EUROPEAN COMMISSION Strasbourg, 19.10.2021 SWD(2021) 291 final /2 COMMISSION STAFF WORKING DOCUMENT Bosnia and Herzegovina 2021 Report Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions



2021 Communication on EU Enlargement Policy {COM(2021) 644 final} - {SWD(2021) 288 final} - {SWD(2021) 289 final} - {SWD(2021) 290 final} - {SWD(2021) 292 final} - {SWD(2021) 293 final} - {SWD(2021) 294 final}



Table of Contents 1. Introduction 1.1. Context 1.2. Summary of the report 2. Cluster 1: The Fundamentals of the Accession Process 2.1. Functioning of democratic institutions and Public Administration Reform 2.1.1 Democracy 2.1.2. Public Administration Reform 2.2. Rule of law and fundamental rights 2.2.1 Chapter 23: Judiciary and fundamental rights 2.2.2 Chapter 24: Justice, freedom and security 2.3. Economic criteria 2.3.1. The existence of a functioning market economy 2.4. Public Procurement, Statistics; Financial control Chapter 5 - Public procurement Chapter 18 - Statistics Chapter 32 - Financial control 3. Good neighbourly relations and regional cooperation 4. Ability to assume the obligations of membership

Cluster 2: Internal Market Chapter 1 - Free movement of goods Chapter 2 - Freedom of movements for workers Chapter 3 - Right of establishment and freedom to provide services Chapter 4: Free movement of capital Chapter 6 - Company law Chapter 7 - Intellectual property law Chapter 8 - Competition policy Chapter 9 - Financial services Chapter 28 - Consumer and health protection Cluster 3: Competitiveness and inclusive growth Chapter 10 - Information society and media Chapter 16 - Taxation Chapter 17 - Economic and monetary policy Chapter 19 - Social policy and employment Chapter 20 - Enterprise and industrial policy Chapter 25 - Science and research Chapter 26 - Education and culture Chapter 29 - Customs union Cluster 4: The Green agenda and sustainable connectivity

Chapter 14 - Transport policy Chapter 15 - Energy Chapter 21 - Trans-European Networks Chapter 27 - Environment and climate change Cluster 5: Resources, agriculture and cohesion Chapter 11 - Agriculture and rural development Chapter 12 - Food safety, veterinary and phytosanitary policy Chapter 13: Fisheries Chapter 22 - Regional policy & coordination of structural instruments Chapter 33 - Financial & budgetary provisions Cluster 6: External relations Chapter 30 - External relations Chapter 31 - Foreign, security & defence policy Annex I – Relations between the EU and Bosnia and Herzegovina



1. Introduction 1.1.Context Following its application for EU membership in February 2016, Bosnia and Herzegovina has to fulfil the 14 key priorities from the May 2019 Commission Opinion, which covers the areas of democracy/functionality, the rule of law, fundamental rights, and public administration reform. This is required for the Commission to recommend the opening of EU accession negotiations with Bosnia and Herzegovina. On the basis of the December 2019 conclusions of the EU Council, the Commission focuses its annual reports on Bosnia and Herzegovina on the implementation of the Opinion’s key priorities. Bosnia and Herzegovina continues to implement the Stabilisation and Association Agreement (SAA) and the joint bodies established under the agreement meet regularly. The SAA and its Interim Agreement, applied since 2008, have allowed progressive trade liberalisation and mutual duty-free access for most goods. In 2020, the EU remained Bosnia and Herzegovina’s main trading partner, accounting for 65% of the country’s total trade in goods, although with a 10.2% decrease due to the pandemic. In 2020, total trade was worth EUR 9.6 billion, while the country’s trade deficit with the EU amounted to EUR 1.5 billion.

The public political commitment of the authorities at all levels of government to the strategic goal of European integration has not been turned into concrete action, as political leaders continued to engage in divisive rhetoric and unconstructive political disputes, which have hindered progress on the 14 key priorities so far. Still, some significant steps have been taken, amid the pandemic, to address the key priorities from the Opinion. In particular, municipal elections were held in Mostar in December 2020, for the first time since 2008, fulfilling part of key priority 1. The Stabilisation and Association Parliamentary Committee was held in June 2021, after a five-year stalemate, marking good progress on key priority 3. An inter-agency working group was established in May 2021, to discuss constitutional and electoral reforms required to address key priorities 1 and 4. All levels of government also adopted the action plan on public administration reform and strategies on public financial management, contributing to key priority 14. Bosnia and Herzegovina needs to move forward on all other key priorities. The COVID-19 pandemic continued throughout the reporting period. By end September 2021, the country had recorded 227,579 cases and 10,606 deaths related to the pandemic. The Commission redirected EUR 80.5 million in grants for immediate needs and the socio-economic response to the pandemic. The Commission also secured macro-financial assistance of EUR 250 million in very favourable loans, which was ratified by Bosnia and Herzegovina in June 2021. Bosnia and Herzegovina does not have a countrywide vaccine strategy, and the entities have proceeded with their own separate vaccine procurement. Together with the donation of medical equipment, the continued delivery of EU-funded vaccines is a sign of concrete EU solidarity. Bosnia and Herzegovina received 214,110 Pfizer/BioNTech doses from the EU between May and August 2021, facilitated by Austria and funded by the EU4Health grant. COVAX also delivered over 332,640 doses to Bosnia and Herzegovina by end August 2021. Overall, the EU and its Member States provided over 1.3 million vaccine doses by September 2021. By end September 2021, around 13% of the population had been fully vaccinated. 1.2.Summary of the report Regarding the political criteria, legislative and executive authorities had a low output due to political polarisation and the disruption caused by pandemic. The Federation entity government is still acting in a caretaker role. Bosnia and Herzegovina’s Constitution remains in breach of the European Convention on Human Rights (ECHR), following the Sejdić-Finci and related cases. An inter-agency working group is expected to discuss electoral and constitutional reforms, was established in May 2021. Municipal elections were held in Mostar in December 2020, for the first time since 2008. The Stabilisation and Association Parliamentary Committee met and adopted its rules of procedures in June 2021, following a five-year stalemate. Inclusive process of electoral reform, through genuine dialogue and in line with European standards that would eliminate all forms of inequality and discrimination in the electoral process, is paramount. No progress was made in improving the electoral framework in line with European standards and ensuring transparency of political party financing. Bosnia and Herzegovina has yet to address the recommendations by the Office for Democratic Institutions and Human Rights of the Organisation for Security and Cooperation in Europe (OSCE/ODIHR), the Venice Commission and the Council of Europe’s Group of States against Corruption (GRECO). A number of Constitutional Court decisions have yet to be fully enforced. The development of a national programme for the adoption of the EU acquis is still pending. Limited progress was made in ensuring an enabling environment for civil society. Bosnia and Herzegovina is at an early stage of preparation with public administration reform (PAR); some progress was made by adopting the action plan on public administration reform as well as strategies on public financial management at all levels of government. The country needs to ensure a professional and depoliticised civil service and a coordinated countrywide approach to policy-making. Bosnia and Herzegovina is at an early stage/has some level of preparation as regards its judiciary. No progress was made in this area over the reporting period. The authorities have taken limited action to address the findings of the Expert Report on Rule of Law issues (‘Priebe report’). Integrity amendments are due to enter in parliamentary procedure; their adoption is key to establish a credible and rigorous system of verification of financial statements of judicial office holders. Persistent and evident signs of deterioration continue to require urgent measures to strengthen the integrity of and regain citizens’ trust in the judiciary. Lack of commitment to judicial reform from political actors, and the poor functioning of the judicial system continued to undermine the citizens’ enjoyment of rights and the fight against corruption and organised crime. Bosnia and Herzegovina is at an early stage/has some level of preparation in the prevention and fight against corruption and organised crime. No progress was made in this area over the reporting period; urgent action is required to adopt the pending legislation on public procurement and conflict of interest. During the pandemic, the negative effects of widespread corruption and signs of political capture continued to manifest strongly during the pandemic, directly affecting the wellbeing of citizens. The selective and non-transparent prosecution and judicial follow-up of corruption cases is a cause of concern. There are systemic shortcomings in the operational cooperation among law enforcement agencies and a very limited exchange of intelligence. The police are vulnerable to political interference. Financial investigations and asset seizures are largely ineffective. Although some preparatory steps were taken, the contact point for cooperation with Europol is not yet operational. Bosnia and Herzegovina has not taken any steps to establish cooperation with Eurojust. The country needs to continue its efforts in the fight against terrorism and drug trafficking and increase its capacity to do so. As regards fundamental rights, while the legislative and institutional framework is largely in place, Bosnia and Herzegovina has yet to adopt a comprehensive strategic framework. Significant reforms are needed to ensure that all citizens are able to exercise their political rights and to ensure non-discriminatory, inclusive and quality education for all, including by overcoming the practice of ‘two schools under one roof’. No progress was made on guaranteeing freedom of expression and of the media, on protecting journalists against threats and violence by ensuring an appropriate judicial follow-up, nor on ensuring the financial sustainability of the public broadcasting system. Challenges persist as regards the freedom of assembly, particularly in the Republika Srpska entity, where activists have been subjected to intimidation and judicial prosecution. The failure of the authorities to establish a sustainable migration and asylum system led to a humanitarian crisis in December 2020. Following extensive EU engagement and support, a temporary tent camp was established in Lipa to provide shelter to all persons in need. A permanent multi-purpose reception centre is being built in Lipa in the course of 2021. Bosnia and Herzegovina has stepped up efforts to improve migration management; it needs to ensure effective coordination, at all levels, of border management and migration management capacity, as well as the functioning of the asylum system. This requires a fair distribution of responsibilities among all entities and cantons, including in the hosting of reception centres. As regards the economic criteria, Bosnia and Herzegovina has made limited progress and is at an early stage of establishing a functioning market economy. The country took measures to counter the negative effects of the COVID-19 pandemic on the economy and the labour market. The Central Bank undertook significant measures to improve its analytical capacities. Some steps were taken to strengthen the financial sector’s shock resilience. However, there have been no significant measures to improve the functioning of the product markets. Cooperation and coordination among the country’s stakeholders has further deteriorated. Resistance from the Republika Srpska entity against EU acquis-related country-wide reforms has further slowed down the country’s compliance with the EU accession criteria. As a result, the country’s institutional set-up as well as its internal market remains fragmented. No improvement has been reached with respect to the rule of law and the functioning of country-wide supervisory and regulatory institutions. This continues to impede the country’s business environment. The quality of public spending has not improved, while the public sector has remained inefficient and oversized. Bosnia and Herzegovina has made limited progress, and remains at an early stage in terms of capacity to cope with competitive pressure and market forces in the EU. The overall quality level of education has remained low, while measures to improve the transport and energy infrastructure have remained insufficient. The extent of structural adjustment has been limited. Bosnia and Herzegovina is overall at an early stage/has some level of preparation regarding its level of preparedness and ability to take on the obligations of EU membership and needs to significantly step up the alignment with the EU acquis and implement and enforce the relevant legislation. Limited to no progress was made on the different EU acquis chapters during the reporting period. Bosnia and Herzegovina has been backsliding in the area of public procurement, where it applied preferential treatment for domestic bidders in awarding public contracts during most of the reporting period; amendments to the public procurement law are awaiting parliamentary adoption. Limited progress was made on statistics, as preparation for the next population and housing census has hardly progressed. Some progress was made on public internal financial control, with both entities adopting strategies. Major steps are required to align the legislative framework with the EU acquis on the internal market (free movement of goods, services and capital, competition policy, and financial services). Bosnia and Herzegovina made some progress only on competition policy, further aligning the law on State aid with the EU acquis, and in financial services. This cluster is key for Bosnia and Herzegovina’s preparations for the requirements of the EU’s internal market and is highly relevant for early integration and the development of the Common Regional Market. Bosnia and Herzegovina made limited or no progress in most areas of competitiveness and inclusive growth (information society and media, taxation, economic and monetary policy, enterprise and industrial policy, education and culture, and the customs union), where it is at an early stage or has some level of preparation. These areas have significant links to the country’s Economic Reform Programme. Socio-economic reforms must be pursued to help address the existing structural weaknesses, low competitiveness, high unemployment, as well as the impact of the pandemic, which has further increased their urgency. Some progress was made with the adoption of policies on inclusive education, vocational education and training, and entrepreneurial learning. Bosnia and Herzegovina made some or limited progress in most areas related to the Green Agenda and sustainable connectivity, (trans-European networks, energy, and environment and climate change), where it is at an early stage or has some level of preparation. The country needs to significantly step up its ambitions towards a green transition, and align its laws on gas and electricity with the EU acquis. The green transition and sustainable connectivity are key to economic integration within the region and with the EU, facilitating cross-border trade within the region and creating real benefits for businesses and citizens. This cluster and the reforms concerned have significant links to the Economic Reform Programme, the Economic and Investment Plan and the Green Agenda for the Western Balkans. Bosnia and Herzegovina made no progress in the areas linked to resources, agriculture and cohesion (agriculture and rural development, food safety, veterinary and phytosanitary policy, fisheries, and financial and budgetary provisions), where preparation is mostly at an early stage. Bosnia and Herzegovina has some level of preparation but made no progress as regards external relations. The country needs to intensify the efforts to finalise its accession to the World Trade Organization. Bosnia and Herzegovina is strongly encouraged to improve its alignment with the EU foreign policy statements and restrictive measures, which has significantly declined to reach 43% by August 2021, which is worrying. Bosnia and Herzegovina continued to actively participate in regional cooperation and maintain good neighbourly relations.

2. Cluster 1: The Fundamentals of the Accession Process 2.1.Functioning of democratic institutions and Public Administration Reform 2.1.1 Democracy The political environment remained polarised in the reporting period, with repeated calls from the Republika Srpska entity leadership to roll back reforms and to block State-level institutions, the latest in July 2021 after the High Representative used its executive powers to criminalise denial of genocide and war crimes. The Federation entity remains with a caretaker government, three years after the October 2018 elections. Polarisation between the different levels of government also hampered the response to the COVID-19 pandemic, including in terms of procurement of vaccines. Bosnia and Herzegovina has taken some significant step on the 14 key priorities, but most substantive issues remain outstanding. Municipal elections were held in Mostar in December 2020, for the first time since 2008. An action plan on the key priorities remains pending with the Council of Ministers due to political disagreements on the distribution of competences. The State budget for 2021 is still awaiting adoption; State institutions are funded via three-monthly temporary financing decisions. Elections Some progress was made towards addressing part of the Opinion key priority 1 as municipal elections were held in Mostar on 20 December 2020, for the first time since 2008, in the context of the local elections which were held orderly in November across the country. Previous recommendations by OSCE/ODIHR, Venice Commission and GRECO remain unaddressed, including as regards transparency of political party financing. An inter-agency working group was established in May 2021 to discuss electoral and constitutional reforms. Political actors and institutions need to engage in a transparent and inclusive dialogue to address long-standing electoral shortcomings ahead of the next general elections in October 2022. No legislative steps were taken to implement the comprehensive set of recommendations issued by OSCE/ODIHR and GRECO on the transparency and integrity of the electoral process and the implementation of election results. Bosnia and Herzegovina does not have an action plan for this. Ethnic- and residence-based restrictions to the right to stand for election to the Presidency and the House of Peoples of Bosnia and Herzegovina remain in violation of the ECHR and its Protocols. In December 2020, in the Pudarić case, the European Court of Human Rights (ECtHR) found that the applicant, a Serb residing in the Federation entity, was discriminated for his inability to stand as a candidate for the Presidency. This is the fifth decision since 2009 in the Sejdić-Finci case law. In May 2021, an inter-agency working group (IAWG) was established to discuss constitutional and electoral reforms to address key priorities 1 and 4 ahead of the October 2022 general elections. The working group, composed of members of parliament and of government of both ruling and opposition parties, is expected to prepare legislative amendments to bring the electoral framework in compliance with the case law of the ECtHR and with European standards. The IAWG has the mandate to consult expert from civil society, the Central Electoral Commission, and academic community. Municipal elections were held orderly on 15 November 2020 across the country amid the pandemic and were marked by organisational difficulties and divisive campaigning. Voting took place in Mostar on 20 December 2020 for the first time since 2008, thanks to legislative amendments adopted in July 2020, thus complying with the 2010 decision of the Constitutional Court and the 2019 ECtHR decision in the Baralija case. A new Mostar city council and mayor took office by February 2021, thus fulfilling part of key priority 1. The electoral campaign was marked by divisive rhetoric, verbal attacks, and lack of substantial party programmes for municipalities and cities. Epidemiological regulations were unevenly enforced during the campaign, as pre-electoral events were not subject to restrictions. Epidemiological measures were broadly respected during the voting. Turnout reached 50%. The minor irregularities registered did not influence the outcome. Opposition candidates gained mayoral seats in Sarajevo, Banja Luka and Bijeljina. Elections were repeated in February 2021 in Doboj and Srebrenica, as well as in Travnik and Foča-Ustikolina in April 2021. Partial boycotts were reported in the Srebrenica and Travnik re-run elections. Municipal elections did not improve local political representation of women: only 5 out of 136 directly-elected mayors are women, as well as the indirectly-elected mayor of the City of Sarajevo. Of 2,417 municipal lists, 450 (19%) were headed by women. Four directly-elected mayors and the indirectly-elected Mayor of the City of Sarajevo come from the rank of the ‘Others’; there are no members of national minorities amongst the 143 mayors. The Central Election Commission (CEC) demonstrated a professional, independent and proactive approach, despite political attacks by; a court ruling on the legality of the March and May 2020 appointments to the CEC is still pending. Parliament The polarised political environment further slowed down legislative activities. The Parliamentary Assembly convened regularly, however the legislative output was minimal, including on key EU-related laws. The legislative assemblies in the country remain weak in relation to the executives, with little cooperation among them and weak capacities to ensure a harmonised alignment with the EU acquis. Legislation and practices on registration of political parties and on political party financing need to be improved. Good progress was made in addressing the Opinion key priority 3 on ensuring the proper functioning of the Stabilisation and Association Parliamentary Committee (SAPC). The Parliamentary Assembly of Bosnia and Herzegovina met regularly, despite the pandemic. The Parliament had a minimal output, despite the outstanding legislative backlog. The very limited legislative initiative of the Council of Ministers resulted in the parliamentary adoption of only five sets of amendment to the existing laws by June 2021, all in regular procedure. The Parliament’s oversight of the executive improved; the Council of Ministers survived a no-confidence vote in January 2021. An ad-hoc investigative committee on the situation in the judicial institutions held 32 sessions by June 2021. A uniform and effective system of monitoring the implementation of conclusions and recommendations adopted at oversight hearings or plenary sessions is yet to be developed. The Parliament’s oversight of the government’s response to the coronavirus pandemic was limited. After five years of stalemate, in July 2020 the Parliament adopted the proposal of rules of procedure of the SAPC, which foresee two-thirds majority voting without ethnic quotas. The second meeting of the SAPC took place on 17 June 2021, marking good progress on key priority 3. Bosnia and Herzegovina still needs to fully ensure the proper functioning of the SAPC, notably with the adoption of recommendations by the joint body. Parliamentary representation of women remains unchanged, at around 20%, despite a 40% gender quota for candidates; rules of procedure requiring gender balance are largely ignored. Entity parliaments met regularly despite the pandemic, with online and physical sessions, making large use of urgent procedures. In 2020, the Parliament of the Federation entity adopted 7 laws in urgent and 7 in shortened procedure out of a total of 22 (64%). The entity government survived a no-confidence vote in June 2020. In the Republika Srpska entity, the National Assembly adopted in the reporting period 13 laws in fast-track procedures out of 26 (50%), including the budget; such procedures are in principle reserved only for exceptional cases. The Brčko District Assembly adopted 38 laws, 18 of which (47%) in urgent procedure. There are no specific standing committees on oversight and control of the government in either entity, and the assemblies do not follow up on the work of administrative bodies. The new rules of procedure introduced in June 2020 in Republika Srpska entity significantly shortened the length of sessions but did not particularly improve the quality of parliamentary work. Due to splintering, the entity assembly has now 12 party groups, compared to 9 in 2018. After all its activities were suspended in 2020, the parliamentary forum on European integration held two sessions in 2021.

No steps were taken to harmonise the legislation on the registration of political parties across the country and to ensure appropriate follow-up to the outstanding GRECO and OSCE/ODIHR recommendations on political party financing, including on transparency of campaign costs and sanctions for breaches. The Central Election Commission needs to strengthen its audit capacity to monitor compliance on political party financing. Issues persist in relations to internal party democracy, which include a lack of democratic internal policies and structures. There are no women among the political party leaders, and few in other party leadership positions. Governance The State-level Council of Ministers had a low output in the reporting period. The appointment of new governments in the Federation entity and in one canton remain pending since the 2018 elections. The executives have little capacities for coordination and policy planning, including on EU matters. This requires effectively implementing the legislation on coordination of EU matters, including the coordination mechanism, and strengthening the Directorate for European Integration. No progress was made in addressing the Opinion key priority 2 on developing and adopting a national programme for the adoption of the EU acquis (NPAA), reflecting the role of all levels of government in aligning with the EU acquis. The Presidency failed to meet regularly over the reporting period, and its members continued to express opposite stances on multiple issues. ‘Vital entity interest’ vetoes were raised against Presidency decisions in July and August 2020 and supported by the Republika Srpska entity assembly. Despite disagreements, the Presidency managed to respond consistently to the COVID-19 pandemic. The Presidency also ratified Additional Protocol 6 to the CEFTA Agreement, and supported Bosnia and Herzegovina’s participation in the Common Regional Market initiative and the Green Agenda for the Western Balkans. On the 25th anniversary of the Dayton Peace Agreement, the Presidency issued a statement but failed to hold a joint commemoration of all civilian victims of the war. The Council of Ministers had a very low legislative output, adopting three draft laws and two sets of amendments. Two ministers are women (22%), in charge of foreign and civil affairs. The governments of the Republika Srpska entity and of most cantons worked regularly in the reporting period. The governments of the Federation entity and of the Herzegovina-Neretva Canton continued to act in a caretaker mandate, for the third year since the 2018 elections. In the Brčko District, the new ruling coalition includes ten political parties. The participation of women in the executives across the country remains at around 20%. The President and Parliament of the Federation entity have not yet filled the vacancies at the Constitutional Court of the Federation entity, which since 2019 operates with only 5 judges out of 9; this seriously impairs its decision-making, which requires a quorum of five. Its panel on ‘vital national interest’ vetoes is not able to function with only 3 judges out of the 7 required. The members of the securities commission of the Federation entity were only appointed in September 2021, after over a year. Despite the need to focus on fighting the pandemic, there was very limited coordination among executives at all levels, including on epidemiological and socio-economic response measures, whose timeline and scope were not harmonised. Epidemiological decisions taken by ‘crisis headquarters’ in the Federation entity have been quashed by the entity Constitutional Court in December 2020 due to lack of legal basis and proportionality, after which the Federation Government started to formally adopt the measures recommended by the ‘crisis headquarters’. The entity and state governments adopted in October 2019 and January 2020 respectively a document outlining a socio-economic reform programme for 2019-2022. No steps were taken to develop and implement a common action plan of socio-economic reforms in line with the key recommendations of the European Commission and with the joint conclusions of the economic and financial dialogue. Formulating and enacting this package of socio-economic reforms requires good coordination among executives at all levels. Coordination on EU matters, including in the development of countrywide sector strategies, is essential to ensure harmonised alignment with the EU acquis and to benefit from EU assistance and participation in EU programmes. This requires effectively implementing the legislation on coordination on EU matters, including the coordination mechanism, and strengthening the Council of Ministers’ Directorate for European Integration (DEI) to ensure a harmonised alignment with the EU acquis). Executives and legislatures across the country have little capacities for coordination and policy planning, including on EU matters. As a key priority and outstanding obligation under the SAA, Bosnia and Herzegovina needs to develop a national programme for the adoption of the acquis (NPAA) / Programme for EU Integration (PI) that reflects the role different levels of government play in aligning with and enforcing the EU acquis, duly including SAA obligations and other EU requirements in the NPAA and in the corresponding annual work programmes of all levels of government. The Council of Ministers adopted in September 2020 a methodology for the NPAA, prepared by the DEI; Bosnia and Herzegovina needs to proceed to develop the NPAA and agree upon it with the Commission. The DEI also prepared an action plan on the 14 key priorities, which is still pending adoption by the Council of Ministers, due to obstruction by the Republika Srpska entity. (See Public Administration reform) The Republika Srpska entity has a 2017-2021 strategy for local self-government, while there is no such strategy at the state level or in the Federation entity. Following the municipal election, Republika Srpska entity authorities announced reforms to curb the power of newly-elected opposition mayors in Banja Luka and Bijeljina; no measures have been introduced so far. Anti-corruption offices have been established in several cantons of the Federation entity. Civil society Limited progress was made in addressing the Opinion key priority 11 on ensuring an enabling environment for civil society, notably by adopting a new law on freedom of assembly in the Brčko District, broadly in line with EU standards. Freedom of assembly and of expression remain restricted in the Republika Srpska entity, where activists of the ‘Justice for David’ movement have been subject to intimidation and judicial prosecution, and where a new crime of offence to the reputation of the Republika Srpska entity and its peoples was introduced in August 2021. Meaningful and systematic consultations with civil society remain to be ensured as part of an inclusive policy dialogue. The adoption of a framework for the transparent funding of civil society organisations remains outstanding. The overall legal and regulatory framework for civil society in Bosnia and Herzegovina is broadly in line with the EU acquis. An empowered civil society is a crucial component of any democratic system and should be recognised and treated as such by public institutions. The legislation on freedom of association is broadly in line with standards and generally upheld. Activists dealing with sensitive issues remain targets of threats, abuse and physical attacks. A framework for the transparent and impartial distribution of public funds to associations is needed across the country; only few municipalities adopted regulations on the issue. The legislation on freedom of assembly needs to be harmonised across the country and aligned with European standards, in particular as regards grounds for restriction and the responsibility of organisers. The new law adopted in July 2020 in the Brčko District, broadly in line with EU standards, should be used as a model in all other jurisdictions. Freedom of assembly remains restricted in the Republika Srpska entity, where activists of the ‘Justice for David’ movement continue to be subject to intimidation, fines, and judicial prosecution. The crime of offence to the reputation of the Republika Srpska entity and its peoples, introduced by law in August 2021, risks further restricting the space for civil society. The legislation on public consultations is uneven across the country and meaningful and systematic consultations remain to be ensured. The Council of Ministers needs to enact the 2017 charter on cooperation with civil society organisations. (see also Public Administration Reform) Civilian oversight of the security and intelligence sector The Parliamentary Assembly and its committees have a key role in the oversight of the country’s security forces. The joint committee on defence and security held 10 sessions in 2020 and 7 in 2021. The joint committee for the oversight of the Intelligence-Security Agency (OSA) only held two sessions since its constitution in January 2020 due to political disagreements on the appointment of the OSA Director and deputies; an investigation is ongoing on the qualifications of the OSA Director. The legislation on the OSA has not been amended yet to address a number of procedural shortcomings identified by the Constitutional Court in June 2017. The Military Commissioner, who oversees the protection of the human rights and freedoms of soldiers and personnel of the armed forces and the Ministry of Defence, opened 102 proceedings in 2020. 2.1.2. Public Administration Reform

Bosnia and Herzegovina is at an early stage with public administration reform. Some progress was made in addressing the Opinion Key priority 14 with the adoption of the action plan on public administration reform (PAR) and of the strategies on public financial management (PFM) at all levels of government. Bosnia and Herzegovina faces challenges to effectively implement the PAR Action Plan and to develop a comprehensive and countrywide PFM strategy. Ensuring political commitment and establishing an effective coordination structure on PAR remains a priority. Despite some progress in civil service trainings, performance appraisals, improved legal basis on strategic planning and impact assessments at some government levels, last year’s recommendations remain largely valid. In the coming year, Bosnia and Herzegovina should in particular: ®adopt a countrywide strategic framework for public financial management 2021-2025 and continue the implementation of the action plan of public administration 2018-2022; ®establish a functioning coordination structure with a political decision-making body and improve the capacities of PAR Coordinators to steer coordination of public administration reforms across all government levels; ®develop and adopt amendments of civil service laws to ensure respect of the merit principle at all levels of government and strengthen the capacities of civil service agencies to improve human resource management and trainings. Strategic framework for public administration reform In June 2020 the Government of the Republika Srpska entity adopted the countrywide strategic framework on public administration reform (PAR SF) 2018-2022, and, by the end of 2020, all levels of government adopted the related PAR Action Plan 2020-2022. The systematic implementation of the PAR Action Plan has faced delays and the timeframe of the strategy and action plan needs to be extended. A common performance-based monitoring system remains to be established. Insufficient political support still hinders the coordinated implementation of reforms by all levels of government. The country has yet to establish a political decision-making body to steer and coordinate reforms across all levels of government. The existing coordination structures at technical level also need to be strengthened. Financial sustainability is not ensured, and reforms are mostly donor-driven; this has even worsened with the pandemic. Policy development and coordination The policy-making system in Bosnia and Herzegovina remains fragmented. The legislative framework on medium-term policy planning is unevenly developed. In January 2021, the Federation entity further extended the entry into force of a set of by-laws regulating the annual and medium-term work planning, monitoring and reporting until January 2022. The Council of Ministers still has to choose the best alternative solution for regulating sector strategic planning. The Republika Srpska entity adopted in June 2021 a law on strategic planning and development. There has been no progress in developing methodological guidance for countrywide sectoral strategic planning by harmonising central planning documents, framework budgets and countrywide sector strategies across levels of government. While the legal framework for monitoring and reporting is in place, the public availability of government reports is very limited. Bosnia and Herzegovina is still expected to develop its first National Programme for the Adoption of Acquis (NPAA), i.e. Programme of EU Integration (PI). In September 2020 the Council of Ministers adopted a methodology for the development of the programme, but such methodology lacks requirements on costing the planned measures. The legal framework for inclusive and evidence-based policy development needs to be consistently implemented across all levels of government. In September 2020, the Federation entity regulated the manner and procedure of regulatory impact assessment for legislation and clarified institutional responsibilities. The impact and quality of the analysis supporting policy proposals remains weak across all levels of government. Quality control function for consistent oversight on regulatory impact should be upgraded across all levels of government. Financial implications remain not systemically calculated, and the collection and use of administrative data for policymaking are not ensured. The legal framework on public consultations needs to be improved and consistently applied. The legislative framework does not fully establish standards for monitoring and reporting on key government planning documents at each level of government, hampering public scrutiny over government work. Beyond legislative measures, more efforts are needed to raise awareness on various forms of consultation with the public, and to strengthen the technical capacities at all levels of government to regularly use them. Public financial management Bosnia and Herzegovina still needs to develop and adopt a countrywide strategy for the reform of public financial management (PFM) with a performance-based monitoring to establish common reform priorities. This is one of the eligibility criteria for sector budget support. All levels of government adopted their own PFM strategies for 2021-2025 in the reporting period. Public institutions at all levels lack sufficient internal audit capacity and adequate internal control, especially for public procurement. Reform efforts need to target the substantial payment arrears of the public sector, in particular in the health sector, and publicly owned enterprises, in order to increase transparency, fiscal sustainability and efficiency in the sector. The management of public investments needs further upgrading. (See also Chapter 5 and Chapter 32). Bosnia and Herzegovina has not yet achieved sufficient budget transparency, although during 2020, state institutions and entities published their respective citizens’ budgets online. Annual budgets and reports on budget implementation are published by state institutions and two entities. The lack of harmonisation of the charts of accounts at state and entity level hampers access to consolidated data. In-year reporting still needs to improve at all levels of government. Available budgetary information remains incomplete, and assessing the overall budgetary and fiscal policy is difficult. In addition, budget calendars remain to be adopted. For most of the reporting period, Bosnia and Herzegovina had to rely on three-monthly temporary financing decisions. The 2020 budget was adopted only in late July 2020. The 2021 budget was adopted by the Presidency only on 24 June 2021 and is still pending adoption by the Parliament. Public service and human resources management Merit-based recruitment, promotion and dismissal of civil servants based on objective criteria is not fully ensured. The various civil service laws do not provide a clear and comparable vertical and horizontal scope of the civil service, nor do they clarify which institutions are included in the civil service, which positions belong to civil servants, as well as what are senior and middle management categories. Political influence in recruitment and promotion procedures persists systematically at all levels of government. Candidates are often selected without applying merit principles, and in certain recruitment procedures, particularly at cantonal level, final selection depends on ethnic background rather than merit. Constitutional provisions on the general representation of the population in the public administration should not be interpreted as to imply strict ethnic proportionality in civil service and the legislation should ensure that ethnic criteria do not prevail over merit-based recruitment. The criteria for dismissals and disciplinary procedures set by the legislation are still insufficiently applied, including as regards the possibility to appeal. Gender equality in public service is at an early stage and only a few top managers are women. Human resources management (HRM) remains highly fragmented. Different working conditions stemming from the various civil service legislation as well as diverging practices across levels of government hamper the mobility of civil servants and the creation of an administrative space with equal standards. The Brčko District adopted the common policy framework on HRM development in August 2020 and Republika Srpska entity did so in March 2021. There is no coordinated approach to HRM and civil service legislation across all levels of government. In particular, the Federation entity and cantons need to develop a coordinated legislative framework on civil service. Monitoring of human resource management is not done consistently across levels of government and civil service agencies do not make those data fully transparent to the public. The State level needs to adopt a legal basis to make the Human Resource Management Information systems (HRMIS) functional for civil service. In July 2020, the Federation entity regulated the manner of maintaining the civil service registers, and Brčko District adopted the legal basis to establish the public service registers, which was made public in August 2020. The remuneration system for civil servants remains inconsistent across public institutions and continues to lack transparency, also due to differences across the country in salary legislation, job classification, and pay grades. The remuneration system is based on the job classification at each administrative levels and all basic salary elements are regulated by the law. The salary system at all levels of government still lacks appropriate level of transparency. No level of government publishes information on average salary levels for different job categories. Fairness in determining the basic salary is not fully ensured at any level of government. Although a new system of classification and job categorisation was established, the new job classification systems have not yet been fully applied in the legislative framework and practice. Civil service agencies need more resources for training and professional development. Some progress was made in establishing the legislative and policy framework for trainings and performance appraisal, particularly at the Federation entity. A performance appraisal system is in place but not used properly and systematically to justify promotions. There was no progress in establishing a coherent system for fair performance appraisal, promotion and training as a right of a civil servant. There is no systemic, consolidated data on the integrity of civil servants. The Federation of Bosnia and Herzegovina revised the 2014 code of ethics and partially amended the regulation on disciplinary proceedings and liability of civil service. While all levels of government have a code of ethics, the Brčko District still has to align its own with the civil service law. Public perception of corruption among public officials remains high. The Federation entity still needs to adopt legislation on whistle-blowers’ protection, and the Republika Srpska entity on declaration of assets; such legislation should be aligned with international standards at all levels of government. Measures to promote integrity in public service are only partially in place and are not systematically applied. Accountability of administration No progress was made in specifying in the legislation the different functions of administrative bodies, or the conditions for establishing, merging or abolishing them at all levels of government. This leaves excessive discretion to restructure the administration without consideration of the rationale and cost-effectiveness of changes. Clear supervision and reporting lines between ministries and subordinated institutions are still lacking. The political level does not sufficiently delegate decision-making responsibility to senior civil servants or to middle management. The Federation entity issued guidelines for the development of managerial accountability in the public sector with the purpose of ensuring practical implementation of the concept of managerial accountability. (see also Chapter 32) The recommendations of oversight mechanisms such as parliamentary scrutiny as well as of independent institutions such as the State Audit Institution and the Human Rights Ombudsman remain rarely implemented. Several institutions do not even respond to the recommendations addressed to them, although they are legally obliged to do so. This compromises the citizens’ right to good administration. The enjoyment of the right to access public information remains uneven. Legal provisions on data protection and on access to information are still interpreted in a way that protects private rather than public interests. There is a lack of effective institutional mechanisms to supervise the implementation of laws or sanction violations. The legislative framework has to be aligned with international and European standards.

The varying efficiency of courts across the country render the citizens’ right to administrative justice uneven. There are no effective remedies against the excessive length of judicial proceedings. (see also Chapter 23) There is no systemic collection of data on the citizens’ right to seek compensation for damage caused by unlawful actions or omissions of the public administration. Service delivery to citizens and businesses The legal framework for a user-oriented administration varies substantially across the country. A new law on electronic identification and trust services for electronic transactions in compliance with the EU acquis is still pending adoption. To foster a user-oriented administration, Bosnia and Herzegovina should simplify and harmonise business registration procedures and ensure full mutual recognition between entities, including on concessions and licensing. The Brčko District introduced in April 2021 an electronic system of business registers. One-stop-shops for citizens or businesses exist in the Republika Srpska entity and since April 2021 in the Brčko District. The overall perception of citizens about public services is very low. 2.2. Rule of law and fundamental rights 2.2.1 Chapter 23: Judiciary and fundamental rights Bosnia and Herzegovina has some level of preparation to implement the EU acquis and European standards in the area of judiciary and fundamental rights. No progress was made during the reporting period. The authorities and the judiciary have taken limited action to address the findings of the Expert Report on Rule of Law issues, and political commitment towards justice reform remains insufficient. The poor functioning of the judicial system continued to undermine the citizens’ enjoyment of rights and the fight against corruption. Corruption indicators further deteriorated and all levels of government show signs of political capture directly affecting the daily life of citizens. Selective and non-transparent prosecution and judicial follow up of corruption cases continued, affecting public interest, but also business operators and investors. As regards fundamental rights, significant reforms are needed to ensure that all citizens are able to effectively exercise their political rights and thus bring the country’s constitutional and legislative framework into line with the Sejdić-Finci case-law of the ECtHR. Functioning of the judiciary Bosnia and Herzegovina is at an early stage/has some level of preparation in the area of the judiciary. No progress was made in addressing the Opinion key priority 6. Three out of four 2019 recommendations remain outstanding and one has been addressed to a limited extent. The authorities and the judiciary have taken limited action to address the findings of the Expert Report on Rule of Law Issues (‘Priebe report’). Action was taken towards the establishment of a system of verification of asset declarations of judicial office holders. To this aim, targeted amendments to the law on the High Judicial and Prosecutorial Council, have been adopted by the Council of Ministers, and are due to enter the parliamentary procedure. Persistent and evident signs of deterioration continue to require urgent measures to strengthen integrity and regain citizens’ trust in the judiciary. Lack of commitment to judicial reform from political actors, and the poor functioning of the judicial system continued to undermine the citizens’ enjoyment of rights and the fight against corruption and organised crime. In the coming year, Bosnia and Herzegovina should in particular: ®urgently adopt the integrity-related targeted amendments to the HJPC Law establishing among other a credible and rigorous system of verification of asset declarations of judges and prosecutors, and members of the High Judicial and Prosecutorial Council; ®adopt the new law on the High Judicial and Prosecutorial Council and the new law on the Courts of Bosnia and Herzegovina, in line with European standards; ®apply consistently merit-based appointment practices, without prevalence of ethnic criteria, and ensure that quality criteria are applied in performance appraisal; ®effectively implement the revised National War Crimes Strategy, notably by appointing the supervisory body, and adopt a new Justice Sector Reform Strategy. Strategic documents Bosnia and Herzegovina needs to develop and adopt a new 2021-2027 Justice Sector Reform Strategy and action plan to replace the ones expired in 2018, notably by establishing a credible implementation timeline and ensuring adequate monitoring and funding. Legal and institutional framework The legal and institutional framework has significant shortcomings. No progress was made on the Opinion key priority 6, requiring the country to adopt the new Law on Courts of Bosnia and Herzegovina and the new Law on the High Judicial and Prosecutorial Council (HJPC) which indicates continued insufficient political commitment to pursue key rule of law reforms. The Law on Courts should achieve greater legal certainty, and clarify the courts’ subject matter jurisdiction. It should also provide for a separate second instance appellate court. The new Law on the HJPC should strengthen the independence, professionalism and accountability of the judiciary. The Ministry of Justice should swiftly finalise the drafts of both laws, in line with European Commission recommendations, and submit them to the Venice Commission for an opinion, before adoption by the Council of Ministers and submission for parliamentary procedure. Judicial self-governance body In the reporting period, continued shortcomings in the independence, accountability and efficiency of the HJPC have further deteriorated trust in the judiciary. Additional corruption allegations against the HJPC President culminated with his resignation and appointment of a new HJPC president in February 2021. None of the corruption allegations have been properly investigated by the HJPC, which remains a matter of serious concern. In May 2021, the HJPC adopted a 2021-2023 HJPC Reform Program, including measures to strengthen the quality, integrity, efficiency of the judiciary and fight against organised crime and corruption. The HJPC must ensure its swift implementation and urgently enable reforms in the areas under its direct competence, notably those that do not require legislative changes.

Independence and impartiality Limited action was taken in 2020 to improve the independence and impartiality of the judiciary, which need to be significantly strengthened in line with European standards, including through additional constitutional and legal safeguards. The rules on the appointment, promotion, career advancement, conflict of interests and disciplinary responsibility of judges and prosecutors remain insufficient to safeguard their independence. The HJPC amended its internal rules on appointment procedures, disciplinary measures and integrity standards; however, their inconsistent and non-transparent implementation continued to hamper judicial independence and public trust. The HJPC needs to ensure that judicial appointment procedures are merit-based and transparent, and that appointment decisions are thoroughly reasoned. Multiple ad-hoc appointment procedures make the system vulnerable. Access to the judicial and prosecutorial profession should be managed through a single annual examination. In addition, first access to the judicial or prosecutorial profession should be conditional on completing a specialised preparatory programme. Access to the profession and judicial promotions should be subject to thorough integrity and asset verificaitons. The new Law on the HJPC should address these shortcomings. The regulatory safeguards on impartiality remain weak and are applied inconsistently, notably for conflict of interests and case allocation. There are no sufficient security features to prevent abuse of the random case allocation and the reassignment of cases without due justification. Manual case assignment is still observed, including at State level prosecutor’s office. This is a cause of major concern and needs to be urgently remedied by the HJPC in cooperation with court presidents and chief prosecutors. Judges and prosecutors remain subject to internal and external pressure, including politically motivated intimidation. Such practices need to be forcefully addressed. There are no dedicated sanctions for undue influence of the judicial office holders or public comments that would undermine their independence. The HJPC needs to review its reporting mechanism, to ensure effective follow up and safeguard judicial independence. The citizens’ and business perception of judicial independence remained low. Accountability Preliminary action was taken towards the establishment of a system of verification of asset declarations of judges and prosecutors and members of the HJPC, in line with the Commission’s recommendations. The lack of the system seriously affects the integrity of the judiciary. Obstruction to integrity reforms from political actors and from within the judiciary needs to be addressed by legislative amendments. As a positive step, in June 2021 the Council of ministers adopted the targeted amendments to the HJPC law, which are now to be submitted for parliamentary procedure. Pending their adoption in Parliament, the HJPC and its secretariat must swiftly take all necessary preparatory action for the verification of asset declarations, in line with the Commission’s recommendations and Venice Commission’s Opinion, before staff and management of the unit are recruited. Moreover, in the meantime, voluntary publication of asset declarations by all HJPC members and by judicial management must be further encouraged. All courts and prosecutors’ offices have integrity plans, but their implementation is uneven. The HJPC has put in place an integrity unit in September 2020, as part of its secretariat, whose activity has had only limited impact. Implementation of integrity plans and code of ethics and their monitoring must be stepped up. The recruitment of judges and prosecutors does not include any thorough integrity and assets verification or any assessment of the candidates’ ethical and moral standards. Disciplinary procedures continue to be limited and have little dissuasive effect. In 2020 the office of the disciplinary prosecutor registered 31 complaints against 31 judicial office holders (50% less than in 2019) and filed 29 disciplinary charges, including in two high-level cases regarding the President of the Court of Bosnia and Herzegovina and the State-level Chief Prosecutor. These cases require a thorough, independent and transparent follow up. Pressure and intimidation against the office of the disciplinary prosecutor has continued and is a cause of concern; it needs to be forcefully addressed. Plans to provide the disciplinary prosecutor with greater autonomy and independence from the HJPC, in particular through sufficient separation of premises and infrastructure, must be urgently pursued by the HJPC. The HJPC disciplinary commissions completed 30 disciplinary proceedings. 26 cases resulted in disciplinary measures, including 12 cases of salary reduction. Two court presidents were removed from their management position on the account of disciplinary offence of nepotism and criminal offence. The disciplinary panels are almost exclusively composed of HJPC members without clear selection criteria, which constitutes a potential conflict of interest, in particular when members of the HJPC are concerned. There are no rules guaranteeing full independence and impartiality of the disciplinary panels or the right to judicial review of their decisions, except in cases of dismissals. The targeted amendments to the law on the HJPC should provide for disciplinary liability of all members of the HJPC, including the President. Promotions continued to be systematically granted in disregard of disciplinary record. This practice is worrysome. Disciplinary background should be duly taken into account in the performance, appraisal and promotion of judicial office holders to enhance a rule of law culture in the judiciary. Targeted amendments to the Law on the HJPC should provide for suspension of appointments and promotions subject to verfication of asset declarations. Irregularities detected during verifications should be automatically referred to the office of the disciplinary prosecutor, and properly reflected in the appointment and promotion process. Professionalism and competence The appointment and career advancement of judges and prosecutors is not sufficiently based on merit and continued to rely extensively on ethnic criteria or other considerations, especially for presidents of courts and chief prosecutors. Merit criteria for access to the judicial profession and in particular for promotions remain insufficient. This is a source of serious concern. Following the 2020 decision of the Court of Bosnia and Herzegovina, the criteria on performance appraisal for all judges and prosecutors have been annulled. In May 2021, the Court of Bosnia and Herzegovina rejected theappeal of the HJPC against its decision as inadmissible. This is a major setback for judicial reform which should be urgently remedied via the targeted amendments to the HJPC Law. A system of thorough and balanced performance appraisal based on quality criteria must continue to be in place and consistently applied to all judges and prosecutors, in line with the European standards. Quality of justice There was no meaningful progress in prosecution and judicial follow-up of cases of public resonance including cases of alleged electoral fraud, notably following elections in Mostar. The State-level Prosecutor’s Office asserted jurisdiction over two entity-level organised crime cases, involving unresolved killings, on the basis of the extended jurisdiction clause relating to detrimental consequences for the country. These two investigations are ongoing. It is essential to ensure effective judicial protection and the right to fair trial in these cases. The justice system continues to lack transparency. In January 2021, the online database of court decisions was opened to the public free of charge; however the database does not yet include all key court decisions and indictments, in particular in corruption cases. The database, needs to be systematically populated to foster consistent case law across the country. The HJPC received 78 requests for access to information in 2020, all of which were processed. The HJPC has no communication strategy in place. The judiciary needs to significantly improve transparency in its interaction with legal professionals, justice users, the media and public at large. Dedicated case law departments should also be in operation in all the highest judicial instances. Comprehensive training on public communication and media relations for courts and prosecutors’ offices is required to ensure transparency and public trust in the judiciary. Case law lacks consistency. The legal status and effectiveness of the judicial panels for the harmonisation of case law in civil, criminal and administrative matters need to be significantly strengthened. Ultimately, Bosnia and Herzegovina needs to establish a judicial body to ensure the consistent interpretation of the law and harmonisation of case law across the country. There are 1,024 judges and 358 prosecutors, including 77 court presidents and 18 chief prosecutors, for an average of 29 judges and 10 prosecutors per 100,000 inhabitants, against a European average of 21 and 12 respectively, according to the Council of Europe’s European Commission for the Efficiency of Justice (CEPEJ). 61% of the total number of judges and prosecutors and 49% of managers are women. The 2020 budget for the judiciary, including the HJPC is EUR 135.2 million (0.79% of GDP), which is less than in 2019 (EUR 137.3 million, 0.76% of GDP). In 2020, EUR 102.9 million was allocated to courts and EUR 29.7 million to prosecutors’ offices (compared to EUR 104.8 million and EUR 29.6 million in 2019). The funds allocated remain insufficient to cover investment needs and to improve the judicial infrastructure, since over 85% of the budget is spent on salaries and compensations. Training for judges and prosecutors remains insufficient. Significant improvements in the duration, quality and diversity of substance of mandatory training remain urgently needed. Its content should not be limited to legal issues, but also address values and professional skills. Court presidents and chief prosecutors need to be more involved in identifying the training needs of their staff and promote their participation in training. The HJPC needs to strengthen the supervision of all judicial training activities based on the annual reports received from entity-level training centres. The quality of training of state-level judiciary needs to be ensured. Comprehensive training on public communication and media relations for courts and prosecutors’ offices is not in place. The coordination of donors’ support should be significantly improved. The entity-level training centres are observers to the European Judicial Training Network (EJTN), however they should be more proactive in order to benefit more extensively from the expertise within the network. A case management system allows monitoring the activities and checking the performance of judges and prosecutors on the basis of the annual workload. All courts and prosecutors’ offices regularly produce statistical reports for the HJPC as well as an annual activity report. The HJPC needs to step up its oversight on the basis of reliable statistical data on the performance of the judicial system, including on case reallocations. Efficiency

The length of court proceedings in non-utility cases increased to 421 days in 2020, compared to 418 days in 2019. The clearance rate decreased to 96% (103% in 2019). The length of proceedings remains a major concern. Weak trial management and lenient enforcement of procedural discipline by judges further aggravate the situation. Managerial oversight of court presidents/chief prosecutors by the HJPC needs to be increased. The civil and criminal procedure codes at all levels must be urgently amended to address the excessive length of proceedings. The overall backlog for pending court cases amounts to 2.1 million cases, out of which approximately 1.8 million are cases of unpaid utility bills. This seriously harms judicial efficiency. The backlog for non-utility cases slightly decreased by 5% compared to 2019, however the pandemic reduced the efficiency especially in first instance courts. The backlog of unpaid utility bill cases and small financial claims needs to be reduced significantly. Annual quotas to reduce the backlog in connection with qualitative performance appraisal criteria should continue to be used to reduce the backlog of cases, without hampering the quality of justice. The worsening of efficiency parameters due to the Covid-19 pandemic, and adoption of urgent remedial action should be pursued with priority. Initiatives to reduce the annual quotas should be resisted by the HJPC as they risk to negatively affect efficiency. An effective remedy for excessive length of proceedings needs to set up with no delay at all levels of government. Though applicants may file a case with the Constitutional Court, this measure does not ensure acceleration of the pending proceedings, and remains a continuous violation of the individuals’ rights, under the ECHR. The use of court settlement and alternative dispute resolution methods is underdeveloped and the issue of increased backlog of cases is being addressed by the HJPC solely by appointment of additional judges, which remains inefficient. Efficiency reform measures need to better explore and promote the potential of alternative dispute resolution methods, notably conciliation and mediation, in line with European standards and best practices. Domestic handling of war crime cases Bosnia and Herzegovina’s cooperation with the International Criminal Tribunal for the former Yugoslavia (ICTY) and its successor institution the International Residual Mechanism for Criminal Tribunals (IRMCT-Mechanism) is assessed as satisfactory. The Prosecutor’s Office of Bosnia and Herzegovina continues to closely collaborate with the Office of the Prosecutor of the Mechanism, processing an increasing number of requests for assistance from all prosecutors’ offices in Bosnia and Herzegovina to the Office of the Prosecutor. The Office of the Prosecutor of the Mechanism continues to assess positively the work of the Prosecutor’s Office of Bosnia and Herzegovina, but noted that a lower number of indictments for war crimes were filed in 2020. The implementation of the revised National War Crime Strategy has started. However, the supervisory body has not yet been established and sufficient funding must be provided to ensure attainment of its main target of completion of all war crimes cases by 2023. The Council of Ministers must establish the supervisory body and ensure sufficient funding with no further delay. Regional judicial cooperation in processing war crime cases remains ineffective. The bilateral protocols on cooperation related to war crimes, crimes against humanity and genocide between the Prosecutor’s Office of Bosnia and Herzegovina and its counterparts of Serbia, Croatia and Montenegro helped to reduce judicial impunity but have not been used systematically. Cooperation with Serbia has led to indictments being issued pursuant to cases transferred from Bosnia and Herzegovina, which are yet to lead to verdicts. Cooperation with Croatia continued to face a number of impediments and has not led to tangible results in terms of indictments. A protocol with the Montenegro prosecutor’s office is in place but is not used. Out of the 238 unresolved cases pending before the courts in Bosnia and Herzegovina by end 2020, 97 proceedings are pending due to the unavailability of the indicted persons. Holding multiple citizenships, these individuals are allegedly residing in neighbouring countries. This enables them to escape justice by taking advantage of the prohibition in the countries of the region to extradite their own nationals for the criminal offences of genocide, crimes against humanity and war crimes. They are also benefiting from the lack of progress of other jurisdictions in addressing the crimes in question. The final sentence handed down in Bosnia and Herzegovina in 2014 against Novak Djukić was not enforced by Serbia, despite the applicable international judicial cooperation tools. In August 2021, war crime indictee Duško Kornjača, who faces charges for crimes against humanity, was revealed to be living freely in Novi Sad, Serbia. Tomislav Kovač, indicted in 2018 for genocide in Srebrenica, is also residing in Serbia. War crime cases continued to be gradually reduced, however the processing of cases, in particular the most complex ones, is subject to serious delays, and was further impacted by the public health situation. The revised national war crimes strategy includes new timelines for the completion of all war crimes cases by 2023. With an estimated amount of 1,210 cases in July 2013, the total number of unresolved war crime cases had been reduced to 571 (-53%) by 31 December 2020; around 243 of these were complex cases. An estimated 178 cases (31.2%) are pending due to the unavailability of the suspects; they require reinforced regional cooperation. In 2020 the number of confirmed indictments and the conviction rates remained stable in the entities and the Brčko District, while decreasing at the state level. The Prosecutor’s Office of Bosnia and Herzegovina should enhance its efforts to process the most complex cases and improve the quality of investigations and indictments. Fight against corruption Bosnia and Herzegovina is at an early stage/has some level of preparation in the fight against corruption. No progress was made in addressing the Opinion key priority 7, the 2020 recommendations and the findings of the Expert Report on Rule of Law issues, which remain outstanding. Continued negative effects of widespread corruption and signs of political capture manifested strongly during the COVID-19 pandemic, directly affecting the wellbeing of citizens. Within their respective remits, both judicial office holders and political leaders have failed to tackle the generalised phenomenon of corruption and actively obstructed progress, leading to long-term stagnation, and a serious risk of backsliding in this field. Selective and non-transparent judicial follow-up in corruption cases of public resonance was observed, alongside pressures and intimidations, and is a cause of significant concern. No action was taken towards the adoption of new strategic documents at state and Federation entity levels. Lack of harmonisation of legislation across the country and weak institutional cooperation and coordination continued to hamper results. The track record on prevention and repression of high-level corruption remains insignificant, due to operational inefficiency and political interference. The Sarajevo canton authorities continued corruption prevention activities, however efficient follow-up from prosecution and judiciary remains to be ensured. The continued lack of progress at all levels shows the country’s lack of advancement in the area and increases the risk of backsliding. The political leaders and criminal justice system institutions need to urgently remedy the situation. In the coming year, Bosnia and Herzegovina should in particular: ®adopt the law on the prevention of conflict of interest at state level, and further harmonise the legislation at entity and Brčko District levels with international standards and best European practices; complete the legal framework and step up implementation on the protection of whistle-blowers; ®demonstrate progress towards establishing a track record on the repression and prevention of high level corruption, and ensure an effective and independent judicial process in the COVID-related corruption cases; ®amend criminal legislation to address lack of harmonisation and competence conflicts, excessive length of proceedings and weak institutional cooperation in corruption cases across the country; adopt a new state-level anticorruption strategy and action plan, and ensure the effective functioning and coordination of corruption prevention bodies at all levels of government. Track record Efforts remain insufficient to establish a track record of proactive investigations, prosecutions and final convictions for corruption. In particular, progress in high-level cases remains insignificant and needs to be seriously stepped up. In high-level corruption cases, in 2020, there were 14 ordered investigations, 7 filed indictments and 1 conviction with suspended sentence in the case of the former mayor of Bihać. This trend shows that there is alarmingly low number of final convictions in high-profile cases. In 2020, 51 investigations were initiated by the State Investigation Protection Agency (SIPA) into cases of corruption, of which 13 were finalised. 13 reports against 76 persons (68 natural and 8 legal entities) were sent to the competent prosecutors’ offices. The trend at state level shows that only few investigations have been finalised.

There were 91 indictments countrywide, with a decrease of 50% compared with 2019 (181), 124 indictments were confirmed, including indictments from the previous period, while the number of convictions was 110, a majority of which were suspended sentences. The HJPC has adopted criteria for the identification of high-level corruption cases. Nevertheless, data on final convictions may not be automatically retrieved from the Case Management System. This has to be remedied with urgency. Sanctions are not sufficiently effective, dissuasive and proportionate. Plea bargain agreements are frequent and sanctions are lenient because of the excessive application of mitigating circumstances, with prison sentences often suspended or even converted into fines with little dissuassive effect. Most of the convictions were pronounced for abuse of office or authority. In the area of conflict of interests, a state-level commission has been established in July 2020. It took no decisions in 2020. In the period of Junuary-June 2021, this commission initiated 11 proceedings and adopted sanctions in 3 cases, including in the case of the head of a ruling political party. The lenient sanctions imposed are not proportionate and have little dissuassive effect. As regards asset declarations, about 600 public officials of state-level institutions are required to submit their financial reports for verification, out of whom only 231 submited their financial reports in 2020 and 193 in 2021. Despite the state-level commission being established, no reports were checked and no sanctions were imposed. In the Republika Srpska entity around 4,500 office holders are obliged to submit financial reports, out of whom only 5 financial reports were submitted in 2020. A positive trend continued in the Sarajevo Canton, where 1,163 asset declarations were submitted for about 900 public positions by office holders. 227 office holders who failed to submit declarations were sanctioned with misdemeanour fines during the reporting period, of which 46 orders were appealed before minor offences courts. In all cases, the final sentences pronounced on merits imposed lower sanctions than the minimum provided by law. Such judicial practice must be further scrutinised in the light of the principle of dissuasiveness and efficiency of sanctions. The data reported in the asset declarations were verified in 2015 cases, and 5 cases of discrepancy were referred to prosecution for further investigation. Rules on conflict of interests are not enforced in the Federation entity or in the Brčko District. Asset declarations of elected officials are made available to the public through the website of the Central Election Commission, which has no obligation to check their accuracy. In the Sarajevo Canton, asset declarations of office holders are published on the website of the cantonal anti-corruption office. The Agency for Prevention of Corruption and Coordination of the Fight against Corruption (APIK) granted administrative protection to whistle-blowers in zero cases out of four requests in 2020, compared with one case in 2019. In the Republika Srpska entity, one request for protection to whistle-blowers was filed and partially upheld in 2020, compared with one request field but dismissed by courts in 2019. There is no legislation on whistle-blower protection in the Federation entity and the 2018 legislation adopted by Brčko District is not implemented. Legislation at all levels of government needs to be aligned with the EU acquis. Institutional framework Corruption Prevention The functioning and coordination of corruption prevention bodies among themselves and with the APIK continued to be ineffective. APIK should play a much more proactive role in implementing GRECO recommendations and aligning with international standards. The independence of corruption prevention bodies set up at the cantonal level needs to be significantly strengthened, as do human and material resources. The anticorruption office of the Sarajevo Canton continued to make good progress and remains an isolated good example. In 2020, the office processed 518 reports of corruption, of which 106 were sent on to the competent authorities for further investigation and action. 53 reports were referrred to the Prosecutor’s Office of Sarajevo Canton, with no meaningful judicial follow-up. The corruption prevention body of the Sarajevo Canton continued the good practice of mapping corruption risks and implementation of the methodology on public procurement monitoring in COVID-19 pandemic-related measures. In May 2021 the Tuzla Canton adopted legislation to establish an anticorruption office, on the model of the Sarajevo Canton. Bosnia and Herzegovina needs to introduce a comprehensive and effective system of electronic public procurement to foster transparency and reduce abuse of public resources. An enhanced monitoring and inspection control system remains necessary to tackle corruption and irregularities in public procurement procedures. The audit department of the Central Election Commission needs stronger capacities to monitor compliance with political party financing regulations. Law enforcement The criminal justice policy throughout the country is largely ineffective in the fight against corruption. This is in part due to inadequate law enforcement and penalties that do not ensure sufficient deterrence. Deep legal fragmentation and frequent conflicts of jurisdiction leading to transfers of cases slow down proceedings and reduce efficiency. The police are not proactive in launching investigations. Systemic shortcomings in the operational cooperation of law enforcement agencies and a very limited exchange of intelligence remains a persistent challenge. In the few high-level corruption cases reported, selective judicial follow-up and legal mistakes, negligence, abuse of procedures, political pressure, questionable court decisions and verbal attacks on the prosecution continued to be observed, including at state level. In the reporting period, limited cooperation of law enforcement agencies with the prosecutor’s offices and lack of effective control by the prosecutors over the work of police continued to seriously hamper the effectiveness of investigations. The selective unwillingness of the police, including at the state level, to cooperate with prosecutor’s offices, notably in high level corruption cases of public relevance, is a cause of serious concern over their independence and professionalism. Special anti-corruption departments within prosecution offices were established at the state level and in the Republika Srpska entity. However, their effectiveness in fighting corruption remains very weak. These specialised departments must start to deal effectively with high-level corruption cases and their independence must be significantly strengthened. Specialised departments at the Federation entity prosecutor’s office and Supreme Court have not yet been set up. Pressure and interference, especially in high level cases, has continued and is a source of major concern. The state level prosecutor’s office started two additional investigations related to the 2020 case of alleged public procurement fraud of COVID-19 medical equipment. These cases were largely reported in the media and have a high public resonance. The two investigations are still ongoing. One indictment has been confirmed by Court of Bosnia and Herzegovina against the Prime Minister and the Minister of Finance of the Federation entity, the suspended head of Civil Protection of Federation entity and a private entity (case Novalic et al.). It is essential to ensure an independent, effective and impartial judicial follow-up in these cases by state level prosecutor’s office and the Court of Bosnia and Herzegovina, which have high public resonance and elicited concern over the state of corruption in the country. Legal framework The lack of harmonisation of legislation across the country continued to hamper the fight against corruption. The country made no progress in adopting a state-level law on prevention of conflict of interest, in line with international standards and best European practices. The Federation entity needs to adopt legislation on conflict of interest as well as on the effective protection of whistle-blowers. In March 2021 the Brčko District adopted a new law on prevention of conflict of interest, which needs to be effectively implemented and further aligned with best European practices. The Republika Srpska entity needs to align its conflict of interest legislation with international standards. Lack of transparency seriously hinders the fight against corruption. The legislation on political party financing needs to be urgently aligned with international standards, particularly with pending GRECO recommendations. Legislation on freedom of access to information at state and entity level needs to be aligned with international and European standards. Data protection laws continued to be interpreted in a way that protects private rather than public interests. There is no legislation to effectively prevent and address corruption in the private sector and no regulation of lobbying. None of the GRECO recommendations have been implemented in their entirety. The authorities need to ensure appropriate legislative and institutional follow-up to fulfil the outstanding recommendations, notably on political party financing and conflict of interest. Strategic framework The anti-corruption strategies and action plans continued to be outdated, except in the Republika Srpska entity, and effective implementation continued to be lacking at all levels, further humpering a harmonised strategic approach across the country. New strategic documents need be adopted with no delay and their implementation should start with no delay. Anti-corruption strategies need to be harmonised across the country; adequate funding should be provided and strong monitoring mechanisms established to ensure their implementation.

Fundamental rights The legislative and institutional framework on fundamental rights is largely in place. Limited efforts were made over the reporting period to address the Opinion key priorities 5 and 9-13 on fundamental rights. Freedom of assembly remains restricted in the Republika Srpska entity, where activists of the ‘Justice for David’ movement have been subject to intimidation and judicial prosecution, and where a crime of offence to the reputation of the Republika Srpska entity and its peoples was introduced in August 2021. Significant reforms are needed to ensure that all citizens are able to effectively exercise their political rights and thus bring the country’s constitutional and legislative framework into line with the Sejdić-Finci case-law of the ECtHR. Divided education needs to end in order to ensure non-discriminatory, inclusive and quality education for all, including by overcoming the practice of ‘two schools under one roof’. Gender-based violence, ill-treatment of detainees and the protection of minorities, including the Roma, are also issues of concern. The country needs to develop a comprehensive strategic framework on human rights and on the protection of minorities, including on transitional justice. Previous years’ recommendations remain outstanding. In the coming year, Bosnia and Herzegovina should in particular: ®implement court rulings to put an end to divided education; ®designate by law the Human Rights Ombudsman as preventive mechanism against torture and ill-treatment; ®ensure full respect, protection and promotion of freedom of assembly and expression, and refrain from further actions that adversely impact the exercise of these rights. Bosnia and Herzegovina has ratified all major European and international human rights instruments, most of which are included in its Constitution. There was no systematic follow-up to the 204 accepted recommendations from the November 2019 Universal Periodic Review. Despite not having observer status to the EU Agency for Fundamental Rights (FRA), Bosnia and Herzegovina is encouraged to replicate the agency’s methodology for data collection. The European Court of Human Rights (ECtHR) delivered 8 judgments concerning 19 applications in 2020 (down from 21 in 2019 and 6 in 2018) finding that Bosnia and Herzegovina had violated rights guaranteed by the European Convention on Human Rights (ECHR) in one case. The Court dealt with 2,059 applications concerning Bosnia and Herzegovina during 2020, bringing the total number of applications pending before the court to 530. There are three groups of cases under standard and enhanced supervisory procedure, concerning electoral rights, repossession of properties, and detention conditions for vulnerable persons. The Sejdić-Finci, Zornić, Šlaku, Pilav and Pudarić rulings require constitutional amendments to ensure the equality of political rights among all citizens; they have still not been implemented. Bosnia and Herzegovina has not taken any steps towards adoption of a comprehensive policy framework on the promotion and enforcement of human rights, including countrywide strategies on human rights, on non-discrimination, and on the protection of minorities. Consequently, the protection of human rights continues to be uneven across the country. Bosnia and Herzegovina still needs to amend the Law on the Human Rights Ombudsman in order to improve the independence and effectiveness of this body and designate it as national preventive mechanism against torture and ill-treatment – an international obligation of the country. The tripartite composition and consensual decision-making of the Ombudsman institution also still needs to be revised in the mid-term to ensure its effective functioning. In 2020, 2,716 complaints were registered by the Ombudsman (down from 3,218 in 2019). 270 recommendations were issued in 312 cases, down from 304 in 174 cases in 2019, partly due to the pandemic. The Ombudsman has not made use of its prerogative to open minor offence proceedings for non-compliance with its recommendations in the past 5 years nor has it initiated or intervened in administrative or judicial proceedings. As regards torture and ill-treatment, the Ombudsman received 92 complaints in 2020, down from 129 in 2019, and 144 in 2018, partly due to the pandemic, despite the option of online submission. Reports of ill-treatment of suspects and prisoners in police stations and detention facilities continued to be processed at a slow rate and only a few officers are punished. There is no countrywide strategy on the prison system, and no steps were taken to improve detention conditions, starting by harmonising the legislation across the country and bringing it in line with with European and international standards. The Federation entity still needs to adopt legislation on the execution of criminal sanctions to allow the inter-entity transfer of prisoners, staff professionalisation and a parole system. The State prison in East Sarajevo was opened in July 2020, three years after completion, and it is fully operational since December. Visits to inmates were suspended during the pandemic, save for defence lawyers. Digitalisation, reintegration programmes, and coordination with healthcare and social services require improvements. The country should further expand the use of alternatives to detention, in particular in the Republika Srpska entity. No steps were taken to adopt a state-level framework law clearly defining countrywide criteria on the rights of civilian victims of war-time torture in order to fulfil its pending obligations under the Convention against Torture. The country took preparatory steps to address the August 2019 decision of the UN Committee against Torture (UNCAT) related to provision of all forms of redress to victims of wartime torture via an effective reparation scheme. However, significant additional efforts are needed to ensure its implementation. In the meantime, entity governments should consider waiving court fees for victims of wartime torture to which statutes of limitations were applied in the past. Bosnia and Herzegovina still lacks a countrywide a policy framework for dealing with the legacies of the past, including a countrywide strategy on transitional justice, and no concrete steps were taken to promote an environment conducive to reconciliation in order to overcome the legacies of the war. Political leaders continued to engage in historical revisionism, including genocide denial and glorification of war criminals, also contesting established facts and the independence or impartiality of international and domestic tribunals. In April and June 2021, historical commissions financed by the Republika Srpska entity government issued their final reports, which open the door to revisionism and minimisation of the siege of Sarajevo and of the Srebrenica genocide. A plaque honoring Radovan Karadžić was removed from a student dormitory in Pale in December 2020. The Presidency also adopted a constructive joint declaration to mark the 25th anniversary of the Dayton Peace Agreement in December 2020, although they did not hold a joint commemoration of civilian victims of the war. In July 2021, outgoing High Representative Inzko used its executive powers to introduce a crime of denial of genocide and war crimes. Bosnia and Herzegovina leaders are expected to act in a sovereign manner to promote an environment conducive to reconciliation in order to overcome the legacies of the war. The continued unresolved issue of missing persons is a matter of concern. 6,377 people are still missing as a result of the conflict, of which 55 were identified in 2020, and 8 more by May 2021. Further efforts are needed on a regional scale to solve the issue. There was no progress in establishing a support fund for the families of missing persons, as provided for by the law, and improving the work of the Missing Persons Institute. No progress was made in aligning the legislation with the EU acquis on data protection. Bosnia and Herzegovina has signed Protocol 223 amending the Council of Europe Convention for the protection of individuals with regard to the automatic processing of personal data; ratification is pending. The Personal Data Protection Agency needs to be fully independent and have adequate human and financial resources; it should better balance the protection of privacy with objectives of general public interest, notably media freedom, electoral integrity, and the fight against corruption. The Agency conducted 101 procedures ex officio in 2020 (up from 66 in 2019). It received 168 complaints, conducted 36 inspections and issued 10 minor offence orders (compared to 131, 36 and 25 in 2019). 17 administrative proceedings against decisions of the Agency were pending before the Court of Bosnia and Herzegovina, compared to 21 in 2019. While the State Parliament has to consult the Agency on legislative proposals, other legislative assemblies are not required to do so. ----------------------------------------------------------------------------------------------------------------- Freedom of expression There is some level of preparation on freedom of expression. The country made no progress on addressing the Opinion key priority 12 on guaranteeing freedom of expression and of the media and the protection of journalists by ensuring the appropriate judicial follow-up to cases of threats and violence against journalists and media workers, and ensuring the financial sustainability of the public broadcasting system. Last year’s recommendations remain valid. The legislative framework needs to be aligned with European and international standards and fully enforced. Political influence over public broadcasters persists, and their financial sustainability has not been secured. The law on the public broadcasting system remains unimplemented and entity-level legislation is still not harmonised with this Law. Political pressure, intimidation and harassment towards journalists, including physical and verbal attacks continued during the reporting period, without appropriate institutional follow-up. In the coming year, Bosnia and Herzegovina should in particular:

®ensure the protection of journalists and a systematic institutional follow-up on threats and violence against them; ®ensure the financial sustainability and political independence of public broadcasters, and harmonise entity legislation with the state-level law on the public broadcasting system; ®adopt legislation on media ownership transparency and criteria on public advertising. Intimidation of journalists Serious concerns continue to persist over political pressure, intimidation and threats against journalists. High-level politicians have resorted to public attacks and disparaging remarks against journalists, analysts and media workers, particularly women. The authorities continue to downplay the issue and there is no data collection by public institutions on threats and attacks against journalists and media workers. The BH Novinari association recorded 69 cases of violation of journalists’ rights in 2020, up from 56 in 2019. The Ombudsman received 11 complaints, compared to 18 in 2019 and 9 in 2018. Authorities are expected to act swiftly and demonstrate zero tolerance for threats or attacks against the media, including by ensuring effective police investigations and judicial prosecution leading to final convictions of perpetrators. Legislative environment Despite the decriminalisation of defamation since 2002, politicians continue to use civil suits to intimidate journalists. Courts should step up their efforts to ensure an expedient processing of defamation cases and consistency of case law on damage awards, to prevent any chilling effect that would force journalists into self-censorship. The legislation on freedom of access to information and on on hate speech remains fragmented and not in line with international and European standards. The legal provisions on data protection and on access to information are still interpreted in a way that protects private rather than public interests. Implementation of legislation/institutions The Communications Regulatory Agency (CRA) still lacks full political and financial independence. The procedure to appoint the CRA management needs to be revised to improve its public perception as a neutral and independent body. The former head of the Republika Srpska’s public television, RTRS, was appointed as new CRA director in July 2020; the CRA had sanctioned RTRS multiple times during his mandate for non-respect of editorial standards, including for historical revisionist statements as regards the May 1995 massacre in Tuzla. Public service broadcaster The 2003 law on the public broadcasting system continues to be only partially enforced, and entity laws on broadcasting are still not aligned with it. Therefore, the three public broadcasting services continue to be exposed to political influence, in particular through politically controlled steering boards, with a worrying trend of self-censorship. The country continues not to have an appropriate model for collecting fees, as provided for by the law. The substantial unpaid debts of entity broadcasters towards the state-level broadcaster are subject to lengthy litigation. Such issues continue to pose a threat to the financial independence and sustainability of the public broadcasting system. Bosnia and Herzegovina also needs to proceed with the digital switchover, which is now overdue. With analogue transmission licenses expiring by end 2021, several local private and public stations risks seeing their broadcasts restricted, affecting access to information for the poorest residents in rural areas. (Also see Chapter 10 – Information so