EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 21.10.2005 
COM(2005) 529 final 
  
COMMUNICATION FROM THE CO MMISSION TO THE COUNCIL 
on the progress achieved by Bosnia and H erzegovina in implementing the priorities 
identified in the “Feasibility Study on the preparedness of Bosnia and Herzegovina to 
negotiate a Stabilisation and Associatio n Agreement with the European Union 
(COM (2003) 692 final)” 
 
EN 2   EN 1. I NTRODUCTION  
The Thessaloniki European Council in June 200 3 confirmed the Stabili sation and Association 
process (SAP) as the European Union’s policy framework for South Eastern Europe. The SAP provides for the establishment of Stabilisati on and Association Agreements (SAAs) between 
the EU and the SAP countries
1. The Thessaloniki European Council also confirmed that 
Bosnia and Herzegovina is a potential can didate for EU membership. The European 
perspective for the Western Balkans has been co nfirmed by the Presidency Conclusions of the 
June 2005 European Council. 
In November 2003, the Commission presented a F easibility Study (FS) on the preparedness of 
Bosnia and Herzegovina to negotiate a SAA2. The FS concluded that  the Commission would 
decide on a recommendation for a Council deci sion to open negotia tions for a SAA with 
Bosnia and Herzegovina as soon as it w ould ascertain that significant progress  had been made 
in meeting the sixteen priorities set out under Section C (Conclusion) of the Study. 
The present Communication assesses whether Bosn ia and Herzegovina has made the required 
“significant progress” in addressing the FS priorities. 
2. R ELATIONS BETWEEN THE EUROPEAN UNION AND BOSNIA AND HERZEGOVINA  
Currently, the EU has no contr actual relation with Bosnia a nd Herzegovina. Nevertheless, a 
structured dialogue between Bosnia and Herze govina and the EU has been established in 
recent years. Bosnia and Herzegovina has been benefiting from various SAP instruments since the outset of this initiative, notably from  autonomous trade conc essions covering almost 
all Bosnia and Herzegovina’s products, a nd from substantial financial support.  
In 1998 an EU Declaration on “Special Relati ons between EU and Bosnia and Herzegovina” 
led to the establishment of the EU/Bosnia a nd Herzegovina Joint Consultative Task Force 
(CTF) to assist in the preparation of contr actual relations. Since th e 2003 Feasibility Study, 
the CTF has focussed upon promoting and monito ring reforms in the key areas identified by 
the FS. These areas coincide to a very large extent with the short term priorities of the 
European Partnership for Bosnia a nd Herzegovina adopted in June 2004
3 
3. P ROGRESS BY BOSNIA AND HERZEGOVINA IN ADDRESSING THE PRIORITIES 
IDENTIFIED IN THE 2003  FEASIBILITY STUDY (FS) 
The 2003 FS and the perspective to negotiate a SAA have acted as a powerful catalyser to 
implement reforms in Bosnia and Herzegovina. The most relevant achievements in addressing 
the sixteen FS priorities are summarised below.  
In relation to existing conditionality and international obligations (FS1) , Bosnia and 
Herzegovina has completed the remaini ng requirements of the EU Road Map4 and has 
                                                 
1 Albania, Bosnia and Herzegovina, Croatia, former Yugoslav Republic of Macedonia, Serbia and Montenegro 
2 COM (03) 692 of 18 November 2003 
3 Council Decision 2004/515/EC; OJ L221/2004  
4 In 2000, an EU "Road Map" identified eighteen  initial steps to be taken by Bosnia and Herzegovina prior to the preparation by t he 
Commission of a study assessing the feasibility of opening SAA ne gotiations with Bosnia and Herzegovina. The Road Map steps 
 
EN 3   EN ensured compliance with the Dayton-Paris Peace Accords. Co-operation with the International 
Criminal Tribunal for former Yugoslavia (I CTY) has seen important progress and a 
substantial number of indicted  war criminals have been tran sferred to The Hague in recent 
months. In its tenth report i ssued at the end of April 20055, the Council of Europe (CoE) 
recognised that Bosnia and Herzegovina has honoured most of its post-accession 
commitments, and outlined a number of recent positive developments in the fields of human rights and the rule of law.  Regarding governance (FS2)
, the functioning of the Council of 
Ministers (CoM) and of the Parliament has ove rall improved. New State-level Ministries and 
institutions have been establ ished and they are now progressi vely being equipped to properly 
perform all their duties. The “A ction Plan for Priority Refo rms” has been adopted, and a 
consolidated State-level government work plan  matching policy prior ities with budgetary 
resources has been established. 
Bosnia and Herzegovina’s public administration (FS3)  has also been strengthened. The 
necessary funding has been provided for the Civil Service Agencies at State and Entity levels, 
and inter-agency co-operation has improved. The administrative structures directly related 
with European integration (FS4)  have been considerably reinforced. In particular, the 
Directorate for European Inte gration (DEI) is now  operational and has become a central 
counterpart for the development of the relations  between Bosnia and Herzegovina and the EU.  
In the area of human rights (FS5) , it is important to note that  legislation necessary to support 
refugee returns has been adopted, and that a Bosnia and Herzegovina Refugee Return Fund 
has been established and is in operation. Hu man rights-related competencies have been 
transferred from the Entity-level to the State-level, as recommended by the CoE and other international bodies. The Human Rights Commissi on has been established; it is working 
within the Constitutional Court and is ensuring due follow up to human rights-related cases. 
Adequate funding is provided for the Cour t. In the field of judiciary (FS6)
, legislation to 
establish a single High Judicial and Pros ecutorial Council (HJPC) for Bosnia and 
Herzegovina has been adopted and the HJPC is now operational. This is  a crucial step to 
consolidate State authority over the Entity judici aries and to strengthen the independence of 
the judiciary throughout Bosnia and Herzegovina . Staff and funding for the State Court and 
Bosnia and Herzegovina’s State Prosecutor have been provided. 
As regards tackling crime, especially organised (FS7)  crime, Bosnia and Herzegovina has 
made considerable progress in building up State- level law enforcement capacity, in particular 
by allocating the necessary resources to ensure  the proper functioning of the State Information 
and Protection Agency (SIPA). The Bosnia a nd Herzegovina Ministry of Security is 
progressively being equipped in order to implemen t its tasks adequately. In the field of police 
reform, the Agreement on Restructuring of Police has been adopted by the parties, in line with 
the three principles outlined by the Commissi on, namely i) all legislative and budgetary 
competencies for all police matters must be vested at the state level, ii) no political 
interference with operational policing and iii) functional local police areas must be 
determined by technically policing criteria wh ere operational command is exercised at the 
local level.  
                                                                                                                                                         
were "substantially completed" in September 2002. This opene d the door to the preparation of the Commission’s Feasibility  
Study (FS).  
5 SG/Inf (2005)8 of 25 April 2005 
 
EN 4   EN Proper structures to address asylum and migration (FS8)  in conformity with international 
standards have been established. The Ministry of  Security has taken over the responsibility for 
refugee status determination from UNHCR and ha s defined related crit eria and procedures. 
With regard to the reform of the customs and tax administrations (FS9), Bosnia and 
Herzegovina has ensured the implementation of  the recommendations of the Indirect Tax 
Policy Commission, notably through the adoption of the Law on the Indirect Tax Authority 
(ITA) and the related enabling legislation. ITA is now operational, as well as the new 
Customs Authority. Progress has been made as regards the introduction of the VAT, which is 
now scheduled for 1st January 2006.  
In the area of budget legisla tion and practice (FS10 + FS11) , budget legislation covering 
multi-annual budget planning and forecasting has been adopted and substantial steps have been taken to elaborate a consolidated government account. Moreover, progress has been made as regards the establishment of a centralised record for all income accruing to public authorities at different levels of government, in cluding grants and other forms of international 
assistance.  
As regards statistics (FS12)
, Bosnia and Herzegovina has a dopted and is implementing the 
Law on Statistics aiming at the creation of a functioning system with clear lines of 
responsibility and co-ordination mechanisms. Bo snia and Herzegovina has started to provide 
trade statistics to EUROSTAT. 
In the field of trade (FS13) , Bosnia and Herzegovina has prepar ed a draft trade policy. With a 
view to promoting exports, but also to enha ncing standards and the single economic space, 
Bosnia and Herzegovina has established, at Stat e-level, certification a nd other procedures for 
the export of animal products. A Phyto-sa nitary Office has been established.  
In the field of energy (FS14) , Bosnia and Herzegovina has developed Action Plans for the 
restructuring of the electricity market and st arted their implementation. It has also made 
progress in terms of regional co-operation in th is area, notably through the implementation of 
measures identified in the 2003 Athens Me morandum of Understanding on Energy.  
Bosnia and Herzegovina has been able to ma ke significant achieveme nts in establishing a 
single economic space (FS15)  within the country. It has adopted a new Competition Law and 
established its main management body, the Co mpetition Council. It has also introduced 
provisions on the mutual recognition of products by the Entities and has set the framework for the implementation of a common public procurement regime throughout the country. Some progress has also been made in removing duplic ate licences, permits and similar authorisation 
requirements, facilitating operations of service providers (limited to the areas of banking, insurance and accounting and auditing). Finall y, Bosnia and Herzegovina has adopted the 
necessary legislation for the creation of a single business registration system, recognised 
throughout the whole country.  
As far as public broadcasting (FS16)
 is concerned, Bosnia and Herzegovina has adopted the 
Law on Public Broadcasting System and the par liamentary procedure for the adoption of the 
Law on Public Broadcasting Service has been initi ated and is well advanced. This legislation 
is in line with European standards and the Dayton-Paris Peace Accords.  
 
EN 5   EN 4. O VERALL CONCLUSION  
Taking into account the above, the European Commission considers that  Bosnia and 
Herzegovina has made significant progress in addre ssing the sixteen priorities identified in the 
framework of the 2003 Feasibility Study. Therefor e, in line with the FS conclusions, the 
Commission is in a position to recommend to the Council the opening of negotiations for a 
Stabilisation and Association Agreement with Bosnia and Herzegovina. The Commission will 
accordingly present draft negotiati ng directives to the Council. 
However, the opening of negotiations will requ ire that BiH State Parliament endorses the 
Agreement on Restructuring of Police. 
Moreover, Bosnia and Herzegovina needs to con tinue, in a sustained way, its reforms. Bosnia 
and Herzegovina should ensure the comple tion of outstanding FS issues and focus on 
adequate implementation of the European Partnership priorities. The Commission will 
continue monitoring closely the progre ss made by Bosnia and Herzegovina.  
The pace at which Bosnia and Herzegovina draws closer to the EU depends essentially on its 
speed in adopting and implementing the n ecessary reforms. Continued focus by the 
authorities on European integration is, therefore,  key to the sustainabilit y of the process. In 
order to progress through the various stages of the process, both before and during the 
negotiations, Bosnia and Herzegovina must, in pa rticular, continue to co-operate with the 
International Criminal Tribunal for former Yugoslavia (ICTY) with a view to rapidly 
achieving full co-operation, adopt the Law on Public Broadcasting Service and ensure the 
implementation of the police reform and of  the Public Broadcasting legislation.  
In addition to the above-mentioned areas, the au thorities should pay special attention to and 
achieve substantial progress in relation to the following issues: 
Implementation of the outstanding Council of Eu rope post-accession obligations, in particular 
in the areas of electoral law and education a nd adoption of the legisl ation necessary for the 
establishment of a single Ombudsma n in Bosnia and Herzegovina.  
With regard to governance and pub lic administration, adequate st affing and suitable premises 
need to be made available for all State-le vel ministries and institutions. Bosnia and 
Herzegovina must develop a comprehensive Acti on-plan for public administration reform and 
ensure its implementation. It should also enhance aid co-ordination capacities of the 
Directorate for European Integration. Furthe rmore, it is essential that State-Entity 
coordination be further improved. 
Sustained efforts are necessary to tackle crime, and in particular organised crime, efficiently. 
The Ministry of Security should be reinforced  both in terms of staff and funding. The laws 
establishing the Data Protection Commission and the Information Society Agency should be 
adopted. The Specific Action Orie nted Measures against Orga nised Crime should be fully 
implemented. 
A sound and comprehensive Trade Policy St rategy should be ra pidly adopted and 
implemented. Bosnia and Herzegovina should en sure that its trade-related contractual 
commitments are fulfilled and that the Free Tr ade Agreements are properly implemented. BiH 
international trade commitments, including it s offers within the ongoing WTO accession 
negotiations, should be fully consistent with the objectives of the future EU-Bosnia and 
 
EN 6   EN Herzegovina SAA and with Bosnia and Her zegovina’s obligations  therein and should 
therefore take fully into acc ount EC own international trade commitments. Ensuring the 
adequate supervision and management of free  zones in accordance with EU standards is 
essential. Furthermore, the issuing and control of  certificates of origin need to be enhanced 
and BiH should fully apply customs valuati on rules in accordance with international 
standards.  
Additional measures are necessa ry to achieve Bosnia and Herzegovina’s single economic 
space. Bosnia and Herzegovina needs to acc elerate the removal of duplicate licences, 
authorisations and similar barr iers to the existence of an actual single economic space, 
including through the establishment of the necessary state-level institutions. Public procurement legislation should be brought progres sively in line with EU standards and should 
be consistently implemented, including through the establishm ent of the bodies foreseen by 
the law. Continued efforts are necessary to implement the laws on standardisation, metrology 
and intellectual property, as well as to ensure  the adequate functioning of a single business 
register. 
Further efforts are necessary to complete the implementation of the Law on Statistics and to 
further develop and harmonise the production of statistics.  
Should the Commission note at an y time that Bosnia and Herze govina has not lived up to its 
commitments and has not satisfactorily addr essed the issues highlighted in this 
Communication, it may propose to  the Council that the SAA negotiations be suspended.  
To support the efforts made by Bosnia and Herzegovina before the formal opening of 
negotiations and throughout the negotiation pro cess, the Commission will further intensify 
discussions with the aut horities, in particular by setting up sectoral groups , as appropriate. 
The Commission is also committed to supporting th is process through its financial assistance 
programme.