With Regulation 2001/7 On the Authorization of Possession of Weapons in Kosovo and 2001/10 On the Prohibition of Unauthorized Border/Boundary Crossings entering into force on 4 June, the newly formed Pillar I (Police and Justice) has two new important tools for bringing law and order to Kosovo at its disposal. The two regulations, passed to improve safety and security, will soon be complemented by an anti-terrorism law, which will give police additional powers to thwart terrorist activities.

Weapons   
The weapons possession regulation goes into effect following a one-month amnesty period in which preliminary figures show over 700 firearms, including rocket lounchers and machine guns, as well as over 300 hand granades and anti-personnel mines were handed over to KFOR or UNMIK police.
 
People who took advantage of the amnesty period avoided the possibility of prosecution for weapons possession. Others could be liable to prosecution and imprisonment for up to 10 years and/or fines up to DM 20,000.
 
While UNMIK police acknowledge that the number of weapons in circulation have been greatly reduced over the past two years through seizures and voluntary handovers, they considered the regulation vital for tackling the large number of crimes still committed with weapons. It focuses particularly on weapons of war that no society tolerates: grenades, pistols and automatic weapons.
 In future, only those in possession of UNMIK-issued Weapons Authorization Cards (WACs) will be permitted to carry firearms. The possession of hunting and recreational weapons is still permitted, but their possession will be also be controlled by a future regulation.

Border crossing
The border and boundary crossing regulation is designedto prevent the movement of extremists into and out of Kosovo-a response to ongoing threats to law and order in Kosovo and the surrounding region."We know that there are individuals and groups in Kosovo with ties to armed extremists outside Kosovo. This regulation will help us to cut those ties," says SRSG Hans Haekkerup. At the same time, SRSG notes that instability outside of Kosovo-if imported here-could threaten the progress achieved in political and economic development, as well as inter-ethnic relations.
  
To facilitate the legal movement of people, UNMIK has designated 19 border and boundary crossing points. All wanting to cross a border or boundary must use these points rather than informal roads or footpaths. Possible penalties for those crossing in groups are much greater than for individuals. If perpetrators who have been previously convicted of violating the regulation, if they attempt to flee, cross under the cover of darkness or are found in possession of weapons, ammunition, military clothing, supplies or equipment they will be liable to prison terms of 45 days to one year.
 
The regulation does not aim to punish people like farmers who accidentally cross the border while tending their livestock and, as such, prosecution in cases of that type will be discretionary. But, the new regulations make it easier to prosecute elements aiming to destabilize the situation in Kosovo.

 Budget revenues on track but vulnerable

The Central Fiscal Authority's ability to monitor budget performance is improving. Its oversight tools have now  reached a level where, with a third of the fiscal year behind us, they can already able to detect trends in Kosovo's public income and spending levels that may require corresponding attention from JIAS department heads.

Based on January to April returns, the Authority's overall assessment is that  revenues (Kosovo's income from taxation, customs and excise) are broadly on track. However, they remain vulnerable to disruptions. "Kosovo is a prisoner of the region's stability levels," CFA Co-Head Tony Preston-Stanley warned his peers at least week's Council of Co-Heads meeting. On the positive side, collection of presumptive taxes was slightly up on forecast levels. There, also, is a source of concern: compliance levels remain at around 50 per cent.

On the expenditure side, the good news concerning central spending by JIAS departments on public wages and salaries is that overall they are actually closely tracking their planned levels. Nevertheless, outlays on wages and salary in the big-spending departments (especially education and health) need close watching. Departmental spending on goods and services, in contrast, was significantly (40%) below par. This is important, because departments that start the year spending less than their allocated amounts tend to continue that way, never catching up, Preston-Stanley warned his peers.

If these trends hold through May and June, the larger departments could fare poorly during preparations for the IAC mid-term budget review in August. They are advised to take action now  to reduce their staffs to planned levels and raise their spending rates on goods and services. They also  risk adjustments not to their liking in the Kosovo Consolidated Budget soon to be drafted for 2002.

Boundary collections crucial
The first trimester figures confirm the importance of UNMIK policy on raising taxes at Kosovo's borders and, in particular, the boundary with Serbia proper.

The territory's vulnerability was visible when Macedonia closed its border with Kosovo for three weeks in March:  revenue collection immediately dropped by half (by DM 3 million). It has since returned to previous levels.

Conversely, revenues rose by nearly as much (DM 2 million) when crossing points on the boundary with Serbia were barricaded. Previously untaxed goods entered instead via Pejė/Pec and their due taxes were collected.

From a budget perspective, therefore, boundary taxation is crucial, CFA says. Until that happens, revenue forecasting will remain soft and the whole budget exercise will be insecure.

The budget outcome will also depend on how donors contributing to the budget react to any revenue surplus above forecast levels-whether they reduce their promised contributions or agree to their use for previously unplanned purposes. One such use would be advance training and other preparations for the addition staff required when the new Assembly takes office.

OSCE Permanent Council passes budget for elections

Briefs . . . .

UNMIK Railways has signed a letter-of-intent with Yugoslav Railways to facilitate rail traffic to Kosovo across the administrative boundary. The signing follows a similar accord reached a week ago with the Railways of the Former Yugoslav Republic of Macedonia. Both agreements open the way for the movement of international freight across those borders and boundaries and are very important steps for the normalization of the railways, opening new avenues for economic trade. Rail freight traffic in Kosovo will also help cut down on the number of trucks on the roadways, thus  decreasing congestion and pollution. In the north, some tracks and a tunnel need repairs before the commercial traffic will resume, which is expected later during the summer. Meanwhile, the Pristina-Pejė/Pec passenger line, re-established recently, runs twice a week, taking 300 passengers at a time.

A regulation on the establishment of Radio Television Kosovo, approved by the IAC, will formally establish RTK as the sole public service broadcaster in Kosovo. The aim is to give the people of Kosovo access to reliable, non-partisan information from an independent public service broadcaster, free from political interference and state control. RTK will have an independent nine-member board of directors, made up of six representatives from Kosovo and three internationals. To prevent conflict of interest and safeguard RTK's independence, no-one holding elected public office, being a member of the executive body of a political party or having financial interests in the telecommunications or broadcasting industries may sit on the board. Nominations for the local representatives will be sought through the NGO Assembly, the Association of Journalists of Kosovo, the Senate of the University of Pristina and the Workers' Union of the RTK-thus giving the Kosovo society a say in how RTK is run. The regulation also obliges RTK to give a voice to all communities in Kosovo. At least 15 per cent of its prime-news coverage and programming must be in languages of Kosovo's non-majority communities.

The Governing Board of the Banking and Payments Authority (BPK) has granted approval for a new commercial bank-Banka Ekonomike-to operate in Kosovo. It is the fourth commercial bank to have been issued a licence to operate in the province. Kosovo is thus beginning to develop a real banking sector, with real competition that will benefit all bank customers. All four banks are responsible to the BPK and have to meet its strict operating criteria. With the changeover to the euro approaching fast, all of Kosovo's citizens who do not already have bank accounts are encouraged to open one: it is the simplest way to ensure their money is changed into Euros without having to worry, BPK says.

The air in and around Pristina should improve this winter, thanks to a DM 5 million environmental investment package for the Obiliq power station, recently approved by the German Bank of Reconstruction. The funds will provide electrostatic precipitators for units A-3 and A-4, enable installation of an ash removal system and pay for a water treatment plant to control river and ground water contamination emanating from the plants. The three projects will be implemented between July and November 2001 as part of a broader technical assistance package funded by KfW, GTZ and DEG-the three main German aid agencies working in Kosovo.

Some 272 NGOs operating in Kosovo may lose their Public Benefit Status (PBS) if they fail to submit completed annual reports to the UNMIK NGO Liaison and Registration Unit within 30 days, according to notices recently issued to them by the Unit. The PBS allows NGOs that engage in charitable activities-such as humanitarian aid and reconstruction, education and training etc.-to be excluded from customs duties and sales and excise taxes. The notices were issued because those NGOs did not submit their annual reports before the established deadline of 30 April 2001. This requirement applies to both local and international NGOs.

Municipalities could get an important new source of revenue, namely taxes on immovable property, under plans being developed by the Central Fiscal Authority. So far, municipalities have only been given the right to impose fees and charges. Pilot projects in selected municipalities expected to be initiated soon will test the plans and enable adjustments to a draft tax regulation. One possibility is that the tax will be imposed on property users rather than property owners. The goal is to send the first tax bills in July, starting with registered business enterprises and then to gradually expand the tax base.

The mobile network, GSM-VALA900, is extending its prepaid platform from the present 80,000 to 105,000 subscribers. This is an interim phase between Phase 1 (80,000 subscribers) and Phase 2, which will increase the capacity of the platform up to 400,000. After Phase 2 is implemented, the mobile network services will cover 80 per cent of Kosovo.

Summer coaching camps will be held again this year. Lessons learned in 2000 have been identified and measures incorporated to avoid repeating some mistakes. Camps for pioneers will be held at the municipal level, and those for juniors at the Kosovo level through the respective sports federations. The Department of Sports has issued guidelines to the municipalities and federations.