20 June 2012 To: Mayors of Kosovo Municipalities Chairpersons of Municipal Assemblies

Subject: Explanatory memorandum Dear all, The Ministry of Local Government Administration has identified the necessity to draft an explanatory memorandum in relation to the conditioning of public municipal services to citizens, with the payment of the latters obligations to Local and Regional Publicly Owned Enterprises. The Ministry of Local Government Administration, pursuant to its legal mandate determined by Law No. 03/L-040 on Local Self-Government, and Annex XII of Regulation 02/2011, on Areas of Administrative Responsibilities of the Office of Prime Minister and Ministries, after having thoroughly reviewed the applicable legislation regulating the relevant sphere, hereby concludes the following: Municipalities may condition the provision of services to their citizens, whenever they assess that such endeavours will support the accomplishment of public interest, which should, above all, serve citizens needs, and not directly hinder human rights and freedoms. In relation to the conditioning of municipal services with property tax payment, municipalities base their actions on Administrative Instruction No. 03/2004. The services listed in this instruction include: all services provided by Municipal Cadastral Offices, construction permits, inspection of building construction, licences for use of municipal property, licences/permits for use of alcoholic beverages, licences for use of buildings for professional activities, licences of vehicles ownership within municipal boundaries and licences for commercial garages. The conditioning of citizen services by municipalities with the payment of their obligations to Municipal Publicly-Owned Enterprises is not legally grounded, and as such should not be applied. Article 128 of Law No.03/L-123 on Business

Organizations and Law No. 03/L-087 on Publicly-Owned Enterprises clearly stipulate that joint-stock companies are responsible for all other debts and obligations, including their assets and property, and that no other party shall be responsible for the obligations of the joint-stock company based on the attribute of being a shareholder in such company. Based on the above, we conclude that limitation of services that municipalities provide for citizens, businesses and economic operators that function within its territory, with payments of waste collection bills to the Regional Municipal Public Enterprise, is in contradiction with the legislation in force in Republic of Kosovo. Ministry of Local Government Administration, based on the above and pursuant to the legislation in force, requests from municipal organs, respectively from Mayors of Municipalities and Municipal Assemblies of Republic of Kosovo, to issue their decisions in compliance with the legislation in force in Republic of Kosovo. Ministry of Local Government Administration is committed to offer support and necessary assistance to municipal organs, in order to ensure full implementation of obligations deriving from the applied legislation.

Respectfully, Slobodan Petrovic, Deputy Prime minister and Minister of MLGA [Signature]

Copy: Besnik Osmani, General Secretary of MLGA Directors of MLGA Departments MLGA Archive