EUROPEAN COMMISSION Brussels, 12.10.2022 SWD(2022) 336 final COMMISSION STAFF WORKING DOCUMENT Bosnia and Herzegovina 2022 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 2022 Communication on EU Enlargement policy































{COM(2022) 528 final} - {SWD(2022) 332 final} - {SWD(2022) 333 final} - {SWD(2022) 334 final} - {SWD(2022) 335 final} - {SWD(2022) 337 final} - {SWD(2022) 338 final}



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 2.2.1Chapter 23: Judiciary and fundamental rights 2.2.2Chapter 24: Justice, freedom and security 2.3. Economic criteria 2.3.1. The existence of a functioning market economy 2.3.2. The capacity to cope with competitive pressure and market forces within the Union 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 - Digital transformation 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 II – 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 14 key priorities set out in the Commission Opinion of May 2019 which covers democracy/functionality, the rule of law, fundamental rights, and public administration reform. This is required for the Commission to recommend opening 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’s implementation of the 14 key priorities . In June 2022 the European Council expressed its readiness to grant the status of candidate country to Bosnia and Herzegovina and to that aim it invited the Commission to report on the implementation of the 14 key priorities set out in its Opinion with special attention to those which constitute a substantial set of reforms in order for the European Council to revert to decide on the matter. The Commission will continue to monitor Bosnia and Herzegovina’s implementation of the 14 key priorities and report based on further progress on the ground (also see Annex I). Bosnia and Herzegovina continues to implement the Stabilisation and Association Agreement (SAA) which, together with its Interim Agreement applied since 2008, has enabled progressive trade liberalisation with the EU and mutual duty-free access for most goods. The public commitment of political parties to the strategic goal of European integration has been further confirmed in Brussels in June 2022 in a political agreement on principles for ensuring a functional Bosnia and Herzegovina that advances on the European path, in line with the 14 key priorities set out in the Commission Opinion. Yet, for most of the reporting period this commitment was not turned into concrete reform actions. Deep political polarisation and disagreement among the main parties of the ruling coalition led to a standstillin the work of the democratic institutions and on reforms on the EU path. Until spring 2022 political parties based in the Republika Srpska entity blocked legislative and executive institutions at state level and adopted initiatives to unilaterally take over state competences at entity level, in breach of the constitutional and legal order; the same parties also obstructed the implementation of EU restrictive measures on Russia with which Bosnia and Herzegovina had formally aligned. Institutions started to return to functioning in Spring 2022, and some steps were taken afterwards to start address the backlog of reforms. Political parties did not agree on constitutional and electoral reforms. Parliament rejected the integrity package on electoral standards, which were later imposed by the OHR. Parliament also rejected rule of law reforms, including on conflicts of interest and on integrity in the judiciary, which remain pending and are expected to be adopted following the re-initiation of the legislative procedure by the Ministry of Justice. The High Representative for Bosnia and Herzegovina (OHR) resorted four times to its executive powers, including on electoral standards and financing. The policy dialogue with the EU was also blocked until June 2022, as the joint bodies under the SAA could not meet. Bosnia and Herzegovina adopted the state budget only in July 2022 after an 18-month delay. In August 2022 the Parliament amended the public procurement law, an important step contributing to addressing key priority 7. Bosnia and Herzegovina joined the Union Civil Protection Mechanism as a full member in September 2022. Bosnia and Herzegovina received the first instalment of EUR 125 million in favourable macro-financial assistance loans from the Commission in October 2021. The disbursement of the second instalment was cancelled in June 2022 because the country did not implement the agreed policy conditions. The country is the only one in the Western Balkans that did not introduce a countrywide COVID-19 certificate, equivalent to the EU Digital COVID-19 Certificate (EU DCC). 1.2. Summary of the report As regards political criteria, parties based in the Republika Srpska entity blocked state-level legislative and executive institutions until spring 2022, leading to an almost complete standstill in reforms during that period. The Federation entity government remained in office for the full 2018-2022 term in a caretaker capacity. During a significant part of the reporting period, the Republika Srpska entity pursued to unilaterally take over state competences (including on taxation, the judiciary, defence and security) and dismantle state institutions, endangering the country’s EU accession perspective as set out in the Commission Opinion. Some legislative steps were taken to withdraw the Republika Srpska entity from key state bodies and set up parallel bodies at entity level; these laws are suspended and under constitutional review. Parliamentary parties could not agree on a solution for constitutional and electoral reforms to bring the Constitution in line with the European Convention on Human Rights, complying with the Sejdić-Finci and related rulings, despite an intense facilitation of talks by the EU and US. Amendments to improve electoral standards were rejected in Parliament. A number of Constitutional Court decisions have yet to be fully enforced. The Council of Ministers took no steps to develop a national programme for the adoption of the EU acquis. Due to political obstruction, the Ministry of Finance and Treasury hindered the smooth organisation of the October 2022 elections by withholding the required funds. General elections took place on 2 October; according to the preliminary findings of OSCE/ODIHR, they were overall competitive and well organised but marked by mistrust in public institutions and ethnically divisive rhetoric. On the same day, the High Representative imposed significant amendments to the constitution of the Federation entity and to the Bosnia and Herzegovina election law, aimed at addressing a number of functionality issues and the timely formation of authorities. No progress was made in ensuring an enabling environment for civil society. Republika Srpska entity authorities and parties advocated for a neutral stance on Russia’s aggression against Ukraine, contesting the country’s alignment with EU statements and obstructing the full implementation of restrictive measures against Russia. The Presidency ratified several international agreements, including on IPA III, Horizon and Creative Europe, and the Union Civil Protection Mechanism. Bosnia and Herzegovina is at an early stage of preparation and made limited progress on public administration reform (PAR). Notably, positive steps were taken in the area of public finance management: (i) a comprehensive and countrywide public finance management (PFM) strategy was adopted, which now needs to be implemented; (ii) each level of government started implementing PFM strategies; (iii) state institutions improved some professional trainings; and (iv) and the Federation entity amended its administrative procedures. However, the lack of a political decision-making body to steer PAR and insufficient implementation of the action plan and capacities to promote the PAR agenda undermine the well-functioning of the public administration across all levels of government. Civil service laws are not harmonised with each other and with merit principles, while monitoring on human resource management does not allow to check on any irregularities. In line with Opinion’s key priority 14, the country needs to complete essential steps on public administration reform by ensuring a professional and depoliticised civil service and a coordinated countrywide approach to policy-making, while establishing a political decision-making body to steer PAR. Bosnia and Herzegovina is at an early stage of preparation as regards its judiciary. No progress was made in this area over the reporting period. The independence and impartiality of the judiciary did not improve. Executive and legislative authorities failed to adopt additional safeguards. Inconsistency and overly broad discretion persist in applying the rules on appointment, disciplinary responsibility, career advancement and conflict of interest of judges and prosecutors. The Chief Prosecutor of Bosnia and Herzegovina and the chief prosecutor of Republika Srpska were demoted on account of disciplinary offences during the reporting period. The Parliament rejected the amendments on integrity to the law on the High Judicial and Prosecutorial Council (HJPC) that would create a credible and rigorous system for verifying the financial statements of judicial office holders. The Republika Srpska entity launched a legislative initiative to set up a separate judicial and prosecutorial council at entity level; if adopted, it would violate the legal and constitutional order. Urgent measures are needed to restore public trust in the judiciary and strengthen its integrity. The lack of political commitment to judicial reform 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 of and fight against corruption and organised crime. No progress was made in this area over the reporting period. The Parliament rejected a law on conflict of interest. Political leaders and judicial institutions failed to tackle widespread corruption and actively blocked progress, leading to long-term stalling and increasing signs of political capture. The continued lack of progress at all levels increases the risk of backsliding. Political leaders and judicial institutions need to urgently remedy the situation. Although in the reporting period there have been some indictments pertaining to high-level corruption sentences, the overall track record on preventing and repressing corruption (including at high level) remains insignificant, due to operational inefficiency and political interference. There are systemic shortcomings in the operational cooperation between law enforcement agencies fighting organised crime, due to non-harmonised criminal legislation, weak institutional coordination, and a very limited exchange of intelligence. Criminal organisations operating in the country take advantage of legal and administrative loopholes. The police are vulnerable to political interference. Financial investigations and asset seizures are also largely ineffective. A proactive approach remains fundamental to countering criminal infiltration in the political, legal and economic systems. The contact point for cooperation with Europol is still not operational; preparatory steps are underway. There is no systematic cooperation with Eurojust. Bosnia and Herzegovina needs to continue its efforts in the fight against terrorism and drug trafficking and increase its capacity to do so. A new law on anti-money laundering and terrorism financing in line with the EU acquis needs to be urgently adopted. While the legislative and institutional framework on fundamental rights is largely in place, there is no comprehensive strategic framework. Adopting action plans for the social inclusion of the Roma in April 2022 and on the rights of LGBTIQ persons in July 2022 are positive steps in this regard. Significant reforms are still 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 to guarantee freedom of expression and of the media by protecting journalists from threats and violence and ensuring the financial sustainability of the public broadcasting system. Challenges persist as regards freedom of assembly, particularly in the Republika Srpska entity. Bosnia and Herzegovina has taken significant steps to improve migration management. The Ministry of Security continued efforts to improve coordination with local authorities and boosted international cooperation. However, major weaknesses still undermine the provision of necessary assistance. Bosnia and Herzegovina needs to urgently adopt the strategy and action plan on migration, step up efforts to ensure access to asylum, and strengthen border management. As regards economic criteria, Bosnia and Herzegovina is at an early stage of establishing a functioning market economy. Cooperation and coordination of economic policymaking at state level and among the entities have further deteriorated. As a result, the country’s internal market remains fragmented. The country’s Economic Reform Programme does not contain sufficient credible countrywide measures to address the major structural economic challenges. These relate to the business environment, the informal economy, public enterprises, the green and digital transitions and unemployment. Overall, the country’s economic performance remains below its potential, as policymaking is hindered by political stalemate, an overly short-term orientation, and no focus on policy measures to build growth. Bosnia and Herzegovina remains at an early stage in terms of capacity to cope with competitive pressure and market forces in the EU and did not make significant progress in this area. The quality of education has remained low, while insufficient action was taken to improve the transport and energy infrastructure. The trade and transport sectors both grew in terms of their relative economic importance (in value-added terms) as a response to strong external demand, while the size of the public sector in the economy was slightly lower by the same measure. Bosnia and Herzegovina is at an early stage/has some level of preparation in its ability to take on the obligations of EU membership. The country needs to significantly step up alignment with the EU acquis and implement and enforce the necessary legislation. Limited to no progress was made on the different EU acquis chapters during the reporting period. Bosnia and Herzegovina has some level of preparation and made some progress in the area of public procurement as amendments adopted in August have further aligned the legislation with the EU acquis. This is a first important step on the commitments taken on 12 June and contributes to address key priority 7. There was limited progress was made on statistics; preparations for the next census have hardly progressed and the production of macroeconomic statistics continues to deviate from the EU acquis. Some progress was made on public internal financial control, with both entities adopting strategies. Major steps are needed to align the legal framework across the country with the EU acquis on the internal market (free movement of goods, workers, services and capital, company law, intellectual property, competition policy, and financial services, consumer and health protection). Bosnia and Herzegovina made limited or no progress in this cluster. Procedures and legislation that differ between the entities create obstacles to competitiveness and growth. Bosnia and Herzegovina should bolster financial stability by improving coordination among the relevant authorities and setting up a financial stability fund as part of the bank resolution framework. This cluster is key for Bosnia and Herzegovina’s preparations to meet the EU single market requirements and is very important for early integration with and the development of the Common Regional Market.

Bosnia and Herzegovina made limited or no progress in most areas of competitiveness and inclusive growth (taxation, digital transformation and media, social policy and employment, enterprise and industrial policy, science and research, education and culture) and some progress in the area of customs union. The country showed backsliding in other areas (economic and monetary policy) 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. Bosnia and Herzegovina needs to introduce socio-economic reforms to address structural weaknesses (including low competitiveness and high unemployment), and the impact of the COVID-19 pandemic. Bosnia and Herzegovina made some or limited progress in the green agenda and sustainable connectivity cluster, where the country is at an early stage on energy, environment and climate change. The country has some level of preparation in the areas of transport and of trans-European networks. Further steps are needed on connectivity reform measures and in aligning with the Trans-European Transport Network (TEN-T) and Trans-European Networks for Energy (TEN-E) Regulations. The green transition and sustainable connectivity are key to economic integration within the region and with the EU. The implementation of the Economic and Investment Plan and the Green Agenda for the Western Balkans, needs to be accelerated. Bosnia and Herzegovina significantly improved its civil protection system and showed a clear commitment in the area of disaster management; in September 2022 the country joined the Union Civil Protection Mechanism (UCPM) as a full member. Bosnia and Herzegovina made no progress in the areas of 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. The country must step up its efforts to prepare and adopt a post-2021 countrywide strategy for rural development, align its legislation on food safety, veterinary and phytosanitary policy and strengthen its administrative capacities. More efforts are also needed to prepare and adopt a countrywide strategy on fisheries and aquaculture and harmonise data collection. Furthermore, Bosnia and Herzegovina should start preparing a countrywide regional development strategy. Bosnia and Herzegovina has some level of preparation and made some progress in the cluster on external relations, in particular by improving its alignment with EU foreign policy statements and restrictive measures, which increased to 81% by end August 2022. The country needs to implement the additional protocols to the Central European Free Trade Agreement (CEFTA) on trade facilitation and trade and services, and swiftly adopt the additional protocol on dispute settlement. Bosnia and Herzegovina continued to actively participate in regional cooperation and to maintain good neighbourly relations. In 2021, Bosnia and Herzegovina benefited from EUR 73 million under the Instrument for Pre-accession Assistance 2021 – 2027 (IPA III), providing support to programmes in migration and border management, the electoral process, energy, transport, employment and social protection, as well as private sector and regional development. This first set of programmes, complemented by a package of multi-country programmes, significantly contributes to kick-starting the implementation of the Economic and Investment Plan for the Western Balkans and the Green Agenda. Adopting countrywide sector strategies remains a key requirement for Bosnia and Herzegovina to benefit fully from IPA funding in the future. 2. Cluster 1: The Fundamentals of the Accession Process 2.1. Functioning of democratic institutions and Public Administration Reform 2.1.1 Democracy During the reporting period, the political environment was marked by deep polarisation and obstructions, which gravely affected the functioning of state institutions and their capacity to adopt the reforms needed to fulfil the Opinion key priorities and advance on the EU path. Institutions started to return to functioning in Spring 2022, but the backlog of reforms has not been addressed. In the political agreement they signed in Brussels on 12 June 2022, party leaders committed to an ambitious agenda of reforms, in line with the 14 key priorities, to advance decisively on its EU path following the 2 October general elections. No state budget was adopted in 2021, and in 2022 the budget was only adopted on 30 June. State institutions have been funded via three-monthly temporary financing decisions for 18 months, during which they have been unable to make investments, since available funds are shrinking in real terms, and to recruit and retain sufficient and qualified personnel. In July 2021, political parties based in the Republika Srpska entity decided not to participate in decision-making at state level, effectively blocking all political institutions (Presidency, Council of Ministers and Parliamentary Assembly) for most of the reporting period. There was backsliding on key priority 4, which calls among others to ensure legal certainty on the distribution of competences across levels of government. In December 2021, the Republika Srpska entity adopted a plan to unilaterally take over state competences, in breach of the constitutional and legal order. In February 2022, the entity adopted a law on immovable property; the High Representative suspended its entry into force in April 2022, pending constitutional review; the entity leadership committed to enforce it anyway, which would endanger legal certainty. An entity law on medicines and medical devices, adopted in October 2021, came into force in late June; its application was suspended by the Constitutional Court in July. A draft law on an entity-level judicial and prosecutorial council, in breach of the constitutional and legal order, is in parliamentary procedure in the Republika Srpska entity; its adoption would further jeopardise the independence of the judiciary. In May 2022 the Constitutional Court confirmed that entities have no right to unilaterally withdraw consent from agreements to transfer specific competences to the state level. The Federation government completed one full additional term in a caretaker capacity. Women remain under-represented at all levels of participation and decision-making. Elections No progress was made towards addressing Opinion key priority 1 on electoral standards. Despite intense facilitation, political parties were unable to agree on reforms to bring the Constitution and electoral framework in line with the European Convention on Human Rights. While the Central Electoral Commission introduced some improvements via by-laws, the Parliament did not adopt amendments to the election law to address outstanding recommendations by OSCE/ODIHR and GRECO, including as regards transparency of political party financing. In May 2022 the Central Election Commission announced general elections for October 2022. Due to political obstruction, the Ministry of Finance and Treasury hindered the smooth organisation of the October 2022 elections by withholding the required funds. On 6 June 2022, with executive powers, the High Representative allocated the required budget to the Central Electoral Commission and amended the electoral law and the law on the financing of state institutions to prevent such blockages in the future. In January and May 2022 the Central Election Commission adopted by-laws addressing some recommendations by OSCE/ODIHR and GRECO, including on transparency on party financing (including on transparency of campaign costs and sanctions for breaches) and integrity of the voter registration process abroad. No steps were taken to harmonise the legislation on the registration of political parties across the country. The inter-agency working group on electoral reforms (IAWG) was unable to endorse draft amendments to address the recommendations by OSCE/ODIHR and GRECO. A set of amendments, prepared with EU and OSCE/ODIHR support to improve the integrity and transparency of the electoral process, was submitted to parliament in April 2022 but was rejected. On 27 August, the High Representative imposed amendments to the election law with the aim to improve the integrity of the electoral process and strengthen the role of the Central Election Commission. Between July 2021 and March 2022 the EU and US, with the support of the Venice Commission, facilitated talks among political parties on a package of electoral and constitutional reforms to improve electoral standards, remove ethnic and residence-based discrimination from the Constitution in line with European Court of Human Rights (ECtHR) rulings, provide a new electoral model for the Presidency, and reform the constitution of the Federation entity to improve its functionality. Despite intense facilitation, parties proved unable to find a solution in line with European standards ahead of the 2022 elections. General elections took place on 2 October; according to the preliminary findings of OSCE/ODIHR, they were overall competitive and well organised but marked by mistrust in public institutions and ethnically divisive rhetoric. On the same day, the High Representative imposed significant amendments to the constitution of the Federation entity and to the Bosnia and Herzegovina election law, aimed at addressing a number of functionality issues and the timely formation of authorities.

A Citizens’ Assembly of randomly-selected citizens presented their recommendations for constitutional changes, based on a deliberative democracy approach, in March 2022. In August 2022, the Court of Bosnia and Herzegovina confirmed in appeal that the parliament had acted in line with the law when appointing members of the Central Election Commission (CEC) in March and May 2020. The CEC needs to strengthen its audit capacity to monitor compliance on political party financing. As regards internal party democracy, political parties lack democratic internal policies and structures. There are no women among party leaders, and few in other leadership positions. Parliament The political blockade by the Members of Parliament elected in Republika Srpska brought to a halt all legislative activities for most of the reporting period. Parliamentary oversight over the executive remains weak at all levels of government. No improvement was made on registration and financing of political parties. The Stabilisation and Association Parliamentary Committee did not meet during the reporting period (Opinion key priority 3). Members of Parliament (MPs) elected in Republika Srpska blocked the work of the Parliamentary Assembly of Bosnia and Herzegovina from July 2021 till March 2022. Coupled with no legislative initiative from the Council of Ministers, this resulted in very poor legislative output, despite the outstanding backlog. The parliament adopted only the law on customs offenses in May 2022, in urgent procedure, and the law on the protection of the right to trial within a reasonable time before the Court of Bosnia and Herzegovina, as well as the amendments to the public procurement law. The parliamentary oversight of the executive was equally crippled. A positive exception is the interim investigative committee on the state of the judiciary of the House of Representatives which, despite delays due to the political blockage, published its findings in June 2022. There is no parliamentary monitoring of compliance with the recommendations of independent institutions, and of their annual reports. The Stabilisation and Association Parliamentary Committee (SAPC) did not meet in the reporting period. Bosnia and Herzegovina needs to fully ensure the proper functioning of the SAPC, notably with the adoption of recommendations, in line with Opinion key priority 3. Entity parliaments met regularly, making large use of urgent procedures. In 2021, the Parliament of the Federation entity adopted 8 laws in urgent and 15 in shortened procedure out of 29 (76%). In 2021, the assembly of the Republika Srpska entity adopted 66 laws, of which 41 (62%) in fast-track procedures, including the budget. The Brčko District Assembly adopted 44 laws, of which 7 (16%) 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. Such a committee is in place in the Brčko District. In May 2022 the Republika Srpska assembly started the procedures to replace one judge of the Constitutional Court of Bosnia and Herzegovina whose term expires by end of 2022 due to age limits. The House of Representatives of the Federation entity failed to timely replace a constitutional judge whose term expired in August 2022. The Federation Parliament has not filled the vacancies at the Steering Board of the public broadcaster FTV nor appointed a director of FTV since 2013. Governance The Council of Ministers was dormant for most of the reporting period due to the political blockade. The Presidency was marred by continued lack of consensus on key issues. The government of the Federation entity and of one canton remained in caretaker capacity for the whole 2018-2022 term. 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 on the functioning of the coordination mechanism and on developing and adopting a national programme for the adoption of the EU acquis (Opinion key priority 2), nor on the action plan on the 14 key priorities. The Presidency members continued to take opposite stances, most notably on foreign policy, thus failing to provide a clear political direction to the country. The ‘vital entity interest’ of Republika Srpska was raised against Presidency decisions on October 2021, March and June 2022, but the entity assembly did not confirm the veto in March and June. The Presidency mainly endorsed international and financing agreements, including on IPA III, Horizon Europe and Creative Europe, and the Union Civil Protection Mechanism (UCPM), albeit often after long delays. The Council of Ministers had a minimal legislative output, adopting only three draft laws (on customs offenses and on the state budget) and a set of amendments (to the law on the High Judicial and Prosecutorial Council). It adopted several strategic documents including the Economic Reform Programme 2022-2024. The Council of Ministers adopted a budget proposal only in June 2022, thus leaving state institutions to rely only on three-monthly temporary financing decisions for 18 months. In October 2021 the parliament did not support the initiative of the Chair of the Council of Ministers to dismiss the Minister of Defence. Entity and cantonal governments worked regularly in the reporting period. The Federation government completed a four-year additional term in a caretaker capacity, reduced from 16 to 13 ministers and with its prime minister and deputy standing trial for corruption. The Herzegovina-Neretva Canton also completed the 2018-2022 term with a caretaker government. A number of appointments at state level are pending due to political disagreements. These include the directors of the Directorate for European Integration, the Indirect Taxation Authority, the Civil Service Agency, the Border Police, the Directorate for Coordination of Police bodies and the Intelligence and Security Agency, as well as five members of the governing board of the Central Bank, and seven members of the Board of the Communication Regulatory Agency. 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. With only 3 judges out of the 7 required, the court’s panel on ‘vital national interest’ vetoes is not able to function. The members of the securities commission of the Federation entity were only appointed in September 2021, after over a year not functioning. No steps were taken to develop and implement a common action plan of socio-economic reforms in line with Commission recommendations 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. There was backsliding in the coordination on EU matters due to political obstruction and increased questioning of EU key priorities by the Republika Srpska entity.

The policy dialogue with the EU was completely stalled during the reporting period. The joint bodies – whose role is to monitor and provide guidance on the implementation of the SAA and related reforms – did not meet from July 2021 till June 2022, since the Council of Ministers failed to adopt the preparatory documents as required by domestic procedures. This marked backsliding in implementing the SAA. The country submitted its Economic Reform Programme (ERP) only in March 2022, with two months of delay. Coordination on EU matters, including in the development of countrywide sector strategies, is essential to ensure harmonised alignment with the acquis and to access EU financial assistance and EU programmes. This requires effective use of applicable legislation on coordination of EU matters and commitment of the coordination mechanism structures at political level (collegium and ministerial conferences). The requirement of political endorsement by the Council of Ministers of all technical preparatory documents for the meetings SAA has prevented the holding of meetings of SA bodies from June 2021 till June 2022. The Council of Ministers should take measures to facilitate dialogue within the SAA bodies at all levels, including empowering the Directorate for European Integration (DEI) to directly submit technical preparatory documents to the Commission, and appointing the permanent delegates to sectoral subcommittees. As a key priority and outstanding obligation under the SAA, Bosnia and Herzegovina needs to develop a national plan for the adoption of the acquis (NPAA) / Programme for EU Integration (PI) that reflects the role that all levels of government play in aligning with and enforcing the EU acquis. SAA obligations and other EU requirements should be duly included in the NPAA and in the corresponding annual work programmes of all levels of government. Bosnia and Herzegovina needs to develop the NPAA and agree upon it with the Commission. The action plan on the 14 key priorities is still pending adoption by the Council of Ministers, due to obstruction by the Republika Srpska entity. (See also under Public Administration Reform) Authorities across the country have little capacities for coordination and policy planning, including on EU matters. There is no strategy on local self-government in either entity. Anti-corruption offices have been established in several cantons and Brčko District. Civil society No progress was made in addressing the Opinion key priority 11 on ensuring an enabling environment for civil society, notably by upholding European standards on freedom of association and freedom of assembly. 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. An empowered civil society is a crucial component of any democratic system and should be recognised and treated as such by public institutions. While the overall legal and regulatory framework governing establishment and functioning of civil society organisations is broadly in line with the EU acquis, much remains to be done for public institutions to ensure an enabling environment for civil society, including on freedom of association and of assembly, in line with Opinion key priority 11. (see also Chapter 23 – Fundamental Rights) 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. The advisory body of the Council of Ministers for civil society organisations held two working sessions in 2021. (see also under Public Administration Reform) Grassroot organisations proactively advocated for policy changes. Activists dealing with issues perceived as sensitive (anticorruption, women’s rights, rights of LGBTIQ persons, migrants, the environment) continued to be subject to threats, abuse and physical attacks. Civil society organisations also provide services to disadvantaged groups, in substitution to public authorities. These activities were hampered by restrictions of movement during the pandemic, which also affected their financial sustainability. Available public fuding decreased during and after the pandemic, and civil society organisations have not been eligible for economic recovery measures reserved to the private sector. A framework for the transparent and impartial distribution of public funds to associations remains needed across the country. There is no state-level legal framework on volunteering, which is regulated by the entities and Brčko District. Civilian oversight of the security and intelligence sector The Parliamentary Assembly’s joint committee on defence and security held 3 sessions in 2022 (6 in 2021, 10 in 2020). 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; after he was acquitted in a trial for abuse of power, a new investigation is ongoing against the OSA Director for abuse of office, document forgery, and money laundering. 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 defence personnel, opened 79 proceedings in 2021, completing 73 of them. 2.1.2. Public Administration Reform Bosnia and Herzegovina is at an early stage and made limited progress in public administration reform. Notably, positive steps were taken in the area of public finance management: (i) a comprehensive and countrywide public finance management (PFM) strategy was adopted, which now needs to be implemented; (ii) each level of government started implementing PFM strategies; (iii) state institutions improved some professional trainings; and (iv) and the Federation entity amended its administrative procedures. However, 4 years after adoption, implementation of the PAR action plan is lagging behind particularly on building a professional civil service capable of effectively delivering services to citizens and businesses. Civil service laws remain not harmonised with each other and merit principles not enshrined in all recruitment procedures, while the monitoring of human resources is not effective to detect irregularities. A political decision-making body to steer PAR still needs to be set up to effectively steer reforms. Therefore, last year’s recommendations remain largely valid. In line with Opinion key priority 14, Bosnia and Herzegovina needs to complete essential steps to improve the overall functioning of the public administration by ensuring a professional and depoliticised civil service and a coordinated countrywide approach to policy making. In the coming year, Bosnia and Herzegovina should in particular: ®implement the countrywide strategic framework for public financial management 2021-2025 at state level and extend the validity of the current PAR strategic framework to 2023-2027 at the state level and in the Federation entity, and finalise and adopt e-government strategies at the state level, and in the Federation entity and Brčko District; ®establish a functioning coordination structure with a political decision-making body and improve the capacity of PAR coordinators to steer implementation of public administration reforms across all levels of government; ®ensure a professional civil service system, by amending civil service laws in line with merit principles and establishing a performance-based monitoring for transparent human resource management at all levels of government to detect irregularities; ®foster a user-oriented administration by developing a coherent policy framework on service delivery and related e-signature infrastructure at all government levels in order to simplify and modernise administrative procedures and digitise services for businesses and citizens. Strategic framework for public administration reform The strategic framework on public administration reform (PAR SF) 2018-2022, and the related PAR action plan 2020-2022, needs to be extended due to weak implementation in the period of its validity between 2018-2022. Four years after its adoption in 2018, no systematic implementation of the PAR action plan has started yet, and there is no information on financing gap and no performance-based monitoring. The Federation entity adopted in April 2022 the communication strategy of the public administration reform process and related action plan for the period 2021-2022. Insufficient political support continues to hinder the coordinated implementation of reforms by all levels of government. The country has yet to set up a political decision-making body to steer reforms and the capacity of PAR coordinators at a technical level need to be strengthened. A coordination arrangement to ensure such political and technical cooperation needs to be urgently adopted. The financial sustainability of the reform is not ensured, and reforms remain mostly donor-driven. 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 and regulated through different laws. There is no link between sectoral policy priorities and government priorities at all levels. Sectoral costs, while not always reflected in strategies, are not linked to a medium term budgetary framework. A legal basis on strategic planning is in place in both entities but is missing at the state level. There was no progress in developing methodological guidance for countrywide sectoral strategic planning: this requires harmonising central planning documents, framework budgets and countrywide sectoral strategies across levels of government. Some quality criteria for sectoral policies are in place, but they do not contain information on progress and objectives. Publication of government and sectoral monitoring reports is very limited, and quality of costing across sectoral strategies is weak, despite legal obligations set across all levels. Bosnia and Herzegovina did not yet develop its first National programme for the adoption of the acquis (NPAA), i.e. programme of EU integration (PI). The country did not meet its own deadline to finalise and adopt the PI by the end of 2021, as set out in the methodology adopted in 2020 (see more in section 2.1.1 – Governance). The legal framework for inclusive and evidence-based policy development is in place but inconsistently implemented. Regulatory impact assessments are not used to prioritise policy proposals. Financial implications are still not systematically calculated across sectors, and the collection and use of administrative data for policymaking are not ensured. Although in place, the legal framework on public consultations needs to be consistently applied at all levels of government. Line ministries must boost their capacity to conduct regulatory impact assessments and public consultations in legislative planning, and improve the oversight function to ensure their quality. (see more in the section 2.1.1 – Civil Society)

The regulatory framework for standards for monitoring and reporting on key government planning documents at all levels has not improved, and this hampers public scrutiny of government work. In addition to integrating public consultations in legislative planning, more work is needed to raise awareness about different types of public consultations, and strengthen capacity at all levels of government so that they are used more regularly. Public financial management All levels of government in Bosnia and Herzegovina adopted a comprehensive strategy for the reform of public financial management (PFM) in June and July 2022. Each level of government started implementing their own PFM strategy for 2021-2025; PFM monitoring reports for 2021-2022 are being prepared, but have not been published yet. The Federation entity amended and adopted the Law on budgets in March 2022 with the aim to apply programme-based budget model as of 2025. The Republika Srpska entity adopted a new Fiscal Law in February 2022 to improve the fiscal system and reduce the informal economy. In December 2021, the Republika Srpska entity adopted the 2021-2024 medium term debt management strategy, joining other levels of government, that already have one in place for 2021-2023. More action and high-level political support are needed to improve public investment management at all levels. Line ministries remain significantly under-resourced and understaffed. Institutions at all levels lack suitable and effective internal control systems, especially for public procurement, and monitoring public companies. A functional and regular budget planning cycle is required for an effective public finance system. (See also Chapter 5 and Chapter 32). Bosnia and Herzegovina has not yet achieved sufficient budget transparency, although in 2021 state institutions and entities published their respective citizens’ budgets online. The lack of harmonisation of the charts of accounts at state and entity level makes it difficult 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 still need to be adopted. Bosnia and Herzegovina’s state institutions relied on 3-monthly temporary financing decisions for 18 months until a state budget was adopted at the end of June 2022. Public service and human resources management The merit-based recruitment, promotion and dismissal of civil servants with objective criteria are not fully ensured, particularly in the entities and the Brčko District. Some cantons such as Tuzla have improved their legislation on the principle of merit. However, in its proposed legislative reforms, the Federation entity needs to ensure the merit principle is applied across all civil service procedures, particularly in recruitment. As civil service reform is a shared competence between the Federation and cantons, their cooperation is key to harmonise civil service legislation; establishing a suitable coordination mechanism for human resources and civil service would support that cooperation. The recruitment process needs to become more transparent and better ensure the professionalisation of civil service; this has been helped to some extent by digitalisation of state-level recruitment. However, this objective is hampered by the excessive discretion allowed by the civil service laws in the entities and Brčko District, which notably do not prescribe appointing the best candidate to the post, allowing political appointees to influence the recruitment process, particularly at senior positions. As a result candidates are often selected without applying merit principles, and in certain recruitment procedures, particularly at cantonal level, the final selection depends on ethnic background rather than merit. The system needs more improvements to offer the right incentives so that more professional candidates apply for public sector positions, and selection commissions should be free from political influence, to guarantee recruiting the best qualified candidates. Constitutional provisions on the general representation of the population in the public administration should not be interpreted as requiring strict ethnic proportionality in the civil service, and the legislation should make sure that ethnic criteria do not prevail over professional criteria in recruitment. The criteria for dismissals disciplinary procedures and appeals set out in the legislation are still insufficiently applied. The appeal boards in the Federation entity face a significant backlog as they manage the civil service at entity, cantonal and municipal level and they remain highly inefficient in dealing with civil servants’ complaints. There is no systematic promotion of gender equality in the civil service, and the representation of women in top management varies from only 19% in the Republika Srpska entity to 41% in the state institutions. Human resources management (HRM) remains highly fragmented. Civil service laws have not yet been amended to provide a clear and comparable scope of the civil service. The laws also do not clarify which institutions are included in the civil service, which positions belong to civil servants, and what are the senior and middle management categories. These differences undermine mobility of civil servants across government levels. The common HRM development policy has yet to be implemented and there is no coordination among civil service agencies and ministries of justice to set common standards in HRM. Civil service agencies also need to harmonise their approaches to HRM. The Federation entity adopted a new HRM policy, and set up a HRM network to implement it, composed of entity and cantonal representatives. Transparent monitoring of HRM performance is weak across all levels of government and data is also lacking at all levels. Bosnia and Herzegovina needs to revise the State-level civil service law in order to provide a legal basis for the human resource management information systems (HRMIS) and make it functional for the civil service. All levels of government should publish HRM monitoring reports and ensure interoperability of HRMIS with payroll databases. Civil servant’s remuneration remains inconsistent across public institutions and lacks transparency. This is due to the differences across the country in salary legislation, job classification, pay grades, and the lack of job evaluations; which hinder fairness. Furthermore, criteria to award salary supplements are unclear, and there is no basic information or statistics on salaries. There is no information published at any level of government on average salary levels by job category. The state budget adopted in June 2022 will lead to an increase in the salary base of state-level civil servants. The lack of a job evaluation system undermines the fairness of job classification and the allocation of basic salaries on which it is based upon. Civil service agencies need more resources for training and professional development. Some progress was made in establishing the legislative and policy framework for training and performance appraisal, particularly in the Federation entity, and providing more trainings at state level, particularly for managers. A performance appraisal system is in place but not used properly and systematically to justify promotions. There was no progress in setting up a coherent system to guarantee civil servants’ rights to fair performance appraisal, promotion and training. There are no systemic and consolidated data on the integrity of civil servants. While all levels of government have a code of ethics, the Brčko District still has to align its own with the civil service law. The public’s perception of corruption among public officials remains high. The Federation entity still needs to adopt legislation on whistle-blower protection, and the Republika Srpska entity’s legislation on declaration of assets is also pending; such legislation should be aligned with international standards at all levels of government. Measures to promote integrity in the public service are only partially in place and are not systematically applied. Accountability of administration No progress was made to set out in legislation the different functions of administrative bodies at all levels of government or the conditions for establishing, merging or abolishing them. This leaves excessive discretion to managers to restructure the administration without considering the rationale and cost-effectiveness of such changes. There is still no clear supervision or reporting lines between ministries and subordinated institutions. The political level does not sufficiently delegate decision-making to senior civil servants or middle management. (see also Chapter 32) Recommendations from oversight mechanisms such as parliamentary scrutiny and independent institutions, such as the State Audit Institution and the Human Rights Ombudsman are still poorly implemented. Several institutions do not even respond to recommendations addressed to them; although they are legally obliged to do so. This compromises citizens’ rights to good administration. Legislation on the right to access to information remains fragmented and not in line with international and European standards. Ruels on data protection and on access to information are still interpreted in a way that protects private interest rather than public interests. The enjoyment of the right to access public information remains inconsistent. The Ombudsman reported a third more complaints on access to information in 2021, and the compliance with their recommendations on access to information increased from 41% in 2020 to 58% in 2021. The varying efficiency of courts across the country make citizens’ rights to administrative justice uneven. Effective remedies for the excessive length of judicial proceedings are not yet ensured at all levels of government, although in June 2022, a law to protect the citizen’s right to trial within reasonable time was adopted at the state level. There is also no systemic collection of data on the citizens’ right to seek compensation for damage caused by unlawful actions or omissions of the public administration. (see also Chapter 23) Service delivery to citizens and businesses The legal framework for a user-oriented administration varies substantially across the country. While the PAR strategy includes a policy framework for citizen-oriented service delivery, only the Republika Srpska entity has developed a digital service delivery strategy. However, it faces challenges in implementing it due to a lack of financial resources. As there are no institutional functions on service delivery at any level of government, there is no systematic monitoring of service delivery performance and no catalogues of services. Digitalisation has only advanced in taxes and customs, although slowly, and it remains hindered by a lack of interoperability and cumbersome internal procedures. There is still no electronic signature infrastructure for citizens; businesses can obtain a digital certificate for e-signature from the entity tax authorities, but only to deal with taxation. To foster a user-oriented administration, Bosnia and Herzegovina should simplify and modernise administrative procedures for citizens and business in a harmonised way across the country. The Federation entity amended its law on administrative procedure in July 2022. The Republika Srprska entity created a one-stop-shop for business registration, but this service is not fully functional because of the delayed introduction of e-signature and e-payments. 2.2. Rule of law and fundamental rights

2.2.1 Chapter 23: Judiciary and fundamental rights The EU’s founding values include the rule of law and respect for human rights. An effective (independent, high-quality and efficient) judicial system and an effective fight against corruption are of paramount importance, as is the respect for fundamental rights in law and in practice. 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 (‘Priebe Report’) . 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 the public, businesses 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 Opinion key priority 6 on the functioning of the judiciary. Last year’s recommendations remain pending. In May 2022, the Parliament rejected the legislative amendments aimed at establishing a system to verify asset declarations of judges, prosecutors and HJPC members, which highlights a lack of genuine political commitment to the rule of law and to the country’s EU path. The interim investigative committee on the state of the judiciary of the House of Representatives, despite delays due to the political blockage, published its findings in June 2022. Persistent and evident signs of deterioration continue to require urgent measures to strengthen integrity and regain the public trust in the judiciary. The Chief Prosecutor of Bosnia and Herzegovina and the chief prosecutor of Republika Srpska were demoted on account of disciplinary offences during the reporting period. The legislative initiative to set up a separate HJPC body in the Republika Srpska entity would violate the constitutional and legal order and further jeopardise the independence of the judiciary, representing a clear backsliding on the Opinion key priorities; it should be unequivocally abandoned. In the coming year, Bosnia and Herzegovina should, in particular: ®adopt a new justice sector reform strategy and implement the revised national war Crimes strategy effectively, notably by appointing the supervisory body; ®urgently re-introduce into parliamentary procedure and adopt the integrity amendments to the Law on the High Judicial and Prosecutorial Council establishing among others a credible and rigorous system of verification of asset declarations of judicial office holders; ®finalise the new draft law on the High Judicial and Prosecutorial Council and on the Courts of Bosnia and Herzegovina, in line with European standards, and request the opinion of the Venice Commission; ®consistently apply merit-based appointment practices, without prevalence of ethnic criteria, and ensure that quality criteria are applied in performance appraisals. Strategic documents Bosnia and Herzegovina still needs to adopt a new Justice Sector Reform Strategy for 2021-2027 and the related action plan. The new strategy must include all key reforms recommended in the Commission Opinion and analytical report, as well as in the Expert’s Report on Rule of Law issues in Bosnia and Herzegovina (‘Priebe report’). The strategy should be supported by an efficient mechanism of governance, monitoring and reporting on its performance, with the possibility to adopt corrective actions, and it should be supported by adequate budgetary allocations. Management body The High Judicial and Prosecutorial Council (HJPC) is the single judicial self-governance body. Despite targeted action of its leadership to address shortcomings within its remit, public trust in the judiciary remains low. The lack of a common HJPC position in reaction to the initiative of the Republika Srpska entity questioning its status as the single countrywide body of self-governance of the judiciary has exposed its fragility. Implementation of the HJPC Reform Program 2021-2023, including the new communication strategy and action plan, achieved little impact on key judicial standards in practice, notably on merit-based appointments, accountability, efficiency and transparency. The HJPC Presidency has to step up its oversight role and assume responsibility for substantial reforms. More tangible results are expected, notably in the area of fighting corruption and nepotism in the judiciary. The HJPC should increase its own accountability by providing thorough and transparent reasoning of its final decisions, especially on appointments, in line with European standards. Independence and impartiality The independence and impartiality of the judiciary did not improve. Executive and legislative authorities failed to adopt additional safeguards. The HJPC, as well as all courts and prosecutor’s offices, should undertake more efforts to restore public trust in the independence of the judiciary. Rules on appointments, disciplinary responsibility, career advancement and conflict of interest of judges and prosecutors continue to be applied inconsistently and with overly broad discretion. Deviations from objective appointment criteria affect trust in the integrity and objectivity of the process. Professional integrity and suitability standards are rarely taken into account in career development, and judicial office holders often get promoted despite having disciplinary or criminal records. This further erodes citizens’ trust in an independent and credible judiciary. The HJPC must urgently demonstrate more objectivity in conducting appointment procedures, which must be based on pre-determined, objective and accessible criteria. In the reporting period, efforts have been made to streamline appointments by issuing fewer calls with a larger number of vacancies. However, the selection procedures are still too long, often to the detriment of staffing needs of courts and prosecutor’s offices. A new comprehensive Law on the HJPC should provide for a single annual examination and more stringent appointment criteria. The HJPC has to provide for expedient testing procedures and improve the quality of first access to the judicial career by establishing a preparatory programme in line with the recommendations of the Priebe report. In the absence of a new law on the HJPC, the rules on conflict of interest for the entire judiciary are still non-binding. The random case allocation system remains vulnerable to abuses, which affects impartiality. Deviations have been reported from the automated random allocation of cases, and some even sanctioned. Any re-distribution should only be possible for exceptional reasons and even then only when documented and explicitly justified. Such an exceptional procedure must be precisely and transparently documented to rule out personal and political influence. Court presidents and chief prosecutors in coordination with the HJPC need to take action to increase transparency and provide justification for re-distributing cases manually. Undue external pressures have increased, notably by political leaders who publicly target certain judicial office holders and their decisions. There are no available remedies against actions undermining judicial independence, including threats. The threat reporting mechanism and subsequent public reactions of the HJPC must be reviewed. Accountability

There has been no progress towards establishing a robust system to verify asset declarations of judges, prosecutors and HJPC members, as legislative amendments providing integrity checks have been rejected in Parliament. Once the Law on the HJPC is amended, the HJPC and its secretariat should ensure that all preconditions are in place for sufficient security standards of files and correspondence of the Integrity Department and its special unit by using the tools provided through EU assistance. A number of judicial office holders published their asset declarations voluntarily, but not all court presidents and chief prosecutors did so. Integrity plans are in place in almost all courts and prosecutor’s offices, yet with limited results. There is a need for comprehensive ethics and integrity training, including for newly appointed judges and prosecutors. The HJPC should introduce an in-depth evaluation of suitability of candidates, notably during promotion procedures. Disciplinary procedures continue to have little dissuasive effect. In 2021 the Office of the Disciplinary Counsel (ODC) registered 925 complaints, out of which 71 ex officio against judicial office holders (28% more than in 2020) and filed 35 disciplinary charges, including 10 against chief prosecutors and court presidents. The Disciplinary Counsel has to be provided with a sufficient degree of separation of premises and infrastructure to enjoy a sufficient degree of autonomy and independence, guarantee the confidentiality of data, and protect staff and witnesses from intimidation risks. The HJPC completed 31 disciplinary proceedings, of which 25 resulted in disciplinary measures, including one demotion and 15 cases of salary reduction. One judge resigned during the proceedings. Some cases pertaining to high-ranking magistrates drew significant attention. In October 2021 the Chief Prosecutor of Bosnia and Herzegovina was demoted on account of disciplinary offences, notably for manipulation of case assignment, while the President of the Court of Bosnia and Herzegovina was acquitted on all disciplinary charges. In May 2022 the Chief Prosecutor of Republika Srpska was also demoted following first-instance disciplinary procedure. Disciplinary and criminal convictions or pending disciplinary proceedings have to be taken into account in the procedures for transfer, promotion and performance appraisal. To this aim, the HJPC has to apply consistently the criteria of suitability of candidates for judicial posts, in line with Commission recommendations. Failure to do so should have consequences in terms of non-promotion or insufficient/poor performance appraisal. Disciplinary hearings and decisions need to reach the wider public more effectively. There has been no progress in addressing the shortcomings concerning the composition and potential conflict of interest in the formation of disciplinary panels. The targeted amendments to the Law on the HJPC would have provided for a special regime of disciplinary liability of all members of the HJPC, including its President; such amendments were rejected in parliament in May 2022. Rules and training on evidence gathering before disciplinary panels should be improved in line with Commission recommendations, as well as the evaluation of ethical standards. Introducing an inspectorate service should be seriously considered. Professionalism and competence Appointments and career advancement of judges and prosecutors are core prerogatives of the HJPC. Although appointment rules are based on merit, exceptions based on ethnicity and other considerations continue to prevail. As a consequence, appointments significantly deviate from merit-based ranking, casting doubts over fairness. A new law on the HJPC should introduce judicial review of HJPC decisions; in the meantime, the HJPC has to re-assess its criteria and introduce clear reasoning for each appointment, duly taking into account criminal cases and disciplinary records of candidates. Trust in the appointment system is at its lowest, and immediate resolute action is needed to restore it. Performance appraisals require reform to balance quality and quantity criteria, which should apply equally to all judges and prosecutors throughout the country. Quality of justice Two investigations of public significance for serious crimes have not been concluded yet. The injured parties have been waiting for justice for too long and are organising rallies, notably in front of the Prosecutor’s Office. Effective and prompt investigations and judicial follow-up must be ensured for those cases. Training for judges and prosecutors is handled by the entity-level judicial and prosecutorial training centres, which are coordinated by the HJPC. Significant improvement is needed, both in terms of budget allocation and quantity/quality of training sessions. Mandatory training is too short, lacks assessment of needs and does not focus on basic skills (conduct, managing caseload, preparation of hearings, ethics, code of procedure). The selection and quality of trainers need to be improved. The impact of training programmes should be evaluated and linked to the evaluation of judges and prosecutors’ work. The total budget for training in 2021 amounted to EUR 645 416, with a slight 5% increase compared to 2020. The national case management system (CMS) produces detailed reliable statistics and reports at different levels (judges, courts, national) including on case flow, human resources, and duration of the pending cases. According to the Council of Europe’s European Commission for the Efficiency of Justice (CEPEJ), the CMS index for Bosnia and Herzegovina is higher than the Western Balkans average (3.5 for each type of cases, 2.9 for civil, commercial and administrative cases, and 2.8 for criminal cases). Bosnia and Herzegovina timely delivers good quality and reliable judicial data to the CEPEJ Dashboard Western Balkans action. 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. The justice system still lacks transparency but some improvements are visible. On 5 March 2021, an online database of court decisions was opened to the public free of charge, containing over 16 000 entries as of June 2022. The HJPC also adopted a communication strategy and action plan, which remain to be implemented. To improve public trust and increase transparency, adequate training on public communications and media relations for courts and prosecutors’ offices are needed. Public appearances and social media use by judicial officials remain to be regulated. Further steps were taken to increase the harmonisation of jurisprudence: in 2021, in coordination with the four highest judicial instances, the HJPC created a case law portal allowing access to over 4 070 judicial stances and selected court decisions. However, the legal status and effectiveness of the judicial panels for harmonising case law in civil, criminal and administrative matters remain unsolved. Ultimately, Bosnia and Herzegovina needs to establish a judicial body capable of ensuring the consistent interpretation of the law and harmonisation of case-law across the country. The 2021 budget for the judiciary, including the HJPC, is EUR 135.6 million (0,77% of GDP), slightly above 2020 (EUR 132.5 million). In 2021 EUR 103.9 million was allocated to courts and EUR 29.1 million to prosecutors’ offices (compared to EUR 101.5 million and EUR 28.4 million in 2020). The budget has increased in the last three years (2018-2021) from EUR 35 to EUR 37.8 per inhabitant and is now the same as the Western Balkans’ median . The funds remain insufficient to cover investments and to improve the judicial infrastructure, since over 85% is spent on salaries and compensations. Also, the fragmented system for financing the judicial institutions is highly complex and requires interaction with all levels of government in the process of budget adoption. Consequently, there are significant budget inequalities in the current funding system and difficulties in the process of judicial budget preparation. The HJPC should take a more active role to ensure adequate distribution of funds among judicial institutions. In 2021, Bosnia and Herzegovina had 998 full-time judges (29 per 100 000 inhabitants ) and 361 full-time prosecutors (11 per 100 000 inhabitants), including 80 court presidents and 18 chief prosecutors. According to CEPEJ, the European averages are 21 judges and 12 prosecutors per 100 000 inhabitants. 61% of judges and prosecutors and 51% of managers are women. Efficiency The length of court proceedings in first-instance cases (not dealing with utility bills) decreased to 409 days in 2021 (434 in 2020), but still remains very high. The clearance rate increased slightly to 97% in 2021 (96% in 2020). Nevertheless, the still excessive length of proceedings hampers the citizens’ right to trial within a reasonable time. A law to protect that right was adopted at state level in June 2022, but is still missing in the Federation entity. Civil and criminal procedural codes have to be revised to make judicial proceedings more efficient. Court presidents and chief prosecutors still manage the procedural discipline on trials poorly, ignoring concrete recommendations issued by the HJPC. They need to take a more active role in managing their institutions under the strategic guidance of the HJPC. There is a backlog of over 2.1 million pending court cases, of which some 1.8 million are cases of unpaid utility bills, which continue to hinder efficiency. Such backlog overburdens first instance courts. The backlog of non-utility cases decreased slightly by 1.3% compared to 2020. Relevant authorities did not follow Commission recommendations to transfer the enforcement of small and uncontested claims from courts to professional bailiffs. Entity-level laws and regulations on enforcement have to be amended urgently in order to increase efficiency. The HJPC attempt to reduce the working time used to calculate the annual performance quotas for judges for all types of cases, if adopted, would result in an annual 9% increase in the backlog, and would risk undoing a decade of hard-fought progress. In order not to undermine efficiency, remedial measures to the judges’ quota system should be introduced only after a thorough impact analysis. The HJPC has to finalise the process of reducing the backlog and length of proceedings, including by reviewing the effectiveness of the recently adopted prosecutorial quotas. Domestic handling of war crime cases Bosnia and Herzegovina constructively cooperates with the International Residual Mechanism for Criminal Tribunals (IRMCT-Mechanism). The Prosecutor’s Office of Bosnia and Herzegovina and the Office of the Prosecutor of the Mechanism continue to collaborate closely. In 2021, 90% of all requests for assistance from the region to the Mechanism’s Prosecutor came from Bosnia and Herzegovina. The number of indictments for war crimes increased in 2021, with 21 indictments against 56 defendants (18 against 45 in 2020).

War crime convictions by the International Criminal Tribunal for the former Yugoslavia and its successors are still not entered into domestic criminal records. Although the Ministry of Justice established a working group in 2020 to address this issue, there has been no progress. The revised National War Crime Strategy is being implemented, despite the failure of the Council of Ministers to appoint a new supervisory body. Within the scope of its mandate, the HJPC has proactively overseen the work of the prosecutors and courts in implementing the strategy. A supervisory body remains needed to ensure comprehensive oversight, endorse decisions required to improve the processing of war crimes, validate the implementation of the strategy and secure continuous funding. The Council of Ministers should swiftly establish the new supervisory body. Regional judicial cooperation in processing war crime cases requires further improvements. 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 have helped to reduce judicial impunity but have not been used systematically. With the assistance of the Prosecutor of the Mechanism, cooperation with Serbia has led to more transfers of proceedings and indictments being issued in cases transferred from Bosnia and Herzegovina, but this has only resulted in one conviction so far. Cooperation with Croatia continues to face a number of impediments on judicial assistance, with some investigations ongoing that have not yet led to indictments. The protocol with Montenegro has led to investigations after the transfer of evidence from the Mechanism. Out of 238 cases by the end of 2021, 94 proceedings (against 100 individuals) are pending due to the unavailibilty of the indicted persons. Holding multiple citizenships, these individuals are often residing in neighbouring countries. This enables them to escape justice by taking advantage of prohibitions against extradition of own nationals for the criminal offences of genocide, crimes against humanity and war crimes. They also benefit from the lack of progress of neighbouring jurisdictions in addressing the crimes in question. Serbia still fails to enforce the final sentence handed down in Bosnia and Herzegovina in 2014 against Novak Djukić, despite the availability of the basic international judicial cooperation tools. A number of international arrest warrants (Interpol Red Notice) filed by Bosnia and Herzegovina for indicted war criminals remain unimplemented. Similarly, Duško Kornjača indicted for crimes against humanity in 2015 and Tomislav Kovač indicted for genocide in 2018 are freely residing in Serbia. The ongoing reduction the backlog in war crime cases still suffers delays, casting doubts on completing the processing of war crimes by the end of 2023. From an estimated 1 210 cases in July 2013, the unresolved war crime cases have been reduced to 492 (-59.5%) by end 2021; around 311 of these are complex cases (63.5%). An estimated 174 cases against 393 individuals (35.5% of the backlog) are pending due to the unavailability of the suspects. Without reinforced regional cooperation, by end 2023 the backlog of war crimes cases will be primarily composed of suspects unavailable to the judiciary of Bosnia and Herzegovina. In 2021, the number of confirmed indictments (13) and the conviction rates (85%) remained stable in the entities and the Brčko District. While progress were noticeable at state level with 15 indictments confirmed and an 86% conviction rate, there is still room for improvement. The Prosecutor’s Office should strengthen efforts to process the most complex cases (it transferred 25 less complex cases to the entities and Brčko District in 2021) and continue to 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 Opinion key priority 7, the 2021 recommendations, and the findings of the Expert Report on Rule of Law issues, which remain outstanding. Political leaders and judicial institutions failed to tackle widespread corruption and actively obstructed progress, leading to long-term stagnation and increasing signs of political capture. A state-level law on the prevention of conflict of interest was rejected in Parliament in May 2022, indicating a lack of genuine political commitment to the rule of law and to the EU path of the country. Selective and non-transparent judicial follow-up in corruption cases of public resonance is a cause of significant concern, alongside pressure and intimidation. No action was taken to adopt new strategic documents at state level and in the Federation entity. Legislation is not harmonised across the country, and cooperation and coordination among anti-corruption bodies is poor. Although in the reporting period there have been some indictments pertaining to high-level corruption sentences, the track record on preventing and repressing corruption (including at high level) remains insignificant, due to operational inefficiency and political interference. The number of final convictions in high-level cases remains very low. Unlike in other cantons, the Sarajevo canton authorities continued corruption prevention activities, but efficient follow-up by the prosecution and judiciary was missing. The continued lack of progress at all levels increases the risk of backsliding. Political leaders and judicial institutions need to urgently remedy the situation. Targeted risk assessments and dedicated measures to address corruption are needed, in particular in the most vulnerable sectors. In the coming year, Bosnia and Herzegovina should, in particular: ®Submit into parliamentary procedure and 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; amend the criminal legislation to address the lack of harmonisation and competence conflicts, excessive length of proceedings and weak institutional cooperation in corruption cases; ®Demonstrate progress towards establishing a track record on preventing and repressing high-level corruption; improve cooperation between the police and the prosecutors’ offices. ®Adopt a new state-level anticorruption strategy and action plan. Track record Efforts remain insufficient to establish a track record on proactive investigations, prosecutions and final convictions for corruption. In particular, progress in tackling high-level corruption remains insignificant and needs to be seriously stepped up. In high-level corruption cases, in 2021, there were 15 ordered investigations (14 in 2020), 6 suspended investigations, 12 filed indictments (7 in 2020), 3 final verdicts, 2 convictions and 1 acquittal (one conviction with suspended sentence in 2020). This trend shows that there continuers to be an alarmingly low number of final convictions in high-profile cases. In 2021, the State Investigation and Protection Agency (SIPA) initiated 193 investigations (42 ex officio and 151 by order of the competent Prosecutor’s office ) into cases of corruption, of which 20 were finalised. 38 reports against 67 individuals were sent to the competent prosecutors’ offices. The trend at state level shows that only few investigations have been finalised. Prosecutors’ offices issued 317 orders to conduct investigations into corruption, leading to 229 indictments countrywide. 211 indictments were confirmed, including indictments from the previous period, while the number of convictions was 143, of which, 98 were suspended sentences. 134 persons were convicted based on a plea bargain. The HJPC has adopted criteria for the identification of high-level corruption cases. In 2021 the HJPC enabled automatic access to data on high-level corruption cases in the Case Management System. 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 dissuasive effect. Most of the convictions were for abuse of office or authority. In the area of conflicts of interest, a state-level commission, established in July 2020, remains ineffective and has dealt with a few cases only. The commission determined that three public officials were in conflict of interest and imposed temporary salary reductions in two cases as a sanction. The commission confirmed the conflict of interest of the deputy director of the Agency for Prevention of Corruption of Bosnia and Herzegovina but did not impose a sanction as he was no longer an official. As regards asset declarations, about 600 state-level officials are required to submit their financial reports for verification, out of whom only half (291) submitted their financial reports in 2021 (231 in 2020). In 2021, no proceedings for failure to submit declarations or inaccuracies were initiatied, no reports were checked and no sanctions were imposed. In the Republika Srpska entity, around 4 000 office holders are obliged to submit financial reports, out of whom only one fourth (990) submitted financial reports in 2021. The commission on conflicts of interest received 85 reports of conflict of interest and in one case acted ex officio. It issued seven decisions on established conflict of interest. Rules on conflicts of interest are not enforced in the Federation entity. The Brčko District adopted a law on preventing conflict of interest in March 2021 and appointed a related commission in June 2021. Asset declarations of elected officials are made available to the public through the Central Election Commission website, although it has no obligation to check their accuracy. In the Sarajevo Canton, office holders’ asset declarations are published on the cantonal anti-corruption office website. In the Sarajevo Canton, the positive trend continued. In 2021, 1 380 asset declarations were submitted to the cantonal Office for the Prevention of Corruption (1 163 in 2020) and 42 office holders who failed to submit declarations were sanctioned with misdemeanour fines, of which nine orders were appealed before minor offences courts. In all cases, the courts finally imposed sanctions lower than the minimum provided by law; such judicial practice must be further scrutinised in light of the principle of dissuasiveness and efficiency of sanctions. In two cases, including one against a mayor, the cantonal anti-corruption office found significant disproportion between assets and legal income. Reports have been submitted to the Sarajevo cantonal prosecutor’s office on the suspicion of tax fraud and illegal gain of assets. The Agency for Prevention of Corruption and Coordination of the Fight against Corruption (APIK) granted administrative protection to whistle-blowers in two cases out of three requests in 2021, compared with zero in 2020. In the Republika Srpska entity, no request for protection to whistle-blowers was filed in 2021, compared with one request filed and partially upheld in 2020. There is no legislation on whistle-blower protection in the Federation entity. In 2021, the Brčko District established the Office for the prevention of corruption that is also responsible for implementing the 2018 legislation on whistle-blowers protection. Legislation at all levels of government needs to be aligned with the EU acquis.

Institutional framework Corruption Prevention The functioning of corruption prevention bodies and their coordination, including with APIK, continued to be ineffective. APIK faces challenges to ensure it is able to function independently. APIK should play a much more proactive role in implementing GRECO recommendations and aligning with international standards. The mandate of the director and deputy director of APIK expired in September 2021; the Parliament appointed their successors only in July 2022. A serious concern is that one member of the parliamentary commission in charge of appointments at APIK has been publicly designated by the U.S. Department of State since September 2018 due to involvement in significant corruption (implying ineligibility for entry to the United States). The independence of corruption prevention bodies at the entity and cantonal levels and their human and material resources need to be significantly strengthened. The anti-corruption office of the Sarajevo Canton continued to make good progress and remains a good example among cantonal bodies. In 2021, the office processed 919 reports of corruption, most related to corruption in employment, of which 83 reports were sent on to the competent authorities for further investigation and action. 83 reports were referred to the Prosecutor’s Office of the Sarajevo Canton. In two cases, the Prosecutor’s Office filed an indictment. In 12 cases, there was a decision not to conduct/suspend the investigation. The anticorruption office continued increasing transparency standards in the Sarajevo Canton, establishing four new publicly accessible registries in 2021 on public procurement, subsidies for agriculture beneficiaries, subsidies for small business development and the transfers to non-profit organisations and individuals. In May 2021, the Tuzla Canton adopted legislation to establish an anticorruption office and in December 2021 a Law on reporting and verification of asset declarations of public officials, following the model of the Sarajevo Canton. In the Brčko District, following the adoption of legislation establishing an anticorruption office in 2018, the authorities finally appointed in October 2021 its director and two deputies. The Una Sana Canton is yet to establish the body that will implement the legislation on reporting and verifying asset declarations of public officials, which entered into force in February 2021. Bosnia and Herzegovina needs to introduce a comprehensive and effective system for electronic public procurement to foster transparency and reduce the 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 more capacity to monitor compliance with political party financing laws. Law enforcement Criminal justice policy and the legislative framework throughout the country is largely ineffective and inadequate for 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 and investigations are slow. The highly formalistic manner in which SIPA is enforcing actions aimed at obtaining evidence, including in high-level corruption cases, is cause of serious concern. 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. Pressure and interference, especially in high-level cases, has continued and is a major concern. In the reporting period, the limited cooperation of law enforcement agencies with the prosecutor’s offices and lack of effective monitoring 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, is a cause of serious concern questioning their independence and professionalism. Divergences in views with regard to the authority of state-level prosecution offices to issue instructions directed at entity prosecution offices hamper the efficiency of investigations and proceedings in high-level corruption cases. Such conflicting legal views must be remedied immediately. Competent authorities of Bosnia and Herzegovina have not addressed the failure of Serbia to respond to repeated requests of the Prosecutor’s Office of Bosnia and Herzegovina for international legal assistance since 2016, in a corruption case involving a high-level politician. 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 major concern. A trial is ongoing before the 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 Novalić et al.), related to public procurement fraud of COVID-19 medical equipment. The Court of Bosnia and Herzegovina managed the trial very poorly, resulting in extensive and unjustified delays, which also affected the composition of the court panel, as its president retired. The Prosecutor’s Office of Bosnia and Herzegovina initiated two additional related investigations and the Sarajevo Canton Prosecutor’s Office one related case. These cases were widely reported in the media and investigations are ongoing. It is essential that prosecution and judicial services ensure an independent, effective and impartial judicial follow-up in these cases, which are of great public resonance and raise concern about the state of corruption in the country. Prosecutors are expected to demonstrate firm determination to prioritise and efficiently finalise investigations of mid and high-level corruption cases arising out of the SKY ECC communication service tool. Efficient judicial follow up in those cases must be ensured. Legal framework The lack of harmonisation of legislation across the country continued to hamper the fight against corruption. A state-level law on prevention of conflict of interest, in line with international standards and best European practices, was rejected in Parliament in May 2022, indicating a lack of genuine political commitment to the rule of law and to the EU path of the country. A draft law on conflict of interests, aligned with international standards and GRECO recommendations, needs to be submitted into parliamentary procedure, and adopted without further delay. 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 the prevention of conflict of interest, which needs to be implemented effectively and further aligned with best European practices. The Republika Srpska entity also needs to align its conflict of interest legislation with international standards. In 2021, both entities adopted strategies for development of the system of internal financial control in the public sector. 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, thus hindering the prevention and repression of corruption (see also Chapter 23). 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 state-level strategy on anti-corruption expired in the end of 2019 and no new strategy has been adopted since. The anti-corruption strategies and action plans at all levels of government remain outdated, except in the Republika Srpska entity, and effective implementation continue to be lacking, further hampering a harmonised strategic approach across the country. New strategic documents need be adopted, harmonised across the country, and their implementation should start without delay. Adequate funding should be provided and strong monitoring mechanisms set up to ensure their implementation. Fundamental rights The legislative and institutional framework on fundamental rights is largely in place. Limited efforts were made in the reporting period to address Opinion key priorities 5 and 9-13 on fundamental rights, notably by adopting action plans for the social inclusion of the Roma in April 2022 and on the rights of LGBTIQ persons in July 2022. Freedom of assembly remains restricted in the Republika Srpska entity. 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 ensur