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[House Document 107-78]
[From the U.S. Government Publishing Office]

                                     

107th Congress, 1st Session - - - - - - - - - - - - House Document 107-78

 
                  BENCHMARKS FOR A SUSTAINABLE PEACE

                               __________

                                MESSAGE

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

A REPORT ON PROGRESS MADE TOWARD ACHIEVING BENCHMARKS FOR A SUSTAINABLE 
                    PEACE IN BOSNIA AND HERZEGOVINA

    June 5, 2001.--Message and accompanying papers referred to the 
   Committees on International Relations, Appropriations, and Armed 
            Services and ordered to be printed June 5, 2001

To the Congress of the United States:
    As required by the Levin Amendment to the 1998 Supplemental 
Appropriations and Rescissions Act (section 7(b) of Public Law 
105-174) and section 1203(a) of the Strom Thurmond National 
Defense Authorization Act for Fiscal Year 1999 (Public Law 105-
261), I transmit herewith a report on progress made toward 
achieving benchmarks for a sustainable peace process in Bosnia 
and Herzegovina.
    In July 2000, the fourth semiannual report was sent to the 
Congress detailing progress towards achieving the ten 
benchmarks that were adopted by the Peace Implementation 
Council and the North Atlantic Council in order to evaluate 
implementation of the Dayton Accords. This fifth report, which 
also includes supplemental reporting as required by section 
1203(a) of Public Law 105-261, provides an updated assessment 
of progress on the benchmarks covering the period July 1, 2000, 
to February 28, 2001.

                                                    George W. Bush.
    The White House, May 25, 2001.
  Report to Congress on Progress Toward Achieving Benchmarks in Bosnia

    This document is divided into two parts, corresponding to 
two separate Congressional reporting requirements concerning 
SFOR operations and developments in Bosnia and Herzegovina 
(BiH). Part I responds to the requirements of section 7 of 
Public Law 105-174 and outlines the latest developments in our 
continuing efforts to achieve a sustainable peace in BiH. Part 
II responds to the supplementary reporting requirements 
contained in section 1203(a) of the National Defense 
Authorization Act for fiscal 1999. I submit these two reports 
in a single document to afford Congress a broad and 
comprehensive assessment of developments in BiH from July 1, 
2000 to February 28, 2001.

                                 PART I

    Introduction. In July 2000, then President Clinton sent the 
fourth semiannual report to Congress under Public Law (PL) 105-
174, detailing progress towards achieving the ten benchmarks 
adopted by the Peace Implementation Council (PIC) and the North 
Atlantic Council (NAC) for evaluating implementation of the 
General Framework Agreement for Peace in Bosnia and Herzegovina 
(GFAP, or the Dayton Peace Agreement) over the period from 
January 1 through June 30, 2000. This section is an updated 
assessment of progress on the benchmarks for the period from 
July 1, 2000 through February 28, 2001.
    Working with our Allies and Partners, we are making 
gradual, steady progress in helping BiH to achieve political 
viability and economic recovery. The recent coming to power of 
the first-ever non-nationalist government in independent Bosnia 
is a significant step forward in the country's transition to a 
modern, post-war society. In December 2000, the PIC Steering 
Board identified priorities for the next six months for Bosnian 
authorities and the international community (IC). The broad 
goals remain self-sustaining peace, democracy, and economic 
growth in BiH. The PIC's specific focus was on economic reform, 
building state-level institutions, and pressing the fight 
against corruption and organized crime. Continued active 
engagement by the international community is needed to realize 
these objectives. The goal remains to foster circumstances that 
allow the people of BiH to assume stewardship of a lasting 
peace leading to full integration of BiH into the family of 
European democracies.
    The following evaluation provides a detailed account of 
progress achieved over the reporting period under each of the 
ten benchmarks. Basic structures of government now in place are 
slowly extending their reach, and Dayton-mandated central 
institutions function with increased, though still limited, 
effectiveness. A multi-ethnic State Border Service, trained by 
the United Nations, has performed well in limited areas and is 
scheduled to expand operations soon. A small, specially 
trained, multi-ethnic Bosnian police unit remains deployed in 
support of UN operations in East Timor and replacements are in 
training. In the second half of 2000, the international 
community (IC) began intensified action against deep-rooted 
corruption in BiH with mixed results. The IC maintained strong 
support for increased independence of the still-fragile BiH 
police force and judicial system. There remains much room to 
improve these institutions and prepare them to contribute to 
establishing a truly unified, multi-ethnic state. The PIC 
Steering Board stressed in December that newly elected BiH 
authorities would be ``required to meet all standards of a 
modern European state, as enumerated in the Constitution of 
BiH.''
    The November 11 elections produced, after protracted 
negotiations, moderate pro-Dayton governments at the BiH and 
entity levels. However, in Republika Srpska (RS) and the Croat 
majority areas of the Federation, voting patterns indicated 
that some political figures who remain committed to 
ethnocentric, anti-Dayton visions of the future, though 
weakening, continue to command support and resist measures that 
would ensure a European future for a multi-ethnic BiH. Key 
indicted war criminals remain at large, undermining advancement 
toward stability, rule of law, and refugee return. The rate of 
minority refugee returns, while registering continued increases 
in the last half of 2000, remains less than satisfactory. 
Necessary economic and judicial reforms are still pending. 
Determined IC action is still needed to eliminate the influence 
of opponents of the Dayton process.
    A benchmark-by-benchmark analysis of the current situation 
follows:

    1. Military Stability. Aim: Maintain Dayton cease-fire. 
Since the January 1-June 30, 2000, assessment, the military 
security situation in BiH continues to be relatively calm. 
SFOR's strength as of February 28, 2001, is approximately 
20,000 (approximately 19,000 in Bosnia), reduction of more than 
one third compared with December of 1999. The U.S. component 
stands at around 4,4000, approximately 20 percent of SFOR's 
totalstrength. As part of a process, initiated during the last 
Six Month Review of SFOR's Operations Plan (OPLAN) and troop levels and 
conducted in close consultation with the Allies, approximately 750 U.S. 
troops, associated with equipment no longer needed for the mission in 
Bosnia, will be drawn down in the first half of 2001. NATO has 
determined that SFOR is able to carry out all of its key military and 
supporting tasks at current troop levels. Local commanders have learned 
to cover their assigned areas with fewer forces through enhanced 
operational flexibility, which has permitted the restructured force to 
accomplish its mission with undiminished effectiveness. The next 
scheduled review of SFOR's OPLAN and troop levels will take place in 
the spring of 2001.
    Progress continued towards increasing mutual confidence 
between the entity armed forces (EAFs). The IC has made 
progress in planning the restructuring of the EAFs and 
providing BiH with appropriate defense and security 
institutions at the state level. Efforts to further accelerate 
this process will continue. The state-level Standing Committee 
on Military Matters (SCMM), representing the three-member BiH 
presidency, made progress in formulating a common Bosnian 
defense policy as a first step towards creating a state-level 
dimension of defense. The SCMM's permanent secretariat 
continued to develop its role in coordinating actions of the 
EAFs at the policy level. In addition to working on the common 
defense policy, the SCMM secretariat assisted in planning a 
second 15 percent reduction of the EAFs' budgets and military 
personnel at the end of calendar year 2000. The SCMM requires 
more staff, more resources, and greater authority to deal with 
security issues directly, in order to carry out its envisioned 
role as the core of a future BiH defense ministry.

    2. Public Security and Law Enforcement. Aim: A restructured 
and democratic police force in the Federation and Republika 
Srpska. There has been sustained progress in the areas of 
police reform and professionalization. The multi-ethnic State 
Border Service (SBS), which has been operational at the 
Sarajevo airport and three land crossing points, has begun 
expanding to an additional eight land crossing points by May 
2001. The International Police Task Force (IPTF) regards the 
SBS as a key priority and will reassign monitors to cover this 
operation as it grows. Defying political pressures, the SBS has 
upheld Bosnia's commitments relating to border security. In the 
RS, customs and interior ministry officials in two separate 
incidents intercepted large drug shipments (cocaine, heroin, 
and marijuana). In accordance with an existing 
cooperationagreement, both entities continue to allow voluntary 
redeployments of officers across the Inter-Entity Boundary Line (IEBL) 
to enable them to undertake policing functions in their pre-war 
communities. An Inter-Entity Joint Task Force has been established to 
facilitate law enforcement information sharing across the IEBL and an 
interagency task force to combat trafficking in persons has been 
formed. In Mostar, the former FRY police facilities shared by Croat and 
Bosniak police remain ethnically integrated. The first multi-ethnic 
Bosnian Civilian Police (CIVPOL) contingent remains deployed in East 
Timor, and training for rotational replacements has been completed.
    The arrest of a key figure in the BH Banka fraud case led 
to unprecedented cooperation within the Bosnian criminal 
justice system, and groundwork has been laid for continued 
support and development of investigative units to combat 
organized crime and corruption. Internal affairs units are 
increasingly active in upholding professional standards of 
police conduct. At the same time, local police capacity in both 
entities remains limited, and assistance from the international 
community is still needed to fight organized crime, narcotics 
trafficking, ethnic violence, and civil disorder more 
effectively. A series of disturbances in Brcko, related to 
school integration, illustrated the ongoing importance of IPTF 
and SFOR assistance. The IPTF expects to complete all police 
training functions by mid-2001 and will shift more of its focus 
to the co-location program and staffing special units to help 
local police deal with complex problems such as organized crime 
and corruption. Through the co-location program and other 
means, the IPTF continues to conduct intensive audits of local 
police operations, and will vigorously enforce non-compliance 
and decertification policies. The acting Livno canton Interior 
Minister recently was fired for non-compliance with IPTF rules.
    In addition, BiH participates in the Southeast European 
Cooperative Initiative (SECI) regional effort to combat 
transborder crime. BiH signed and ratified the SECI Agreement 
to Cooperate in Combating Trans-Border Crime, along with eleven 
other states in the region (Albania, Bulgaria, Croatia, FRY, 
Macedonia, Greece, Hungary, Moldova, Romania, Slovenia, and 
Turkey). The signatories have established a Center to Combat 
Trans-border Crime in Bucharest, Romania, to exchange 
information and coordinate law enforcement activities of police 
and customs to interdict and bring to justice criminals who 
operate across national boundaries. The Center, which receives 
technical assistance from the U.S. Support for Eastern European 
Democracies (SEED) program, opened in October 2000. BiH 
alsoparticipates in the task forces on trafficking in humans and 
narcotics under the Center's auspices. These task forces bring together 
police and customs officials from eleven countries of the region to 
coordinate national strategies to identify priority targets, share 
information, and build confidence among law enforcement agencies.

    3. Judicial Reform. Aim: An effective judicial reform 
program. Significant judicial reform legislation was adopted by 
the RS parliament in April 2000 and imposed by the Office of 
the High Representative (OHR) in the Federation in May 2000. 
The aim of these entity laws is to de-politicize the 
prosecutorial service by establishing commissions composed of 
serving judges and prosecutors to advise legislators on 
appointments and dismissals. The laws also provide that the 
commissions will review all sitting judges and prosecutors over 
a period of 18 months. The United Nations' Judicial System 
Assessment Program has completed its work. The Independent 
Judicial Commission (IJC), the follow-on program focussed on 
reform implementation, is being established within OHR. The IJC 
will monitor and, if necessary, intervene in the work of the 
entity commissions. The IJC will focus international assistance 
on judicial reform initiatives, assist in the identification 
and design of specific non-governmental organization 
development programs, and support domestic judicial training 
organizations.
    In July the Constitutional Court ruled on the ``Constituent 
Peoples'' case, striking down provisions in entity-level 
constitutions that were deemed to be inconsistent with the BiH 
constitution. Newly elected parliaments will be expected to 
amend their constitutions in 2001. In November, the High 
Representative imposed a law establishing a State Court with 
jurisdiction over State-level administrative matters and 
certain criminal law matters. This law strengthens the judicial 
system at the state level and is vital for foreign investors, 
who are reluctant to put money into a country with no 
institution to settle legal disputes related to foreign trade. 
The State Court, once it begins to function, will be such an 
institution.
    Additional effort is needed to ensure implementation of 
these new structures and real independence (political and 
financial) of the judiciary. Successful execution of judicial 
reforms is critical to establishing the rule of law and the 
confidence of all Bosnia's citizens, regardless of ethnicity, 
in the domestic court system.

    4. Illegal Institutions, Organized Crime, and Corruption. 
Aim: The dissolution of illegal pre-Dayton institutions. 
Several important steps were taken by Bosnian and international 
officials, but much more remains to be done. Temporary Duty 
U.S. FBI agents have assisted IPTF and local authorities in the 
investigation of major organized crime/corruption cases. In 
coordination with OHR's Anti-Fraud Unit (AFU), the U.S. 
Treasury's Office of Technical Assistance began working in 
January 2001 to improve the investigative skills of the 
Financial Police in dealing with large-scale financial crime.
    A major source of corruption and financial crime has been 
the communist-era payments bureaus. The payment bureaus closed 
in January 2001 and an increasingly visible commercial banking 
system will be established in their place. The Central Bank 
will clear all transactions of 20,000 KM ($10,000) and higher, 
a standard threshold amount for money laundering.
    A joint ask force composed of various Federation law 
enforcement agencies, with the support of the IC, including the 
FBI, has pursued the BH Banka case aggressively. (See Benchmark 
2). The investigation phase has been completed, and prosecution 
is underway. This is the first high-profile fraud case to go to 
trail in Bosnia, and the IC wants to ensure that it has impact. 
One primary suspect is in Bosnia awaiting trial.
    U.S. support to the AFU includes $1.0 million for 
additional auditors, prosecutors, and investigators, and for 
conducting investigations. The United States also increased 
assistance to police, prosecutors, judges and other legal 
professionals in fighting corruption, particularly in the 
banking sector in 2000.
    BiH also participates in the regional SECI/World Bank Trade 
and Transportation Facilitation Program. Under this program, 
the World Bank will provide a loan to develop the 
infrastructure and physical plant at border crossings, and the 
United States will provide technical assistance to improve the 
management and professionalism of the Customs Service and 
reduce corruption. Discussions with the World Bank were 
initiated in 2000, and the loan package is expected to be 
completed and approved by the World Bank's Board in the first 
half of 2001. BiH participates in the Regional Steering 
Committee which meets on a regular basis to standardize 
cooperation among Southeast European customs services, to share 
best practices, and to bring them into line with European Union 
standards.

    5. Media Reform. Aim: Politically independent media and an 
apolitical telecommunications regulatory authority. Progress in 
the course of the reporting period has been notable. The 
Independent Media Commission (IMC), in line with newly adopted 
guidelines for equitable access to media, closely monitored a 
large number of broadcasters during the general election 
campaign. The IMC assessed that broadcasters generally abided 
by rules governing broadcasting during the general election 
period and noted that the number of complaints was 
significantly reduced from previous elections. The IMC 
suspended one broadcaster's license for 30 days, fined three 
others, and warned another broadcaster over violations of IMC 
rules. The IMC noted that broadcasters increasingly turn to IMC 
and the Organization for Security and Cooperation in Europe 
(OSCE) for support in resisting political pressure related to 
the content of news broadcasts and political programming. In 
October, the IMC published a white paper on ``Media and 
Democratization'' in BiH, which analyzed the development of the 
media framework in BiH and assessed the largely successful 
efforts to reduce dramatically nationalist party control over 
media and improve media pluralism.
    Despite these positive steps, pressures persist, including 
political pressure on media outlets. In early summer, 
Federation authorities used tax police in an effort to 
intimidate the largest circulation daily newspaper in BiH. An 
international outcry forced the removal of the head of the 
Federation Tax Police and the strengthening of media freedom 
prior to the November general elections. The international 
community will continue to defend vigorously media freedoms, 
while at the same time continuing to insist on adherence to 
licensing regulations and professional standards of conduct in 
journalism. U.S. assistance programs help journalists meet 
those expectation and understand why they are important, but 
much remains to be done.

    6. Elections and Democratic Governance. Aim: National 
democratic institutions and practices. Development of stronger 
central institutions continues to be of paramount importance. 
At the State level, all Dayton-mandated central institutions 
meet regularly, but their effectiveness must be enhanced. 
Following the November 1999 New York Declaration by the Joint 
Presidents, a joint secretariat for the Presidency was created, 
and efforts are underway to increase funding for the under-
funded State ministries. Under a law adopted by the State 
Parliament, the number of ministries was increased from three 
to six. BiH authorities have committed to issuing a 
commonpassport and establishment of a central passport registry, though 
implementation still suffers delays. With its deployment June 6, the 
State Border Service (Benchmark 2) became the first multi-ethnic armed 
force under central government control. There is still resistance from 
the entities, particularly from the Serb side, to vesting state-level 
institutions with real power, as they view increased state power as an 
infringement on entity prerogatives. Nonetheless, progress is being 
made on creating meaningful central institutions. Within the 
Federation, the threat of veto by one group under the Vital Interest 
Clause renders the legislative process slow and often ineffective. 
Resistance by the nationalist Croat Democratic Union (HDZ) has made 
government formation more difficult.
    General elections took place November 11, 2000, under OSCE 
supervision. The OSCE ran the elections because the BiH 
Parliament has thus far rejected an OSCE-drafted election law, 
despite international pressure. Once an election law is in 
place, Bosnian authorities would take over responsibility for 
conducting elections. In November, voters selected members of 
the State parliament, parliamentary bodies in both entities, 
cantonal assemblies in the Federation, and the RS presidency. 
These elections were free and fair, resulting in overall 
increases for more moderate parties in the Federation and RS. 
However, nationalist parties retain significant strength, and 
the nationalist Serbian Democratic Party (SDS) candidate Mirko 
Sarovic won the presidency in the RS. He appointed as his prime 
minister a relative moderate, Mladen Ivanic, who has sought to 
limit hard-line influence in his cabinet of ministers.

    7. Economic Development. Aim: Free-market reform. The 
greatest progress in the economic reform area was in the 
financial sector, and included bank privatization, the closing 
of the payment bureaus, and the introduction of deposit 
insurance in the Federation. There has also been considerable 
progress in privatization, with the first tenders for a 
strategic list of 138 companies already concluded, and all but 
a few scheduled for the summer and fall of 2001. Voucher 
privatizations for the remaining large and mid-sized companies 
are underway. There are problems with both the tender and 
voucher processes, but, importantly, these companies are being 
pried from government control.
    Key pension and labor law reforms were made at the end of 
2000, although primarily through OHR imposition. Also, 
government auditors and treasuries are finally being 
established to control government spending and reduce 
corruption moreeffectively. Securities exchanges are being 
established in 2001 and will start trading in companies when the 
voucher process is complete. An international group is coordinating tax 
reform policies, and, if new entity governments are cooperative, there 
should be substantial progress in both rationalization and collection 
this year.
    The banking sector in the Federation has strengthened 
significantly and the role of private sector banks has 
increased. Several prime-rated foreign banks entered the market 
in the second half of 2000. The state-owned banks in both 
entities have prepared privatization plans, and the first 
should be privatized soon. Under recent legislation, the 
banking agencies in both entities are taking a more active role 
in sanctioning banks that violate the law and regulations. OHR 
had to impose immunity legislation for their staff, and this 
will further de-politicize the banking sector. A single state-
level deposit insurance agency will likely be established in 
2001.
    Significant challenges remain, many of which have been 
unreasonably delayed. The power and telecommunications 
industries have to be privatized; those processes are just now 
starting. There has been little reform of the commercial code 
or of the commercial courts. Government procurement practices 
are still not transparent. There has been little infrastructure 
development beyond repairs of war damage, and some elements, 
such as railroads, are still moribund due to ethnic divisions. 
The IMF's stand-by agreement has dragged on for more than a 
year beyond its scheduled closing date. As a result, foreign 
investment is still almost non-existent, and regional 
integration is lagging.

    8. Displaced Person and Refugee (DPRE) Returns. Aim: A 
functioning and orderly minority return process. This period 
has seen a significant increase in DPRE returns to pre-war 
homes. Minority returns to some of the previously most hostile 
regions in the RS have taken place and appear to be gaining 
momentum. Only occasionally have majority groups in the RS 
publicly resisted returnees, and even these demonstrations were 
largely orchestrated rather than spontaneous.
    The United Nations High Commission for Refugees (UNHCR) 
reports that in 2000, 67,445 registered minority returns took 
place, compared to 42,200 for 1999, an increase of 57 percent. 
Only anecdotal information is available regarding spontaneous 
(unregistered) returns, but they were likely in excess of 
50,000. The great majority of these returns, however, 
continueto be to outlying, destroyed, rural villages, where individuals 
take advantage of improved security conditions provided by SFOR to 
begin rebuilding while awaiting international assistance. Lack of 
assistance funds for shelter repair is the greatest obstacle to 
sustaining these returns.
    Returns of minorities to urban areas, particularly the 
larger towns, continue to lag behind those to villages. One 
reason for the relatively slow pace of returns to cities has 
been the inefficiency (and often obstructionism) of local 
officials in resolving property claims, as well as the related 
reluctance of local authorities to evict illegal occupants. 
Officials in the RS and in hardline Croat majority areas, in 
particular, commonly obstruct evictions and minority 
reinstatements. To address this problem, OHR initiated a 
Property Legislation Implementation Plan late in 1999 as a 
follow-up to the package of amendments to property laws imposed 
on both entities by the High Representatives.
    Security is no longer the primary concern of most 
returnees, with the possible exception of those in some 
hardline regions in the RS. According to a USAID-sponsored 
study, while security and shelter remain the greatest needs for 
sustainable returns, other important factors were cited by 
returnees, including employment, education, and infrastructure 
issues (power, water, health facilities, and transportation).

    9. Brcko. Aim: Implementation of the Brcko Final Award. 
Retired U.S. diplomat Gary Matthews assumed office as Brcko 
District Supervisor on May 26, 2000. (Matthews became Principal 
Deputy Special Representative of the Secretary General of the 
UN in Kosovo in early 2001.) The period since has been 
completion in September of a Framework Agreement with the 
Federation and the Republika Srpska on entity obligations to 
Brcko. This agreement was followed in October by Implementation 
Agreements on entity obligations, including on pensions, on 
health care, and on refugees, displaced people, and 
reconstruction. Refugee returns to Brcko have increased, 
indicating growing confidence in the District's future. The 
October reopening of the Sava River bridge linking Brcko with 
Croatia should encourage trade and provide a badly needed 
source of income for the District. Matthews, others in the IC, 
and the District government have taken much-needed steps to 
regularize the notorious Arizona Market, which, after 
relocation, also will be a revenue source. Trouble erupted 
between Serb and Bosniak students in mid-October following 
implementation of the Supervisor's plan to share limited school 
space. (Benchmark 2) Fast and thorough actionby the Supervisor 
and multi-ethnic education authorities and police allowed the 
integrated schools to reopen November 29 without incident, indeed wth 
more students in attendance than in October. The Brcko Law Revision 
Commission has made considerable progress. Brcko residents are 
beginning to identify with their city as well as with their ethnic 
groups.

    10. Persons Indicted For War Crimes (PIFWCs). Aim: 
Cooperation with the International Criminal Tribunal for the 
former Yugoslavia (ICTY) leading to the transfer of PIFWCs to 
The Hague for trial. As of the end of January 2001, 50 PIFWCs 
have been transferred to The Hague for trial under open and 
sealed indictments. Acting within its mandate, SFOR has 
assisted in the transfer of indictees to The Hague and 
continues to support ICTY field investigations in Bosnia. PIFWC 
Janko Janjic died while resisting detention by SFOR units on 
October 12. Cooperation from the parties, who are responsible 
for apprehending and turning over PIFWCs to ICTY, continues to 
vary widely. In particular, Bosnian Serb extremists continue to 
oppose action against PIFWCs in the RS.
    The United States continues to consider the apprehension 
and detention of PIFWCs Radovan Karadzic and Ratko Mladic to be 
a high priority in serving the interest of justice and 
facilitating Dayton implementation. Their success in avoiding 
apprehension sustains Bosnian Serb extremism, inhibits the 
establishment of trust among ethnic communities, undermines the 
credibility of the IC, and erodes the rule of law.
    Conslusion. This reporting period continued a positive 
trend. The level of support by Serb and Croat voters for hard-
line ``nationalist'' parties in the November elections remains 
a matter of concern. However, this did not halt progress in 
other areas of civil implementation. Multi-ethnic police forces 
continue to be trained and deployed. Aggressive auditing and 
closure of the payments bureaus will weaken party links to key 
sectors of the economy. The democratic change of government in 
Belgrade, together with the continued successful consolidation 
of democratic rule in Croatia, weakened substantially the 
negative external influences on domestic BiH politics.
    Progress on security and civil implementation has helped 
SFOR consolidate its force requirements at a substantially 
lower level than a year ago. The Administration will continue 
to use NATO's process of Six Month Reviews to determine 
opportunities for additional reductions and the early 
transition of SFOR to a deterrent-based mission.

                                PART II

    Section 1203(a) of the fiscal 1999 National Defense 
Authorization Act requires submission of a semiannual report to 
Congress as long as U.S. ground combat forces continue to 
participate in the Stabilization Force (SFOR). This report is 
reflective of events that occurred from July 1, 2000 through 
February 28, 2001. Events subsequent to February 28, 2001 will 
be addressed in the July semi-annual report. This report 
supplements the ``Bosnia Benchmarks'' report required by Public 
Law 105-174 and is therefore submitted here in conjunction with 
that report. When possible, where requirements overlap, an 
effort has been made to avoid duplication in the two reports. 
The numbered responses that follow correspond to specific 
numbered reporting requirements contained in section 1203(b).

    1. Expected duration of U.S. forces in Bosnia and 
Herzegovina. NATO has not established an end date for SFOR, but 
uses a process of Six Month Reviews to monitor the force size 
and mission. As of February 28, 2001, SFOR totals about 20,000 
troops, less than two-thirds the number in December 1999. 
Utilizing enhanced operational flexibility, SFOR has continued 
to fulfill its key military and supporting tasks. (Part I, 
Benchmark 1)
    Ongoing reevaluations of required force structure have led 
to significant reduction of the U.S. footprint from a high of 
approximately 20,000 in 1996 to the current level of 
approximately 4,400. As noted in Part I, Benchmark 1, 
approximately 750 additional troops will be drawn down 
beginning in the first half of 2001 as a result of the last 
SFOR Six Month Review of the SFOR OPLAN and troop levels 
conducted in close consultation with Allies.

    2. Percentage of benchmarks completed. No benchmark has 
been totally fulfilled to date, although in some security areas 
we are approaching completion. Substantial progress has been 
recorded in other areas, particularly Brcko, but completing the 
benchmarks will require time and continued commitment, as 
described fully in Part I of this report.

    3. Status of the NATO ``force of gendarmes.'' The 
Multinational Specialized Unit (MSU) continues to be an 
essential component of SFOR, which provides unique capabilities 
in information gathering and crowd control. The MSU carries out 
liaison with the International Police Task Force and 
localpolice. It deters disruptive civil behavior by demonstrating that 
SFOR can deal effectively with outbreaks and by maintaining a police-
like professional presence throughout BiH that is less confrontational 
than a military response. These qualities, combined with the MSU's 
continuous patrolling and cooperation with local police and community 
leaders, help to foster an atmosphere of security and rule of law. 
There are about 380 mostly Italian troops assigned to the MSU in 
Bosnia. They operate under an Italian Carabinieri Commander, who 
oversees certification of specialized units from other contributing 
countries. As a part of SFOR's restructuring completed this past 
spring, the MSU was to have gained a second battalion, but no nation to 
date has been prepared to contribute sufficient numbers of personnel 
properly trained for this task.

    4. Military and non-military missions directed by the 
President for U.S. forces in BiH.--The United States Government 
supported the decision of the North Atlantic Council to task 
the Commissioner of the Stabilization Force (COMSFOR), through 
SACEUR, with the mission of providing a continuing military 
presence in order to deter renewed hostilities, contribute to a 
secure environment, and help stabilize the peace in BiH. The 
tasks outlined below were identified for NATO forces deployed 
to BiH.
    Key military tasks:

 Maintain a deterrent military presence.
 Ensure continued compliance with the military aspects 
        of the GFAP.
 Operate Joint Military Commissions at appropriate 
        levels.
 Contribute, within means and capabilities, to a secure 
        environment, in which the international civil 
        organizations and the parties to the GFAP can carry out 
        their responsibilities under the agreement.
 Ensure force protection and freedom of movement for 
        SFOR.
 Monitor Entity Armed Forces activities and inspect 
        Weapons Storage sites, within capabilities and in close 
        co-ordination with relevant international 
        organizations.
 Be prepared to coordinate turnover of responsibility 
        for Airspace Management/Control to the BiH Department 
        of Civil Aviation when directed. (Section 4(D)

    Key supporting tasks, within the means and capabilities of 
SFOR:

 Provide support on a case-by-case basis to the Office 
        of the High Representative in implementing the civil 
        aspects of the GFAP.
 Support implementation of the Brcko Arbitration Award.
 Support the conduct of elections and installation of 
        elected officials.
 Support the return of displaced persons and refugees 
        by contributing to a safe and secure environment but 
        not forcibly returning them or undertaking to guard 
        individual locations.
 Support the International Criminal Tribunal for the 
        Former Yugoslavia and efforts against persons indicted 
        for war crimes.
 Selectively support the OHR and International Police 
        Task Force in assisting local police, providing back-
        up, and contributing to a secure operating environment, 
        without undertaking civil police tasks.
 Provide on a case-by-case basis selective support to 
        the OSCE, if requested, in implementing Annex 1B 
        (Agreement on Regional Stabilization) of the GFAP in 
        BiH.
 Support the continued development of the Standing 
        Committee on Military Matters.

    With regard to specific issues raised under reporting 
requirement 4:
    (A) Persons Indicted for War Crimes: Primary responsibility 
for the apprehension and transportation of PIFWCs lies with the 
parties. By the end of 2000, SFOR had detained 33 indictees 
without support from the parties. Additionally, SFOR continues 
to support, as necessary and within means and capabilities, the 
ICTY in the exhumation of war crime sites. (Part I, Benchmark 
10).
    (B) Support to civilian police functions: As long as 
organized opposition to Dayton continues, the OHR, UN, and 
other international organizations involved in civil 
implementation will rely on SFOR to contribute to a secure 
environment an to provide back-up in the case of civil unrest 
provoked by Dayton opponents. Our objective is to transition 
responsibilities for public security to the MSU in SFOR, 
international police, and ultimately local institutions. (also 
Part I, Benchmarks 2, 3, 4).
    (C) Resettlement and return of refugees: During this 
reporting period, SFOR continued close cooperation with the OHR 
and UNHCR to encourage returns. Returns of minorities 
accelerated during the summer. UNHCR assesses that over three-
quarters of the 1.2 million wartime refugees and more than one-
fifth of the 1 million displaced persons have now returned to 
their homes or resettled. However, this increase in returns is 
also an area of increased tension, as evictions and the 
resettlement process force internally displaced persons from 
homes they have occupied illegally. SFOR focuses on advanced 
planning, enhanced information exchange to identify hot spots, 
and maintaining a secure environment to minimize any efforts to 
intimidate returnees. (Part I, Benchmark 8)
    (D) Support to local and international authorities: 
          Elections. SFOR continued to provide wide-area 
        security during recent parliamentary and RS 
        presidential elections, although this requirement is 
        significantly reduced from previous reports due to the 
        improved security environment. Reports of violence and 
        opposition to elections were few, and SFOR's presence 
        proved essential to a fair campaign and vote. (Part I, 
        Benchmark 6)
          Crime and Corruption. Crime and corruption remain 
        perhaps the most significant threats to the secure 
        environment in BiH, impeding progress in civil 
        implementation of the GFAP. There is still significant 
        political influence on police, prosecutors, and judges, 
        and links between organized crime and the local 
        officials remain. Civilian authorities have achieved 
        only limited progress in developing an effective legal 
        framework and comprehensive strategy to address these 
        problems. SFOR continues to support United Nations 
        Mission in Bosnia and Herzegovina and OHR efforts to 
        develop a State Border Service, which began operations 
        earlier this year. (Part I, Benchmarks 2, 3, 4)
          Brcko. Since the final Brcko Arbitration Award in 
        March 1999, the Brcko District has been completely 
        demilitarized with the full cooperation of the EAF. 
        (Part I, Benchmark 9)
          Airspace Control. In January 2000, SFOR returned to 
        Bosnian authorities control of the BiH upper airspace, 
        which NATO had controlled, as provided for in the GFAP, 
        since initial implementation of the Intervention Force 
        (IFOR). SFOR is currently working with local 
        authorities to develop a state-level approach to other 
        civil aviation issues, including management of the 
        airport in Sarajevo.

    5. Assessment of threats to the United States forces: The 
security situation in BiH remains stable. The Entity Armed 
Forces (EAFs) generally comply with the GFAP and cooperate with 
SFOR, so maintenance of public order is normally not a problem. 
Despite an increase in refugee returns, actions against PIFWCs, 
and BiH-wide elections, the situation remains generally 
peaceful. As part of an initiative to reduce the EAFs to a size 
and budget commensurate with Bosnia's population and financial 
capabilities, a second 15 percent force reduction is scheduled 
to be completed in early 2001. Additionally, SFOR is involved 
in a multi-year plan to develop a single, state-level Bosnian 
army with a unified command and control structure. Cooperation 
between the RS Army and Federation Army on civil projects and 
demining continues to improve. (Part I, Benchmark 1)
    BiH authorities, civil and military, have yet to develop 
fully the legitimate, responsible, accountable state 
institutions necessary to achieve the ultimate goal of self-
sustaining peace. However, the latest Supreme Headquarters 
Allied Powers Europe and SFOR estimates view the likelihood of 
an internal military threat as remote. There has also been 
significant improvement in the external security situation of 
BiH, due to recent democratic political change in the FRY and 
Croatia. The impact of these democratic changes is not yet 
clear, and their effect on Bosnia remains to be seen.

    6. Assessment of costs: Since fiscal 1996, the projected 
cost to the Department of Defense of the military missions that 
the President directed in BiH has been about $11.2 billion. 
Costs are summarized below (in millions):

                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                 FY 2001
                   Operation                      Pres.     FY 2000    FY 1999    FY 1998    FY 1997    FY 1996
                                                  Budget     Actual     Actual     Actual     Actual     Actual
----------------------------------------------------------------------------------------------------------------
Joint Forge/Guard/SFOR/IFOR...................    1,255.6    1,381.8    1,431.2    1,792.8    2,087.5    2,241.0
Deliberate Forge/Deny Flight..................      153.0      101.3      141.4      159.4      183.3      225.9
Task Force Saber/Able Sentry..................  .........  .........       14.0       10.5       11.7       30.9
UNCRO/Provi de Promise........................  .........  .........  .........  .........  .........       22.2
                                               -----------------------------------------------------------------
      Total...................................    1,408.6    1,483.1    1,586.6    1,962.7    2,282.5    2,520.0
----------------------------------------------------------------------------------------------------------------

    Operation Deliberate Forge (follow-on to Deny Flight, 
Decisive Edge, and Deliberate Guard) involves air operations 
for maintaining the no-fly zone over Bosnia.
    Operation Joint Forge (follow-on to IFOR, SFOR, Deliberate 
Force, Joint Endeavor, and Joint Guard) is the NATO operation 
to deter the resumption of hostilities and to contribute to a 
secure environment that promotes the reestablishment of civil 
authority in BiH. Operations finances include continued support 
of a U.S. Division headquarters by a U.S. Brigade Combat Team 
Task Force with a force capacity of approximately 6,200 in 
Bosnia, reduced to below 4,600 in April 2000, support of 
approximately 600 enabling soldiers in adjacent countries 
(RIM), five base camps reduced to four in the fourth quarter of 
fiscal 2000, and two troop rotations per year.
    IFOR Preparation and IFOR included the costs of preparing 
U.S. troops for deployment to IFOR, which was the peace 
implementation force in the FRY.
    Operation Provide Promise was the military operation that 
airlifted and airdropped humanitarian supplies into Bosnia.
    Operation Sharp Guard enforced the United Nations-
sanctioned embargo against the FRY (excluding the enforcement 
of the arms embargo against Bosnia) conducted in conjunction 
with Western European Union forces.
    Task Force Able Sentry was U.S. participation in the United 
Nations preventive deployment along the Serbian/Macedonian 
border (UNPREDEP).
    United Nations Mission to Croatia was support provided to 
the Zagreb hospital in support of the United Nations in 
Croatia.

    7. Status of future operation plans: As these two reports 
indicate, there has been a continued, gradual improvement in 
all aspects of civil implementation and in the security 
situation in Bosnia during the reporting period. The EAFs have 
been cooperative, and implementation of the final Brcko 
arbitration decision has been generally peaceful. The November 
election campaign and vote were free, fair, and generally free 
of violence. Increasing flows of returning refugees and 
internally displaced persons continue. To the extent that 
Bosnia slowly moves toward normalcy and as its leaders and 
citizens take on greater responsibility for implementing all 
aspects of the agreement, the requirement for NATO's presence 
should diminish. The threat of a resumption of hostilities by 
the EAFs remains low. In accordance with OPLAN 10407, NATO will 
continue to evaluate its presence and the forces required based 
on these elements.
    In conclusion, the Administration seeks a stable and 
peaceful Southeastern Europe that is part of a Europe whole, 
free, and at peace. Implementing the Dayton Peace Accords in 
Bosnia is part of our overall regional strategy. The United 
States remains committed to working with our NATO allies and 
the European Union to achieving this aim, while shifting an 
increasing share of the responsibilities and the burden to 
Europe and the region.

                                
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