advance structural reforms (particulary with regard to the health care system). — Reinforcement of institutional and administrative capacity: in particular in the areas of veterinary and phytosanitary regards facilities at the external borders) environment, customs policy, internal financial control and regional development. (particularly as controls — Internal market: standardisation including certification (further alignment of and legislative measures and conclusion of a European Conformity Assessment Agreement), State aids (adoption of legislative framework, definition of role and powers of monitoring authority, enforcement) and increased transparency through improvement of aid inventory. intellectual property rights and Enforcement of further alignment of company law. Complete alignment and transparency of public procurement legislation to cover fully utilities sector. increased — Justice and home affairs: implementation of appropriate refugee legislation consistent with 1951 Geneva Convention, development of effective border management. — Environment: continue transposition of framework legislation, establishment and commencement of approximation implementation programmes and implementation strategies related to individual acts. Planning and commencement of implementation of these programmes and strategies. detailed of 4. 2. Medium term — Political criteria: further efforts to improve the integration of the Roma. — Economic reform: continue the conditions for strong investment growth through the sustained implementation of prudent macroeconomic policies and the advancement of structural reforms. to consolidate — Economic policy: the regular review of joint assessment of economic policy priorities, within the Europe Agreement framework, focusing on satisfying the Copenhagen criteria for membership of the Union and the acquis in the area of economic and monetary policy (coordination of economic policies, submission of convergence programmes, avoidance of excessive deficits); while Hungary is not expected to adopt the euro immediately on accession, it is expected to pursue policies which aim to achieve real convergence in accordance with the Union’s objectives of economic and social cohesion, and nominal convergence compatible with the ultimate goal of adoption of the euro. — Reinforcement of improved operation of the institutional and administrative capacity: development of anti-fraud unit and State audit office, judicial system, training for the judiciary in Community law and its application; reinforcement of justice and home affairs institutions (ensuring sufficient and properly trained personnel, in particular police, border guards, ministries and courts), reform of customs and tax administrations to ensure readiness to apply the 29. 6. 98 EN Official Journal of the European Communities C 202/35 the control acquis, administration and strengthening of the nuclear safety authority. reinforcement food of protection, undertake steps to bring public health standards into line with European Union norms. — Internal market: including further development of standardisation and conformity assessment bodies and establishment and operation of a market surveillance system, alignment of technical legislation on industrial products, further alignment of competition law, in particular for State aid, reinforcement of monitoring authorities both for competition and State aids, alignment of capital liberalisation, financial services, consumer protection, audiovisual policies and including promotion of enterprise development, SMEs, alignment with the acquis in the fields of telecommunications, consumer protection and the internal energy market. — Justice and home affairs: including implementation of migration policy and asylum procedures as well as the fight against organised crime (in particular money laundering, drugs and trafficking in human beings) and corruption, and clarification of admission provisions for immigrants, and to align visa policy with that of the European Union and to complete alignment to international conventions, notably in view of the Schengen acquis. the — Agriculture: including alignment with the agricultural (including veterinary and phytosanitary acquis in particular external border controls), matters, attention to environmental aspects of agriculture and biodiversity. Development of to implement and enforce the common agricultural policy, in particular the fundamental management mechanisms and administrative structures to monitor the agricultural markets and implement structural and rural and implementation of the veterinary and phytosanitary requirements, upgrading of certain food-processing establishments and testing and diagnostic facilities, restructuring of the agri-food sector. development measures, adoption capacity — Transport: further efforts on alignment with acquis in particular in rail and road transport (technical controls), and to provide necessary investment for transport extension of trans-European networks. infrastructure, notably as policies preparation employment — Employment and social affairs: development of appropriate labour market structures and joint review of for coordination; in European Union participation alignment of labour and occupational health and safety legislation and development of enforcement structures, the framework Directive on health and safety at work; enforcement of equal opportunities between women and men; further development of active, autonomous social social dialogue; in particular early adoption of further development of — Environment: the planning including capacities, development of monitoring and implementation control structures and and continuous implementation of approximation programmes related to individual legal acts. A particular emphasis should be given to the waste water, waste management, air pollution and integrated industrial pollution control and risk management. Environmental protection requirements sustainable development must be integrated into the definition and implementation of national sectoral policies. need and the for — Regional policy and cohesion: further strengthen budgetary instruments, monitoring and control mechanisms in order to participate in European Union structural programmes after membership. procedures, financial 5. MAIN INSTRUMENTS FOR COMMUNITY TECHNICAL AND FINANCIAL ASSISTANCE 5. 1. Programming of financial resources The Phare allocation for the period 1995 to 1997 has totalled ECU 282 million. Subject to the approval of the Phare budget for the remaining period, the Commission will confirm the allocations for 1998 and 1999. Financial proposals will be submitted to the Phare Management Committee as provided for in Council Regulation (EEC) No 3906/89. Joint financing by the applicant countries will be systematically required for all investment projects. The Commission will work with Hungary, the EIB and international financing in particular the EBRD and World Bank, with a view to facilitating the to pre-accession co-financing of projects priorities. Financial assistance from the year 2000 onwards will comprise aid for agriculture and a structural instrument which will give priority to measures similar to the Cohesion Fund. In addition Hungary will have access to funding from multi-country programmes directly related to the acquis. institutions, relating The Phare programme is the main financial instrument of the reinforced pre-accession strategy. Phare’s prime objective is to help prepare Central and East European countries for accession by focusing the assistance it provides on the adoption of the Community acquis and in particular on the priorities identified in this Accession Partnership and in the National Programme for the Adoption of the Acquis. Each year the Commission will C 202/36 EN Official Journal of the European Communities 29. 6. 98 sign a financing memorandum with Hungary in which Hungary will undertake to meet a number of the priorities identified in this Accession Partnership and the Commission will undertake to contribute financially to their realisation. Programming of Community financial assistance will take into account the priorities and timetable of the NPAA. In addition, the subsequent allocation of financial assistance will be closely tied to the respect by the Hungarian Government of the commitments made in the NPAA. Certain pre-accession activities can be reinforced now (e. g. support for institution building) but others, such as the financing of major investment projects designed to meet the requirements of the acquis in areas such as environment and nuclear safety will have to be programmed over a period of five to six years. From 1998 Phare assistance will be channelled through the following types of actions: — Institution building (around 30 %), which involves the strengthening of democratic institutions, rule of law, public administration and all entities responsible for public services in order to establish the necessary institutional and administrative structures and train the people required to apply the acquis. Institution building support will be implemented, inter alia, through, training actions, technical assistance and twinning of in Hungary with relevant bodies in the Member States. Initially this twinning will focus on priority areas such as finance, agriculture, environment, justice and home affairs. institutions and administrations in covering particular — Investment support (around 70 %), in order to make the necessary investments possible for the adaptation of Hungarian infrastructure to the Community acquis. This support will concentrate on: (i) structural actions, agricultural restructuring, regional development and investment in human and intellectual capital, which could include Phare contributions to participation in the research and framework programme; (ii) compliance with Community norms, in particular as regards environment, agriculture, industry, occupational safety and health, transport and telecommunications; (iii) co-financing of large and scale medium-sized enterprises development (2). infrastructure (1) technological development small and (iv) (1) Concerning investment projects in general, Hungary will be required to fulfil the principle of complementarity by means of contributing a minimum amount of 25 % to jointly financed projects. (2) A horizontal facility for SMEs will be available to remedy the shortage of investment capital available to small enterprises. 5. 2. Role of international financial institutions Cooperation between Hungary and the international financial institutions will receive a new impetus and a new focus through the Accession Partnership. The grant resources made available under the Accession Partnership will serve as seed money and a catalyst for larger amounts of development finance from the IFIs. This process will be developed by the Commission in liaison with the candidate countries, the EIB and the IFIs, in particular the EBRD and the World Bank with a view to facilitating the co-financing of projects relating to pre-accession priorities. Under a new lending mandate covering the period 1997 to 1999, the EIB can make available ECU 3 520 million in Central and Eastern Europe. The new pre-accession facility approved by the EIB’s governors in early 1998 increases this amount to ECU 7 billion. EIB loans shall be used in all sectors eligible for EIB financing to facilitate the accession process. 6. CONDITIONALITY steps further Community assistance will be conditional on respect by the Europe its commitments under Hungary of Agreement, the Copenhagen criteria and progress in implementing this Accession Partnership. Failure to respect these general conditions could lead to a decision by the Council on the suspension of financial assistance on the basis of Article 4 of Council Regulation (EC) No 622/98. satisfying towards 7. IMPLEMENTATION OF PRE-ACCESSION ASSISTANCE The provision of financial assistance to Hungary will depend on the maturity of projects proposed by the Hungarian Government for inclusion in a financing memorandum. Where projects need to be tendered the Commission will only finance those projects which are ready for tendering at the stage of the signature of the financing memorandum. In addition any previous/existing commitments in the same sector must have been fully contracted or be on track. In order to ensure efficient implementation, projects to be financed must not, in principle, fall below a threshold of ECU 2 to 3 million, in particular in the case of infrastructure projects. If these principles lead to a situation where Hungary cannot absorb its full indicative allocation, the allocation will be reduced accordingly. The difference between the indicative and final allocation will be transferred to the 29. 6. 98 EN Official Journal of the European Communities C 202/37 horizontal SME and/or the large scale infrastructure facility. No subsequent compensation of this amount will be made. The Government of Hungary is invited to put in place an implementation structure which ensures coherence and complementarity between all types of European Union financial assistance and national resources. A national coordinator will be responsible for ensuring a close link the the general accession process and between programming of the Community financial assistance. and institution promotion The Government of Hungary will establish (preferably in the Ministry of Finance) during 1998 a national fund for investment building functioning under the responsibility of a National Authorising Officer (NAO). As the central entity through which Phare and other forms of Community financial assistance will be channelled, the national fund will be responsible for the management of these funds under decentralised increase transparency and reduce dispersion of funds. It will have overall responsibility for management of funds including respect of provisions of the financing memorandum and be accountable to the Commission for the use of the funds. It will also ensure and supervise the flow of national and other co-financing resources as set out in the financing memorandum. The detailed functions and responsibilities of the national fund will be set out in the individual financing memoranda. implementation in order to a of policy pursue In cooperation with the Government of Hungary, the Commission will further decentralisation of the implementation of the financial assistance where certain pre-conditions are met, and to the extent permitted by the European Communities’ Financial Regulation, in particular Article 105(3). This will be done with the intention to establish, within limits and in a gradual manner, a relationship between the Commission and Hungary where responsibility is shared along the lines of the relationship existing with the Member States for implementing the Structural Funds. its Financial Regulation, of the European Community’s public procurement rules and equal participation in tenders and the provisions of Article 118. Any decision on the use of national procurement rules will be taken by the Commission on a case-by-case basis individual financing and will be confirmed memoranda. including in the individual jointly with in the Commission the The monitoring of programme implementation shall be through carried out procedures established financing memoranda. In order to ensure effective monitoring of implementation Phare assistance programme, each Phare programme will incorporate quantified physical and financial objectives which will be specified in the financing memorandum. In order to gauge their effectiveness all operations financed under the Phare programme will be subject to ex-post evaluation to appraise their impact with respect to their objectives. under the of 8. MONITORING The implementation of the Accession Partnership will be monitored in the framework of the Europe Agreement. This will commence in 1998 before the Commission presents its first regular report to the Council reviewing the progress made by Hungary including implementation of the Accession Partnership. in the appropriate The relevant sections of the Accession Partnership will be discussed subcommittee. The Association Committee will discuss overall developments, progress and problems in meeting its priorities and intermediate objectives as well as more specific issues referred to it from the subcommittees. The Association Committee will report to the Association Council on the implementation of the Accession Partnership. The Phare Management Committee will ensure that financing decisions are compatible with the Accession Partnerships. In this context, the possibility of applying national procurement procedures in the tendering and contracting of Phare projects may be explored by the Commission, if so requested by the Government of Hungary, in particular in the field of investment. The Commission’s decision on this matter will be taken following, inter alia, examination of the Hungarian national procurement law for respect of and compatibility with the basic provisions The Accession Partnership will be amended as necessary in accordance with Article 2 of Regulation (EC) No 622/98. The Commission will propose a review of this partnership before the end of 1999 and at regular intervals include consideration of the need to further specify intermediate objectives in the light of the progress made by Hungary in meeting the objectives set out in this partnership. thereafter. These reviews will C 202/38 EN Official Journal of the European Communities 29. 6. 98 ANNEX Hungary will have to address all issues identified in the opinion. The purpose of this Annex is to provide a summary checklist of these issues. These are formulated as recommendations for action. They are listed in the order in which they appear in the opinion without any ranking in terms of importance or urgency. The priority areas for action by each candidate are set out as priorities and intermediate objectives in the Accession Partnership itself. 1. Political criteria Efforts will have to be made to build on the measures taken by the government to ensure justice and protection for the Roma. Particular measures must be taken to streamline the operation of the judicial system, to train judges to a higher standard, and to ensure stability in the Constitutional Court. In addition, the fight against corruption needs to be made more effective. 2. Economic criteria Hungary should consolidate the conditions for sustainable growth, maintaining a sound budgetary position and continuing to implement sound macroeconomic policies. The reform of the social security system needs to be completed to underpin macroeconomic stability. Further steps should be taken to strengthen the regulatory mechanisms which enable a market economy to function effectively. Hungary must implement a comprehensive range of policies to ensure that inadequacies in the functioning of the labour market do not hamper Hungary’s ability to withstand competition in the Single Market. 3. Ability to assume the obligations of membership 3. 1. Internal market without frontiers The four freedoms G e n e r a l f r a m e w o r k — efforts must be made to approximate and enforce legislation in the fields of intellectual property, company law, accounting, data protection, and public procurement, in particular the utilities sector (energy, telecommunications, water and transport). F r e e m o v e m e n t o f g o o d s — the framework legislation which will enable Hungary to implement the basic principles of the European Union system has been adopted. The conformity assessment infrastructure needs to be strengthened and a market surveillance mechanism set up. The approximation of new approach Directives should be accelerated. As regards other sectoral legislation, alignment of pharmaceuticals legislation should be finalised, and approximation of Directives on chemicals and motor vehicles should be completed. Hungary needs to maintain its quick pace of approximation of legislation on industrial products so as to fully adopt the European Union system. F r e e m o v e m e n t o f c a p i t a l — further efforts are still required especially in liberalising outward movements and removing investment restrictions on institutional investors. F r e e m o v e m e n t o f s e r v i c e s — progress in transposing legislation must be accompanied by concrete implementing measures as well as the consolidation of the administration. Recent legislation in the field of banking and insurance allowing the establishment of branches by foreign companies needs to be fully implemented. F r e e m o v e m e n t o f p e r s o n s — as regards mutual recognition of professional qualifications, efforts must be made to ensure the necessary legislative and enforcement measures. Further efforts must be made to ensure the necessary legislative and enforcement measures as regards the coordination of social security schemes. Competition In respect of State aid, further efforts are necessary to ensure full transparency, in particular through the establishment and updating of a comprehensive State aid inventory in accordance with Community practice. Moreover, the legal framework for the granting of State aid must be aligned with EC State aid legislation. It is necessary to review all existing aid measures and modify or abolish those measures which are not 29. 6. 98 EN Official Journal of the European Communities C 202/39 compatible with the Europe Agreement. The necessary powers and procedures must be established for the State aid monitoring authority to implement the monitoring of new aid on a systematic basis. As to sectors traditionally subject to monopolies, the policy of liberalising and opening up to competition should be continued. 3. 2. Innovation Research and technological development Improvements must be made in the level of innovation in the economy as well as in the links between research institutes, industry and small and medium-sized enterprises. Telecommunications Additional regulatory efforts are needed to comply with European Union Directives, in particular in the field of interconnection. At the same time, the acquis now requires governments to ensure that a modern telephone service is available everywhere at an affordable price. Meeting this obligation will require significant investment in the system. Audiovisual Amendments to audiovisual legislation must be completed to ensure full alignment with Community requirements. Structural adaptations of the industry should be pursued. 3. 3. Economic and fiscal affairs Economic and monetary union Central Bank legislation must be made fully compatible with Community rules and the stability orientation of current monetary and exchange rate policies should be maintained. Taxation Additional adjustments must be made to bring VAT legislation completely into line with the requirements of the Community acquis. Particular efforts need to be made as regards the scope of the VAT rate structure and the special VAT scheme for farmers. Significant discrepancies between the Hungarian excise regime and European Community requirements need to be addressed. In the field of excise duties particular attention should be given to the setting up of a warehousing system for the movement of goods under duty suspension arrangements. Tax structures and the level of excise rates need to be aligned with the Community model. Control procedures must be strengthened to combat fraud. Statistics Efforts must be made to clarify the issues of impartiality and confidentiality for Hungary to be able to comply with European Union requirements for official statistics within the next few years. Hungary must make improvements in sectors such as external trade and business statistics. A systematic link between business surveys and the national accounts must also be established. 3. 4. Sectoral policies Industry To enhance competitiveness, further efforts should be made to pursue policies aimed at promoting open and competitive markets and taking on the instruments which make up European Community industrial policy, relating both to the operation of markets (product specification and market access, trade policy, State aids and competition policy) and measures related to industry’s capacity to adapt to change (stable macroeconomic environment, technology, training, etc. ). Agriculture Substantial efforts must be made to ensure the alignment of Hungarian legislation with European Union requirements. With regard to veterinary and phytosanitary requirements, special attention must be paid to the upgrading of establishments and the inspection and control arrangements for protecting the European C 202/40 EN Official Journal of the European Communities 29. 6. 98 Union’s external borders. Administrative structures must be strengthened to ensure the implementation and enforcement of the policy instruments of the common agricultural policy including import arrangements. The agri-food sector must be further restructured to ensure its competitive capacity. Energy Current efforts for alignment must be maintained, in particular with regard to the adjustment of monopolies including import and export, access to networks, energy pricing, State interventions in the solid fuels and uranium sectors, and the development of energy efficiency and fuel quality standards. Special attention must be given to timely implementation of nuclear safety programmes in order to bring all the nuclear reactors into line with safety objectives generally accepted in the European Union. In addition, longer term solutions for nuclear waste need attention. Attention needs to be paid to the strengthening of the nuclear safety authority. Transport Efforts must be made to ensure the full adoption of the necessary European Community legislation and its effective implementation in domestic road haulage (access to the sector, social rules and safety), and for technical checks on passenger cars. Financial transparency and access rights must be provided in the rail sector. Steps must be taken to provide the domestic resources needed to ensure the future extension of the trans-European network. Inspection bodies, in particular for transport safety, should be strengthened. At a national level there is a need to develop specific strategies for transport infrastructure development and financing. Small and medium-sized enterprises Efforts should continue to create an SME-friendly legal administrative environment, with the aim of strengthening SME development. 3. 5. Economic and social cohesion Employment and social affairs Legislation must be aligned with European Union requirements in such areas as health and safety and labour law. Social reform must be further developed and the health system should be improved. An active, autonomous social dialogue and social protection must be developed. The administrative structures must be strengthened to ensure the effective implementation of legislation. Regional policy and cohesion Remaining reforms, in particular the setting up of the necessary instruments of financial control must be implemented to ensure that Hungary is ready to apply Community rules and to channel funds from the European Community structural policies effectively after membership. 3. 6. Quality of life and environment Environment Significant steps must be taken to ensure the full transposition of the environmental acquis as well as substantial progress in ensuring effective compliance. The proposed Hungarian environmental accession strategy should be applied. Particular efforts must be made to achieve full European Union compatibility of the waste, water and nature legislation and to ensure the transposition of framework Directives dealing with urban waste water treatment, drinking water, waste management and air pollution as well as the Integrated Pollution Prevention and Control Directive. Financing strategies must be made in the water, air and waste sectors which require major investments. The potential of market-based instruments as a source of finance needs more attention. A considerable effort must be made to develop adequate implementation and enforcement structures. Public awareness of the environment must be stimulated. Consumer protection Legislation must be amended in such areas as advertising, sales away from business premises, distance selling, unfair contract terms and timeshares. A strong and independent consumer movement, sustained by public authorities, will need to be developed. 29. 6. 98 EN Official Journal of the European Communities C 202/41 3. 7. Justice and home affairs Some important gaps need to be filled in legislation. Institutional resource constraints need to be tackled. Hungary must develop more effective border management systems, especially on the future external borders of the European Union. The new asylum legislation must be implemented, in full compliance with the 1951 Geneva Convention on the Status of Refugees. Hungary must ensure that effective training and institutional development programmes are implemented in the key justice and home affairs institutions. Attention needs to be paid to visa policy. The fight against all forms of organised crime, including drug trafficking, trafficking in human beings, money laundering, counterfeiting, false documents and fraud must be intensified. 3. 8. External policies Trade and international economic relations Remaining balance of payments restrictions need to be phased out prior to accession. Preparations must be made for applying, on accession, the Community’s various cooperation and preferential agreements, multilateral and bilateral commercial policy commitments and its autonomous commercial defence instruments. At the same time, national legislation in the field must be repealed. Customs Customs legislation must be aligned with that of the European Community and the organisation and duties of staff must be aligned with those of a modern customs administration. The scope of activities carried out in the numerous ‘free zones’ must be examined in relation to Community legislation. An effort must be made to develop computerised systems for full participation in the customs union and the internal market. Particular attention must be paid to preparing the customs administrations for the operation of all the customs procedures with economic impact, the system of tariff suspensions and the administration of tariff quotas and ceilings. Strategic planning needs to take account of the reinforcement of border posts along the external frontier that Hungary will have with countries other than European Union Member States at the time of accession. 3. 9. Financial questions Hungary should implement its plans to establish a financial management system corresponding to that used by the Structural Funds of the European Union. The existing accounting system as well as the customs system should be amended to ensure the efficient administration of the ‘own resources’ system. The reliability of the national accounts must be ensured with a view to the accurate calculation of the GNP resource. Hungary must bring its VAT system fully into line with the Community Directives in order to accurately draw up the VAT own resources base. Further efforts must be made to achieve full computerisation and the establishment of a remote data transfer system in order to improve the efficiency of the fight against the black market. 4. Administrative capacity to apply the acquis To ensure the effective implementation and enforcement of the acquis comprehensive reform efforts must be made to strengthen Hungary’s administrative structures in most European Union relevant sectors. Special efforts must be made to clarify certain issues within the administrative framework (e. g. the division of control, scope, tasks, and question of competence). For example, both in the case of agriculture and consumer protection there is a need to establish central control bodies. The management and supervision of local self-government requires significant improvement, while their remit and institutional structure need to be better defined. Efforts are needed to strengthen monitoring and regulatory bodies in the fields of veterinary and phytosanitary controls and food control. Reforms of the judicial system recently adopted must proceed as intended to ensure the judicial system is strengthened in terms of resources and relevant expertise. A comprehensive upgrading and training of judges, particularly in European Union matters, must be carried out. For all levels of the civil service there is a need to consolidate and improve overall professional standards including the implementation of training measures (especially in management skills) and improvements in pay