	Background: An Independent Kosovo

On February 17, 2008, Kosovo declared its independence from Serbia, sparking celebration among the country's ethnic Albanians, who form over 90% of the country's population. Serbia and the Kosovo Serb minority heatedly objected to the declaration and refused to recognize it. KFOR, the NATO-led peacekeeping force in Kosovo, has the role of ensuring the overall security of Kosovo, while leaving policing duties to local authorities and EULEX. The agreements reached from the beginning of the talks until the end of 2012 included ones on free movement of persons, customs stamps, mutual recognition of university diplomas, cadastre (real estate) records, civil registries (which record births, deaths, marriages, etc. for legal purposes), integrated border/boundary management (IBM), and on regional cooperation. The 15-point agreement calls for the creation of an "Association/Community of Serbian-majority municipalities" in Kosovo. The agreement faces serious challenges to its implementation, including the strong opposition of most Serb leaders in northern Kosovo. Kosovo's Other Challenges

Kosovo faces daunting challenges as an independent state in addition to those posed by its struggle for international recognition and the status of its ethnic minorities. Kosovo suffers from weak institutions, particularly in the area of the rule of law. As noted above, despite the differences between member countries on recognizing Kosovo's independence, the European Commission recommended on April 22, 2013, that the EU open negotiations on a Stabilization and Association Agreement (SAA) between Kosovo and the EU. The United States has urged other countries to extend diplomatic recognition to Kosovo, with mixed success. Although strongly supporting the Serbia-Kosovo talks, U.S. officials have said the United States is a "guest," not a participant or mediator. On September 10, 2012, the White House issued a statement by President Obama hailing the end of supervised independence in Kosovo. He said Kosovo has made "significant progress" in "building the institutions of a modern, multi-ethnic, inclusive and democratic state." He added Kosovo had more work to do in ensuring that the rights enshrined in the country's constitution are realized for every citizen. President Obama also called on Kosovo to continue to work to resolve outstanding issues with its neighbors, especially Serbia. U.S. Aid to Kosovo

U.S. aid to Kosovo has declined significantly in recent years. For FY2013, the Administration requested a total of $57.669 million for Kosovo. Of this amount, $42.544 million is aid for political and economic reforms from the Economic Support Fund (ESF), $10.674 million from the International Narcotics Control and Law Enforcement account (INCLE), $0.7 million in IMET military training aid, $3 million in Foreign Military Financing (FMF), and $0.75 million from the Nonproliferation, Antiterrorism, Demining and Related Programs (NADR) account. In its FY2014 budget, the Administration aid request for Kosovo includes $41 million in ESF funding, $10.7 million from the INCLE account, $0.75 million in IMET aid, and $4 million in FMF.
On February 17, 2008, Kosovo declared its independence from Serbia. The United States and 22 of the 27 European Union countries have recognized Kosovo's independence. The Kosovo government claims that 98 countries in all have extended diplomatic recognition to it. EULEX, a European Union-led law-and-order mission, is tasked with improving the rule of law in Kosovo. KFOR, a NATO-led peacekeeping force that includes more than 700 U.S. soldiers, has the mission of providing a secure environment.
Serbia strongly objects to Kosovo's declaration of independence. It has used diplomatic means to try to persuade countries to not recognize Kosovo. It has retained parallel governing institutions in Serb-majority areas in Kosovo. Since March 2011, the EU has mediated negotiations between Serbia and Kosovo. The agreements reached include ones on free movement of persons, customs stamps, recognition of university diplomas, cadastre (real estate) records, civil registries (which record births, deaths, marriages, etc. for legal purposes), integrated border/boundary management, and on regional cooperation. However, the accords have not been implemented or only partly implemented.
On April 19, 2013, Kosovo and Serbia reached a key agreement on normalizing relations. The agreement calls for the abolishing of the parallel institutions and the establishment of an "Association/Community" of Serb-majority municipalities within Kosovo, which would function according to Kosovo's laws. Most Kosovo Serb leaders are strongly against the agreement, and its implementation is uncertain.
Kosovo faces other daunting challenges, aside from those posed by its struggle for international recognition and the status of its ethnic minorities. According to reports by the European Commission, the country suffers from weak institutions, including the judiciary and law enforcement. Kosovo has high levels of government corruption and powerful organized crime networks. Many Kosovars are poor and reported unemployment is very high.
The United States has supported the EU-brokered talks between Serbia and Kosovo, but has stressed that it is an observer, not a participant in them. On September 10, 2012, the White House issued a statement by President Obama hailing the end of international supervision of Kosovo. He said Kosovo has made "significant progress" in "building the institutions of a modern, multi-ethnic, inclusive and democratic state." He added Kosovo had more work to do in ensuring that the rights enshrined in the country's constitution are realized for every citizen. President Obama also called on Kosovo to continue to work to resolve outstanding issues with its neighbors, especially Serbia. U.S. officials hailed the April 19, 2013, agreement between Serbia and Kosovo on normalizing relations.
Since U.S. recognition of Kosovo's independence in 2008, congressional action on Kosovo has focused largely on foreign aid appropriations legislation. For FY2013, the Administration requested a total of $57.669 million for Kosovo. Of this amount, $42.544 million is aid for political and economic reforms from the Economic Support Fund, $10.674 million from the International Narcotics Control and Law Enforcement account, $0.7 million in IMET military training aid, $3 million in Foreign Military Financing, and $0.75 million in NADR aid to assist non-proliferation and anti-terrorism efforts. In its FY2014 budget, the Administration aid request for Kosovo includes $41 million in ESF funding, $10.7 million from the INCLE account, $0.75 million in IMET aid, and $4 million in FMF.