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
Date: 2022-10-12
Institutions: Directorate-General for Neighbourhood and Enlargement Negotiations, European Commission
Subjects: Bosnia and Herzegovina, accession criteria, accession negotiations, pre-accession strategy

EN 

  EN 

   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 ...................................................................................................... 3 

1.1. 

1.2. 

CONTEXT ................................................................................................................. 3 

SUMMARY OF THE REPORT  .................................................................................... 4 

2. 

CLUSTER 1: THE FUNDAMENTALS OF THE ACCESSION PROCESS....... 8 

2.1. 

FUNCTIONING OF DEMOCRATIC INSTITUTIONS AND PUBLIC ADMINISTRATION 
REFORM .................................................................................................................. 8 

2.1.1   Democracy ................................................................................................... 8 

2.1.2. Public Administration Reform ....................................................................... 13 

2.2.  

RULE OF LAW AND FUNDAMENTAL RIGHTS.......................................................... 17 

2.2.1  Chapter 23: Judiciary and fundamental rights ........................................... 17 

2.2.2  Chapter 24: Justice, freedom and security ................................................. 37 

2.3. ECONOMIC CRITERIA ................................................................................................... 51 

2.3.1. The existence of a functioning market economy ........................................... 51 

2.3.2. The capacity to cope with competitive pressure and market forces within the 

Union .......................................................................................................... 58 

2.4. PUBLIC PROCUREMENT, STATISTICS, FINANCIAL CONTROL ...................................... 60 

Chapter 5 - Public procurement ............................................................................... 60 

Chapter 18 - Statistics .............................................................................................. 62 

Chapter 32 - Financial control .................................................................................. 64 

3. 

4. 

GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION 68 

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP ................ 70 

CLUSTER 2: INTERNAL MARKET ........................................................................................ 70 

Chapter 1 - Free movement of goods ....................................................................... 70 

Chapter 2 - Freedom of movements for workers ..................................................... 72 

Chapter 3 - Right of establishment and freedom to provide services ...................... 73 

Chapter 4: Free movement of capital ....................................................................... 74 

Chapter 6 - Company law......................................................................................... 75 

Chapter 7 - Intellectual property law........................................................................ 76 

Chapter 8 - Competition policy ................................................................................ 77 

Chapter 9 - Financial services .................................................................................. 78 

Chapter 28 - Consumer and health protection .......................................................... 80 

CLUSTER 3: COMPETITIVENESS AND INCLUSIVE GROWTH................................................ 83 

Chapter 10 - Digital transformation and media ........................................................ 84 

Chapter 16 - Taxation ............................................................................................... 85 

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Chapter 17 - Economic and monetary policy ........................................................... 86 

Chapter 19 - Social policy and employment ............................................................ 88 

Chapter 20 - Enterprise and industrial policy........................................................... 91 

Chapter 25 - Science and research ........................................................................... 94 

Chapter 26 - Education and culture .......................................................................... 95 

Chapter 29 - Customs union ..................................................................................... 97 

CLUSTER 4: THE GREEN AGENDA AND SUSTAINABLE CONNECTIVITY .............................. 98 

Chapter 14 - Transport policy .................................................................................. 98 

Chapter 15 - Energy ............................................................................................... 100 

Chapter 21 - Trans-European Networks................................................................. 103 

Chapter 27 - Environment and climate change ...................................................... 105 

CLUSTER 5: RESOURCES, AGRICULTURE AND COHESION ................................................ 108 

Chapter 11 - Agriculture and rural development ................................................... 108 

Chapter 12 - Food safety, veterinary and phytosanitary policy ............................. 109 

Chapter 13: Fisheries .............................................................................................. 111 

Chapter 22 - Regional policy & coordination of structural instruments ................ 112 

Chapter 33 - Financial & budgetary provisions ..................................................... 113 

CLUSTER 6: EXTERNAL RELATIONS ................................................................................. 114 

Chapter 30 - External relations............................................................................... 114 

Chapter 31 - Foreign, security & defence policy ................................................... 115 

ANNEX II – RELATIONS BETWEEN THE EU AND BOSNIA AND HERZEGOVINA
 .................................................................................................................................. 122 

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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  Opinion1  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 priorities2.  

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 

1 SWD(2019) 222 final, COM(2019) 261 final 
2https://www.consilium.europa.eu/en/press/press-releases/2019/12/10/council-conclusions-on-commission-
opinion-on-bosnia-and-herzegovina-s-application-for-membership-of-the-european-union/ 

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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 REPORT3  

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 

3  This  report  covers  the  period  from  June  2021  to  June  2022.  It  is  based  on  input  from  a  variety  of  sources, 
including contributions from Bosnia and Herzegovina, the EU Member States, European Parliament reports and 
information  from  various  international  and  non-governmental  organisations.  This  also  includes  the  results  of 
comparative assessments and indices produced by other stakeholders, in particular in the area of rule of law.  
The  report  uses  the  following  assessment  scales  to  describe  the  state  of  play:  early  stage,  some  level  of 
preparation,  moderately  prepared,  good  level  of  preparation  and  well  advanced.  To  describe  progress  made 
during  the  reporting  period,  it  uses  the  following  scale:  backsliding,  no  progress,  limited  progress,  some 
progress, good progress and very good progress. Where appropriate, also interim steps have been used. 

4 

 
 
                                                           
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 

5 

 
 
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, 

6 

 
 
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  Plan4  and  the  Green  Agenda  for  the  Western  Balkans,5  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.   

4 COM(2020) 641 final 
5 SWD(2020) 223 final 

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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  

FUNCTIONING OF DEMOCRATIC INSTITUTIONS AND PUBLIC ADMINISTRATION 

2.1. 
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. 

8 

 
 
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 

9 

 
 
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 

10 

 
 
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 
term  with  a  caretaker 
Herzegovina-Neretva  Canton  also  completed 
government.  

the  2018-2022 

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 

11 

 
 
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 

12 

 
 
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 
implementation  of  public 

the  capacity  of  PAR  coordinators 

improve 
administration reforms across all levels of government;    

to  steer 

  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 

13 

 
 
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 

14 

 
 
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 

15 

 
 
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.  

16 

 
 
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’)6. 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 

6 http://europa.ba/wp-content/uploads/2019/12/ExpertReportonRuleofLawissuesinBosniaandHerzegovina.pdf 

17 

 
 
                                                           
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 

18 

 
 
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 

19 

 
 
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 

20 

 
 
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’ median7. 
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 inhabitants8) 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 

7 Source: Council of Europe-Commission for the Efficiency of Jusitce/ CEPEJ 
8 Based on a total population of 3.281 million inhabitants (Source: World Bank 2020) 

21 

 
 
                                                           
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 

22 

 
 
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 

23 

 
 
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 

24 

 
 
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 

25 

 
 
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 

26 

 
 
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 
the  outstanding 
recommendations, notably on political party financing and conflict of interest.  

institutional  follow-up 

legislative  and 

to  fulfil 

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 
their 
strategic  documents  need  be  adopted,  harmonised  across 
implementation should start without delay. Adequate funding should be provided and strong 
monitoring mechanisms set up to ensure their implementation.  

the  country,  and 

27 

 
 
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 ensure non-discriminatory, inclusive and 
quality  education  for  all,  including  by  overcoming  the  practice  of  ‘two  schools  under  one 
roof’.  Gender-based  violence,  ill-treatment  of  detainees  and  the  protection  of  minorities, 
including  the  Roma9,  continue  to  cause  concern.  The  country  still  needs  to  develop  a 
comprehensive  strategic  framework  on  human  rights  and  on  the  protection  of  minorities, 
including on transitional justice. Recommendations from previous years are pending.                                                                                                                                               

In the coming year, Bosnia and Herzegovina should, in particular:  

  implement court rulings to end divided education; 

  designate  by  law  the  Human  Rights  Ombudsman  as  a  preventive  mechanism  against 

torture and ill-treatment; 

  ensure full respect, protection and promotion of freedom of assembly and expression, and 

refrain from further actions that adversely impact the exercise of these rights. 

Bosnia  and  Herzegovina  has  ratified  all  major  European  and  international  human  rights 
instruments,  most  of  which  are  included  in  its  Constitution.  The  absence  of  a  systematic 
follow-up  means  that  the  country  still  has  to  address  most  of  the  204  accepted 
recommendations  from  the  November  2019  Universal  Periodic  Review.  Despite  not  having 
observer status to the EU Agency for Fundamental Rights (FRA), Bosnia and Herzegovina is 
encouraged to replicate the Agency’s data collection methodology. 

In  the  reporting  period,  the  European  Court  of  Human  Rights  (ECtHR)  delivered  19 
judgments  that  Bosnia  and  Herzegovina  had  violated  rights  guaranteed  by  the  European 
Convention on Human Rights (ECHR) in 10 cases. These violations concerned the right to a 
fair trial, freedom of expression and protection of property. In the reporting period, there were 
666 new applications allocated to a decision body of the ECtHR, bringing the total number of 
applications  pending  before  the  Court  to  285.  The  Sejdić-Finci,  Zornić,  Šlaku,  Pilav  and 
Pudarić  ECtHR  rulings  on  electoral  rights  require  constitutional  amendments  to  ensure 
equality among all citizens; they have still not been implemented and remain under enhanced 
supervision.  

Bosnia  and  Herzegovina  still  has  not  taken  any  steps  in  adopting  a  comprehensive  policy 
framework  on  the  promotion  and  enforcement  of  human  rights,  including  countrywide 
strategies  on  human  rights,  non-discrimination,  and 
the  protection  of  minorities. 
Consequently, the protection of human rights continues to be uneven across the country.  

Bosnia and Herzegovina still needs to amend the Law on the Human Rights Ombudsman to 
strengthen  the  independence  and  effectiveness  of  this  body  and  designate  it  as  a  national 
preventive  mechanism  against  torture  and  ill-treatment  –  an  international  obligation  of  the 
country. The draft amendments were submitted to the Council of Ministers in December 2021 

9  In  line  with  the  terminology  of  European  institutions  the  umbrella  term  ‘Roma’  is  used  here  to  refer  to  a 
number of different groups, without denying the specificities of these groups. 

28 

 
 
                                                           
and  sent  for  parliamentary  procedure  only  in  August  2022.  The  term  of  office  of  the  three 
Ombudsmen  expired  in  November  2021;  new  members  were  appointed  only  in  September 
2022.  

The tripartite composition and consensual decision-making of the Ombudsman institution still 
needs to be revised in the mid-term to ensure its effective functioning. Its independence needs 
to be strengthened. The Ombudsman registered 2 946 complaints in 2021, a similar number as 
in  previous  years,  and  issued  315  recommendations,  of  which  198  were  fully  implemented. 
The Ombudsman has not opened any minor offence proceedings for non-compliance with its 
recommendations in the past 7 years, despite having the power to do so, nor has it initiated or 
intervened in administrative or judicial proceedings. It issued four special reports in 2021. 

As regards  torture and ill-treatment, Bosnia  and Herzegovina needs to  ensure compliance 
with Article 17 of OPCAT. Suspects in police stations and detention facilities face a serious 
risk of ill-treatment, while reports are processed slowly, cases are not handled carefully, and 
evidence  often  gets  lost.  As  a  result,  only  few  officers  have  been punished.  The  Council  of 
Europe’s  Committee  for  the  Prevention  of  Torture  visited  Bosnia  and  Herzegovina  in 
September 2021 to examine the treatment of persons deprived of liberty by police agencies, 
the  treatment  and  conditions  of  detained  remand  prisoners,  and  the  effectiveness  of 
investigations into allegations of police ill-treatment.  

No  steps  were  taken  to  adopt  a  state-level  framework  law  clearly  defining  countrywide 
criteria  on  the  rights  of  civilian  victims  of  war-time  torture  to  meet  its  pending  obligations 
under  the  Convention  against  Torture.  Bosnia  and  Herzegovina  still  needs  to  address  the 
August 2019 decision of the UN Committee against Torture (UNCAT) on providing all forms 
of  redress  to  victims  of  wartime  torture  through  an  effective  reparation  scheme.  The 
Republika  Srpska  entity  government  should  consider  waiving  court  fees  for  victims  of 
wartime torture to which statutes of limitations were applied in the past, as in some 200 cases 
victims faced repossession of property for defaulting on payments, which is a worrying trend.  

There is no countrywide strategy on the prison system, and no steps were taken to improve 
detention conditions, starting by harmonising the legislation across the country and bringing it 
in line with with European and international standards. The Federation entity took no steps to 
adopt legislation to enable the transfer of prisoners between entities, staff professionalisation 
and  a  parole  system.  Digitalisation,  reintegration  programmes,  and  coordination  with 
healthcare and social services need to be improved. The country should further expand the use 
of alternatives to detention, in particular in the Republika Srpska entity. While the new state 
prison is now working at full capacity, several prison facilities in the country remain in need 
of infrastructural improvement. Prison regimes also require modernisation. The Ombudsman 
received  91  complaints  from  persons  deprived  of  liberty  in  2021,  mostly  concerning 
healthcare and living conditions, and issued one recommendation.  

On  reconciliation,  Bosnia  and  Herzegovina  still  lacks  a  countrywide  policy  framework  for 
dealing with the legacies of the past, including a countrywide strategy on transitional justice. 
Political leaders continued to engage in historical revisionism, including genocide denial and 
glorification  of  war  criminals,  also  contesting  established  facts  and  the  independence  or 
impartiality  of  international  and  domestic  tribunals.  The  Republika  Srpska  assembly  denied 
validity  to  the  July  2021  executive  decision  of  High  Representative  Inzko  criminalising  the 
denial  of  genocide  and  the  glorification  of  war  criminals;  the  Constitutional  Court  quashed 
such  entity  legislation  in  July  2022.  In  July  2021,  the  Republika  Srpska  entity  also 
criminalised  describing  the  entity  or  its  peoples  as  aggressor  or  genocidal  creation,  with 
detention penalties from 6 months to 5 years; while no cases were reported in the past year, 
such a criminal designation risks having a chilling effect on freedom of expression.  

29 

 
 
Bosnia and Herzegovina is expected to act in a sovereign manner to promote an environment 
conducive to reconciliation in order to overcome the legacies of the war (Opinion key priority 
5).  The  Parliament  should  discuss  and  amend  the  criminal  code  to  regulate  genocide  denial 
and glorification of war  criminals  in  line with the 2008 EU Council framework decision on 
combating racism and xenophobia.  

Some positive steps were taken at local level. In November 2021, the City of Sarajevo set up a  
memorial  at  Kazani  commemorating  17  Serb  civilian  victims  of  war.  The  Brčko  District 
decided to build a joint memorial for all civilian war victims, the second in the whole country, 
and in July 2022 it adopted a law on civilian war victims. On the other hand, in May 2022, the 
police  forbade  a  march  on  the  30th  anniversary  of  the  ethnic  cleansing  of  Prijedor  (“white 
armbands”). 

The continued unresolved issue of  missing persons is  a matter of concern.  7 500 people are 
still missing as of June 2022 as a result of the conflict, of which 70 were identified in 2021, 
and 127 more in the first half of 2022. Further efforts are needed on a regional scale to solve 
the  issue.  There  was  no  progress  in  establishing  a  support  fund  for  the  families  of  missing 
persons, as provided for by the law, and improving the work of the Missing Persons Institute 
and the forensic capacities at state level. The law on missing persons remains to be amended.  

No  progress  was  made  in  aligning  legislation  with  the  EU  acquis  on  data  protection, 
including  the  General  Data  Protection  Regulation.  In  August  2022,  the  Presidency  ratified 
Protocol  223  amending  the  Council  of  Europe  Convention  for  the  protection  of  individuals 
with  regard  to  the  automatic  processing  of  personal  data.  No  steps  were  taken  to  make  the 
Personal  Data  Protection  Agency  more  independent  or  to  increase  its  human  and  financial 
resources necessary for the effective performance of its tasks and exercise of its powers. The 
Agency  needs  to  better  balance  the  protection  of  privacy  with  objectives  of  general  public 
interest,  notably  media  freedom,  electoral  integrity,  and  the  fight  against  corruption.  The 
Agency conducted 84 procedures ex officio in 2021 (101 in 2020). It received 183 complaints, 
conducted 79 inspections and issued 9 minor offence orders (compared to 168, 36 and 10 in 
2020). 19 administrative proceedings against decisions of the Agency were pending before the 
Court of Bosnia and Herzegovina (17 in 2020). While the state Parliament must consult the 
Agency on legislative proposals, other legislative assemblies are still not required to do so.  

Freedom  of  thought,  conscience  and  religion  continue  to  be  generally  upheld.  Cases  of 
discrimination, hate speech and hate crimes on religious grounds continue to occur. Incidents 
targeting  religious  sites  also  continue,  particularly  in  minority  and  returnee  areas,  as 
highlighted by the 9 January events in the  Republika Srpska entity. In June 2022, some 700 
engraved  memorials  in  Mostar’s  partisan  cemetery  were  destroyed  in  an  act  of  large-scale 
vandalism.  

----------------------------------------------------------------------------------------------------------------- 

Freedom of expression  

There is some level of preparation on freedom of expression. The country made no progress 
in  addressing  Opinion  key  priority  12  to  guarantee  freedom  of  expression  and  of  the  media 
and the protection of journalists. This requires ensuring the appropriate judicial follow-up in 
cases of threats and violence against journalists and media workers and ensuring the financial 
sustainability  of  the  public  broadcasting  system.  The  legislative  framework  needs  to  be 
aligned with European and international standards and fully enforced. Political influence over 
public broadcasters persists, and their financial sustainability has not been ensured. The law 
on the public broadcasting system remains unimplemented and entity-level legislation is still 
not  harmonised  with  this  Law.  Political  pressure,  intimidation  and  harassment  towards 

30 

 
 
journalists, including physical and verbal attacks, continued during the reporting period, and 
there was no appropriate institutional follow-up. Last year’s recommendations are still valid. 

In the coming year, Bosnia and Herzegovina should, in particular:  

  ensure the protection of journalists and a systematic institutional follow-up on threats and 

violence against them;  

  ensure the financial sustainability and political independence of public broadcasters, and 
harmonise entity legislation with the state-level law on the public broadcasting system;  

  adopt legislation on media ownership transparency and criteria on public advertising.  

Intimidation of journalists  

There  are  serious  concerns  about  political  pressure,  intimidation  and  threats  against 
journalists.  The  polarised  political  climate,  constant  verbal  attacks  and  nationalist  rhetoric 
have created a hostile environment for media freedom. High-level politicians continued their 
public  attacks  and  disparaging  remarks  against  journalists,  analysts  and  media  workers, 
particularly against women. The authorities continue to downplay the issue. Official country-
wide  data  collection  on  threats  and  attacks  against  journalists  and  media  workers  is  still 
lacking.  

The  BH  Novinari  journalists’  association  recorded  70  cases  of  journalists’  rights  being 
violated  in  2021  (69  in  2020,  56  in  2019).  The  Ombudsman  received  9  complaints  (11  in 
2020, 18 in 2019). The Online Media and Press Council received 509 complaints about hate 
speech  against  journalists.  Authorities  are  expected  to  act  swiftly  and  demonstrate  zero 
tolerance  for  threats  or  attacks  against  the  media,  including  by  ensuring  effective  police 
investigations and judicial prosecution leading to final convictions of the perpetrators.  

Legislative environment  

Although  defamation  has  been  decriminalised  since  2002,  politicians  and  public  officials 
continue  to  use  civil  suits  to  intimidate  journalists.  To  prevent  an  environment  that  forces 
journalists  into  self-censorship,  courts  should  step  up  their  efforts  to  ensure  an  expedient 
processing  of  defamation  cases  and  consistency  of  case-law  on  damages  awardsed. 
Legislation  on  free  access  to  information  and  hate  speech  remains  fragmented  and  is  not  in 
line  with  international  and  European  standards.  Legal  provisions  on  data  protection  and  on 
access  to  information  are  still  interpreted  in  a  way  that  protects  private  rather  than  public 
interests.  Municipal  regulations  on  public  order  that  threaten  administrative  fines  for  online 
comments (such as the one introduced in Cazin in March 2022) further shrink the space for 
freedom of expression.  

Implementation of legislation/institutions  

The  Communications  Regulatory  Agency  (CRA)  still  lacks  full  political  and  financial 
independence.  The  procedure  to  appoint  its  management  must  be  revised  to  improve  the 
public’s perception of it as a neutral and independent body. The mandate of the CRA Board 
has expired at the end of 2017; the Parliament has not appointed a new board for the whole 
2018-2022 term.  

Public service broadcaster  

The  state-level  public  service  broadcaster  is  in  serious  danger  of  shutting  down.  Following 
years of deprivation of stable funding, Radiotelevizija Bosne i Hercegovine (BHRT) is unable 
to pay salaries and suppliers. The tax authorities temporarily blocked its accounts in March-
April 2022 due to an outstanding debt of EUR 9 million. This is the result of the 2003 law on 

31 

 
 
the  public  broadcasting  system  not  being  enforced,  and  of  the  entity  laws  on  broadcasting 
being inconsistent with it, in particular as concerns the collection of fees. Since 2017, the debt 
of  Radio  Televizija  Republike  Srpske  (RTRS)  towards  BHRT  (over  EUR  31.5  million)  has 
been  subject  to  lengthy  litigation  in  entity  courts.  These  issues  pose  a  serious  threat  to  the 
financial independence and sustainability of the public broadcasting system.  

State  and  entity  public  broadcasters  remain  exposed  to  political  influence,  in  particular 
through  politically  controlled  steering  boards.  There  is  a  worrying  trend  of  self-censorship, 
heightened  in  the  context  of  Russia’s  war  of  aggression  against  Ukraine.  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. Republika Srpska’s RTRS spreads Russian and 
Serbian  disinformation  including  on  Russia’s  aggression  on  Ukraine  and  on  Bosnia  and 
Herzegovina’s  EU  accession  path.  Banja  Luka-based  provider  M-tel  continued  to  carry  the 
signal of the RT and Sputnik channels, despite Bosnia and Herzegovina’s alignment with EU 
sanctions  on  Russia  prohibiting  to  broadcast  content  from  these  Russian  state-sponsored 
media outlets. (See also Chapter 10 – Digital transformation and media) 

Economic factors  

No steps were taken to adopt legislation on media ownership transparency (including on the 
prevention  of  hidden  media  concentration),  legislation  on  advertising  or  criteria  for  the 
distribution  of  subsidies.  The  advertising  practices  of  publicly  owned  businesses,  such  as 
telecom  companies,  and  advertising  agencies  linked  to  political  parties  continue  to  harm 
media integrity. Local broadcasters that receive funding from local authorities remain subject 
to  political  pressure  and  influence.  The  growing  number  of  strategic  lawsuits  against  public 
participation (SLAPP) further fuels self-censorship. Two SLAPP cases were reported in 2021, 
with extremely high compensation claims threatening the financial survival of the media.  

The  position  of  female  and  male  journalists  is  unequal.  During  the  pandemic,  female 
journalists and media professionals were particularly confronted with indirect discrimination 
and suffered more severe professional consequences: more than 10% of female journalists lost 
their jobs in this period, and more than 95% of them suffered financially.  

Freedom of artistic expression 

Freedom  of  artistic  expression  is  guaranteed  by  legislation  and  generally  respected.  No 
official  data  on  intimidation  of  artists  is  collected.  Although  authorities  have  not  formally 
introduced restrictions, the environment for reconciliation-related themes is challenging. The 
2021  award-winning  film  “Quo  Vadis,  Aida?”  about  the  Srebrenica  genocide  was  not 
screened in cinemas in the Republika Srpska entity or by the entity’s public broadcaster.   

Internet  

Self-regulation of online media has a limited effect, and online platforms continue to be used 
to spread hate speech and disinformation. The Press and Online Media Council received 1 073 
complaints  in  2021,  almost  all  related  to  online  content.  Criminal  prosecution  is  limited  to 
inciting religious and ethnic hatred on the internet or social networks.  

Professional organisations and working conditions  

Journalism in Bosnia and Herzegovina remains a precarious profession, with low wages and 
little  job  security.  Labour  rights  are  hardly  respected,  unionisation  is  low,  and  there  are  no 
branch  collective  agreements  for  media  workers.  Consequently,  many  journalists  receive  a 
salary  significantly  lower  than  average  while  also  working  overtime.  The  Press  and  Online 
Media  Council’s  media  code  remains  the  basis  of  self-regulation,  but  compliance  is 
inconsistent. 

32 

 
 
----------------------------------------------------------------------------------------------------------------- 

Laws on freedom of assembly have yet to be harmonised across the country and brought in 
line  with  European  standards,  in  particular  on  grounds  for  restriction  and  responsibility  of 
organisers.  The  2020  Brčko  District  law  on  freedom  of  assembly,  largely  in  line  with 
European standards, should be used as a model in other jurisdictions. The third Sarajevo Pride 
march took place in June 2022. The exercise of freedom of assembly remains restricted in the 
Republika Srpska entity, where in May 2022 local police forbade the “white armbands” march 
on the 30th anniversary of ethnic cleansing in Prijedor. 

Freedom  of  association  continues  to  be  generally  respected.  However,  human  rights 
defenders  dealing  with  issues  perceived  as  sensitive  (e.g.  anticorruption,  women’s  rights, 
LGBTIQ  persons’  rights,  migrants,  the  environment)  continue  to  be  subject  to  threats, 
harassment,  verbal  abuse  and  physical  attacks.  The  authorities  have  failed  to  promptly  and 
systematically  condemn  and  properly  investigate  such  attacks.  As  a  key  priority,  the 
authorities  need  to  promote  a  conducive  and  enabling  environment  for  civil  society,  and 
ensure effective consultation on legislative developments on freedom of association. 

Labour  and  trade  union  rights  issues  are  covered  in  Chapter  19  –  Social  policy  and 
employment.   

Regarding  property  rights,  no  steps  were  taken  to  update  and  interconnect  the  entity-level 
cadastre and land registry databases and no solution was found to pending repossession cases. 
The Commission for real property claims of displaced persons and refugees is inoperative.  

Concerning  non-discrimination  policies,  there  was  no  progress  in  adopting  countrywide 
human  rights  and  anti-discrimination  strategies.  The  2009  law  on  the  prohibition  of 
discrimination,  which  aims  at  full  alignment  with  the  EU  acquis,  is  still  not  applied 
effectively.  Discrimination  cases  have  started  to  be  registered  separately  within  the  HJPC-
managed Case Management System since early 2021, which should allow for data collection 
on all categories and types of discrimination as provided by the law.  

Discrimination  continues  to  be  under-reported,  particularly  at  the  workplace,  and  judicial 
practice  has  shown  a  lack  of  uniform  application  of  burden  of  proof,  excessive  length  and 
non-enforcement  of  final  decisions.  The  Ombudsman  registered  173  cases  in  2021  (288  in 
2020, 206 in  2019).  The ECtHR  Sejdić-Finci case law has  yet  to  be implemented. Disputes 
over  education  continue,  whilst  systemic  solutions  for  ensuring  inclusive  and  non-
discriminatory education are not in place. The common core curriculum is not completed or 
applied  throughout  the  country,  and  the  availability  of  teaching  in  the  national  groups  of 
subjects  remains  limited. No progress was made  in  eliminating the practice of ‘two schools 
under one roof’, which is in breach of a 2014 ruling by the Federation entity Supreme Court. 
Following a ruling of the Constitutional Court in July, in August 2021 the  Federation entity 
Supreme  Court  established  discrimination  also  concerning  the  ‘two  schools  under  one  roof’ 
practice in the Central Bosnia Canton. The name of the Bosnian language is not recognised in 
schools  in  the  Republika  Srpska  entity,  leading  to  recurrent  school  boycotts;  the  related 
Constitutional Court decisions have yet to be implemented.  

Legislation on hate crimes is harmonised across the four criminal codes in the country. Entity-
level  legislation  criminalises  hate  speech  only  when  causing  national,  racial  and  religious 
hatred  and  it  still  needs  to  be  aligned  with  the  EU  acquis.  Failure  to  identify  acts  as  hate 
crimes and the high burden of proof still makes it difficult to establish intent, leading to few 
indictments  and convictions. 134 ethnic-related hate incidents  were recorded in  2021, and 8 
convictions were handed down in 2021 (119 and 3 in 2020, 131 and 1 in 2019). 13 trials are 
ongoing. The case law on hate crimes is not consistent. The authorities need to take concrete 

33 

 
 
measures  to  counter  hate  speech,  particularly  in  official  discourse.  The  authorities  do  not 
monitor or enforce the prohibition of hate speech in online media. 70 reports were filed and 
11 rulings, of which 8 convictions, were handed down for hate speech in 2021, compared to 
41 reports and 2 convictions in 2020. The Council of Europe Convention on cybercrime and 
its additional protocol is only partially implemented.  

Legislation on gender equality remains to be harmonised across the country and effectively 
enforced. The country has a 2018-2022 Gender Action Plan, which has been implemented as 
planned  with  regard  to  addressing  domestic  violence.  Greater  involvement  and  political 
commitment needs to be ensured however in its implementation with clearly defined steps and 
milestones, tasks, and responsibilities. An action plan on women, peace and security is also in 
place and significant efforts were made across the country in order to create an environment 
supportive of greater participation of women in the police and in the army. While their share 
increases steadily, women are underrepresented in higher ranks. More participation of women 
in  decision-making  and  in  security  and  peace  institutions,  an  effective  mechanism  of 
monitoring  and  accountability  systems,  and  adequate  funding  from  the  budget  for 
implementing the Action Plan remain priorities.  Women are under-represented in politics and 
public life. Gender impact assessments are not carried out as required by law. The gender pay 
gap remains significant at around 25%. The treatment of maternity, paternity and family leave 
continues to differ between entities and among cantons. The institutional response to gender-
based violence needs to be improved, including on protective measures, victim support, legal 
aid and safe accommodation. Bosnia and Herzegovina needs to accelerate the prosecution of 
crimes  of  sexual  violence,  provide  reparation  to  women  victims  of  war  crimes,  and  secure 
witness protection. Data collection needs to be improved to enable the development of sound 
policies targeting key gender gaps, and provide relevant data on gender-based violence. The 
pandemic had the most negative effects on the economic wellbeing of women and girls. (Also 
see Chapters 19 and 28; on women victims of trafficking in human beings, see Chapter 24) 

As regards the rights of the child, Bosnia and Herzegovina still needs to develop and adopt a 
new  action  plan  on  child  protection  to  replace  the  one  for  2015-2018.  In  2021,  the 
Ombudsman received 190 complaints on children’s rights (190 in 2020, 198 in 2019). There 
were  1 103  children  without  parental  care  in  2020  (1  623  in  2019),  many  of  which  are 
children with disabilities. Transition towards community-based care continues to progress at a 
slow  pace.  In  order  to  ensure  the  best  interest  of  the  child  and  avoid  institutionalisation, 
measures  are  required  to  prevent  family  separation  and  provide  foster  care  and  alternative 
solutions,  as  well  as  support  to  children  leaving  care  institutions  at  the  age  of  18.  Child 
exploitation  and child begging remain a serious concern  and need to  be addressed urgently. 
Underreporting  of  cases  of  violence  against  children  is  a  concern.  Some  children  remain 
without compulsory health insurance. Marginalised groups, such as the Roma, face multiple 
forms of discrimination; this affects girls and women in a particular way. The authorities need 
to  step  up  efforts  to  collect  precise  and  consistent  data  on  violence  against  children  and  on 
child  poverty.  Unaccompanied  migrant  children  face  specific  challenges,  such  as  accessing 
safe  accommodation  and  asylum  procedures.  1 878  unaccompanied  migrant  children  were 
identified  in  2021  (351  in  2020,  533  in  2019).  817  were  appointed  a  legal  guardian,  as 
provided for by law (987 in 2020, 304 in 2019). Alternatives must urgently be found to the 
detention of irregular migrant families with children, and the registration of births of children 
of undocumented migrants must be prioritised.  

Bosnia  and  Herzegovina  needs  to  strengthen  the  implementation  of  child-friendly  justice 
including  for  children  belonging  to    minorities,  migrant  children    and  children  with 
disabilities.  Entity-level  laws  on  juvenile  justice  have  not  been  fully  implemented  or 
harmonised  with  each  other.  The  absence  of  separate  units  for  juveniles  during  pre-trial 

34 

 
 
detention  and  in  police  stations  remains  a  serious  breach  of  international  standards.  Use  of 
alternative measures needs to be stepped up to ensure detention is only used as a measure of 
last  resort.  Only  limited  reintegration  measures  are  available  to  juveniles  upon  release  from 
detention.  By  July  2022,  there  were  29  minors  in  prisons  (22  by  September  2021,  39  by 
December 2021).  

Persons  with  disabilities  remain  among  the  most  vulnerable  groups  and  there  was  no 
progress in addressing the concerns previously identified, including as regards deprivation of 
legal  capacities,  status-based  discrimination,  accessibility.  Both  entities  adopted  strategic 
frameworks for persons with disabilities. The law continues to allow persons with disabilities 
to be deprived of their legal capacity through a judicial process  – in violation of international 
conventions. The country needs to move from a status-based approach (with war veterans and 
civilian victims of war enjoying priority) to one based on needs, with a uniform definition of 
disability, and harmonised eligibility criteria, rights and standards of social protection across 
the country. Persons with disabilities continue to face hurdles to access education, healthcare 
and social assistance. The issue of accessibility to public buildings needs to be addressed in a 
systematic manner. The Council for Persons with Disabilities needs to be further engaged in 
all relevant processes. The authorities also need to improve data collection, including gender-
disaggregated data. 

Children  with  disabilities  remain  one  of  the  most  marginalised  and  excluded  groups,  facing 
stigma and discrimination, and inadequate services, especially in health and education. Many 
continue  to  be  placed  in  residential  institutions  –  a  severe  violation  of  their  rights  and 
their 
international  conventions. 
development and participation in society and exposes them to mistreatment and abuse. There 
is still no strategy on deinstitutionalisation that would enable multisectoral support to children 
and  adults  including  the  capacity  building  and  strenghtening  of  human  resources  of  public 
services. (see also Chapter 19 – Social policy and employment) 

Institutionalisation  of  children  negatively 

impacts 

In July 2022, the Council of Ministers adopted the action plan on the rights of lesbian, gay, 
bisexual, transgender, intersex and queer (LGBTIQ) persons which had bendeveloped in 
2020.  Active  and  persistent  engagement  is  needed  in  order  to  achieve  its  objectives.  While 
legislation  is  harmonised  and  includes  provision  on  hate  crimes  on  grounds  of  sexual 
orientation  and  gender  identity,  the  effective  application  of  the  criminal  code  provisions 
through  prosecution  of  hate  crimes  and  hate  speech  against  LGBTIQ  persons  remains 
insufficient.  Same-sex  couples’  social  and  economic  rights,  including  the  right  to  a  family 
life,  are  not  recognised.  The  report  identifying  the  necessary  legislative  amendments  to 
address  this  issue  is  still  pending  adoption  by  the  Federation  entity  government  since  April 
2021.  The  social  inclusion  of  intersex  and  transgender  persons,  who  are  particularly 
marginalised, has yet to improve. In April 2022, the Municipal Court in Sarajevo issued a first 
instance  judgement  recognising  for  the  first  time  a  violation  of  the  antidiscrimination  law 
against  LGBTIQ  persons  in  a  case  concerning  online  hate  speech  by  an  elected  cantonal 
representative.  The  third  Sarajevo  Pride  march  took  place  on  25  June  2022.  The  Sarajevo 
Open Centre documented 14 hate incidents against LGBTIQ persons in 2021, including cases 
of domestic violence. 

The  procedural  rights  of  suspects,  accused  persons,  witnesses  and  victims  are  generally 
upheld,  although  access  remains  uneven  across  the  country.  The  four  criminal  procedure 
codes  are  yet  to  be  further  harmonised,  and  their  enforcement  is  inconsistent.  The  right  to 
immediate access to a lawyer while in police detention is essential to the procedural rights and 
Bosnia  and  Herzegovina  needs  to  take  efficient  measures  to  ensure  it.  Laws  to  protect  the 
right  to  trial  within  a  reasonable  time  are  pending  adoption  at  the  state  level  and  in  the 
Federation  entity.  This  is  key  to  address  systemic  violations  and  ensure  the  right  to  an 

35 

 
 
effective remedy, in line with Constitutional Court rulings. 

Without comprehensive coverage and clear minimum common standards, the right to legal aid 
continues  to  be  upheld  unevenly,  to  the  detriment  of  the  most  vulnerable.  The  legal 
framework needs to be completed  by adopting laws in the Federation entity and the Central 
Bosnia  Canton.  A  needs  assessment  is  required  to  identify  and  address  the  main  gaps  and 
ensure effective equal access to justice for all, irrespective of the place of residence. Bosnia 
and Herzegovina has the highest  legal  aid  budget  and number of cases per inhabitant in  the 
region with 712 cases in 2020, double the Western Balkan median of 306, albeit decreasing 
from 876 in 2018.  

The participation in political and public life of members of national minorities remains low. 
No progress was made towards adopting a countrywide strategy on national minorities. Inter-
ethnic  relations  in  the  country  remain  fragile.  The  recommendations  of  the  4th  Framework 
Convention for the Protection of National Minorities review cycle from November 2017 for 
the authorities to condemn statements of politicians and public figures inciting ethnic hatred 
and to take measures promoting intercultural dialogue and understanding remain. A national 
minorities’  council  in  the  Brčko  district  was  established  in  May  2022.  The  national 
minorities’  councils  should  become  more  active  in  developing  practical,  political  and 
legislative  initiatives.  In  2021,  the  Ombudsman  received  3  complaints  concerning  minority 
rights (compared to 3 in 2020 and 7 in 2019) and issued one recommendation.  

The Roma are the most vulnerable and disadvantaged minority. Anti-Roma stereotypes and 
prejudices, discrimination and anti-gypsyism still hinder their social inclusion.   

Roma women in particular face multiple forms of discrimination. They often lack resources, 
access  to  services,  awareness  about  their  rights  an  information  on  protection  mechanisms. 
Roma  women's  rights  are  also  violated  in  cases  of  domestic  violence,  early  marriages, 
trafficking in human beings and labour exploitation of children.  

As  one  of  the  17  officially  recognised  national  minorities,  the  Roma  are  protected  by  the 
antidiscrimination law. In April 2022, the Council of Ministers adopted a countrywide action 
plan  for  the  social  inclusion  of  Roma  men  and  women  2021-2025,  encompassing 
antidiscrimination  and  combatting  anti-gypsyism,  housing,  employment,  education  and 
healthcare.  Its  strategic  goals  and  measures  are  largely  harmonised  with  the  Poznan 
Declaration. The implementation of the Action Plan will require appropriate funding from all 
levels of government, reversing the declining trend. as well as constant monitoring, including 
by the Roma Advisory Board (Roma Committee). 12 local communities started revising their 
local Roma action plans. 

Upon  completion  of  the  mapping,  26  cities  and  municipalities  identified  issues  related  to 
informal settlements and housing units. No progress was made in developing a methodology 
for  data  collection  nor  in  developing  a  policy  for  the  legalisation  of  informal  economy 
practices  concerning  the  Roma.  Discrimination  in  employment  remains  rampant,  with  very 
high  unemployment  rates.  Compulsory  education  enrolment  rates  have  increased,  but  the 
number  of  school  drop-outs  is  still  very  high.  While  classes  or  schools  are  not  segregated, 
there  is  no  teaching  in  and  of  the  Romani  language,  and  the  awareness  of  Roma  culture 
among the rest of the population is very limited. Around two thirds of Roma have access to 
healthcare; children outside education and elderly Roma face the biggest hurdles. The process 
of civil registration is well advanced; a roadmap to end statelessness has been developed. No 
step was taken to remove administrative obstacles, including residence requirements for birth 
registration  and  for  access  to  healthcare  and  education,  and  to  recognise  documents  for 
children  born  abroad.  The  authorities  acted  during  the  pandemic  to  support  the  most 
vulnerable, however the grants allocated for the social inclusion of the Roma were halved.  

36 

 
 
Bosnia  and  Herzegovina  hosts  around  100 000  refugees  and  internally  displaced 
persons, following  the  conflict  in  the  1990s,  of  which  1 099 families (2 810 persons)  still 
live  in  collective  centres  and  alternative accommodation. Minority returnees are among the 
most common targets of ethnically driven hate speech and hate crimes, as highlighted during 
the  9  January  events  in  the  Republika  Srpska  entity.  The  2010  revised  strategy  for  the 
implementation  of  Annex  VII  to  the  Dayton  Peace  Agreements  has  not  yet  been  fully 
implemented. To complete the process of return and fulfil its obligations to allow closure of 
Annex  VII,  Bosnia  and  Herzegovina  should  ensure  full  cooperation  among  all  levels  of 
government  in  order  to  ensure  the  enjoyment  of  the  rights  of  returnees  and  harmonise  their 
access  to  services  and  resources.  The  country  also  needs  to  provide  adequate  humanitarian 
assistance and protection (including shelter, food and medical assistance) and effective access 
to  the  asylum  procedure  to  the  asylum  seekers  and  migrants  present  on  its  territory  since 
2018.  Arbitrary  limitations  to  the  human  rights  of  foreigners,  including  restrictions  of 
movement  introduced during the pandemic, should be removed,  and the  respect  of the  non-
refoulement principle should be ensured. (See also Chapter 24)  

2.2.2  Chapter 24: Justice, freedom and security   

The  EU  has  common  rules  for  border  control,  visas,  residence  and  work  permits,  external 
migration  and  asylum.  Schengen  cooperation  entails  lifting  border  controls  inside  the  EU. 
Member  States  also  cooperate  with  Bosnia  and  Herzegovina  in  the  fight  against  organised 
crime and terrorism, and on judicial, police and custom matters, all with the support of the 
EU justice and home affairs agencies.  

Bosnia and Herzegovina has achieved some level of preparation to implement the EU acquis 
in this area. Limited progress was made in this chapter, in particular on Opinion key priority 
8  on  managing  migration  and  asylum.  Further  significant  steps  have  been  taken  towards 
establishing  a  sustainable  migration  management  system.  The  Ministry  of  Security  has 
continued  efforts  to  improve  coordination  and  take  over  responsibility  for  managing 
migration,  which  should  be  supported  by  all 
levels  of  government.  Last  year’s 
recommendations remain pending. The country has several strategies in place, and legislation 
in some areas is broadly aligned with the EU acquis. However, legislation is not harmonised 
across the country, and institutional cooperation and coordination remain weak. As a result, 
implementation is often uneven and unsatisfactory.  

In the coming year, Bosnia and Herzegovina should in particular: 

  adopt  and  implement  a  strategy  for  preventing  and  combating  terrorism  and  violent 
extremism  (2021-2026),  and  urgently  adopt  and  start  implementing  legislation  on  anti-
money laundering and combating the financing of terrorism (AML/CFT) in line with the 
EU  acquis,  to  avoid  facing  the  possibility  of  being  again  “greylisted”,  i.e.  listed  as  a 
jurisdiction  under  increased  monitoring  for  strategic  AML/CFT  deficiencies  by  the 
international  standard  setting  body  the  Financial  Action  Task  Force  (FATF)  after 
evaluation  of  the  regional  body,  the  Committee  of  Experts  on  the  Evaluation  of  Anti-
Money Laundering Measures and the Financing of Terrorism (MONEYVAL);  

  urgently adopt and implement the strategy and action plan on migration; ensure effective 
coordination  of  border  management  and  migration  management  capacity,  including  the 
fair distribution of reception capacity among all entities and cantons; and guarantee more 
efficient access to asylum procedures; 

  adopt the action plan on drugs; improve civilian oversight mechanisms over police, at all 
levels; consistently appoint police directors on a merit basis; fully align with the EU list of 
visa-required third countries.   

37 

 
 
Fight against organised crime 

Bosnia  and  Herzegovina  is  at  an  early  stage/has  some  level  of  preparation  in  the  fight 
against organised crime. No progress was made in addressing Opinion key priority 7 on the 
fight  against  organised  crime  and  last  year’s  recommendations,  which  are  still  valid.  The 
country has several strategies in place, notably on trafficking in human beings and integrated 
border  management.  However,  the  legal  framework  is  not  harmonised  across  the  country. 
There are systemic shortcomings in the operational cooperation of law enforcement agencies, 
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  largely  ineffective.  A  proactive 
approach is essential to stop criminal infiltration in the political, legal and economic systems. 
The  country  also  needs  to  step  up  cooperation  with  Eurojust  and  Europol.  Bosnia  and 
Herzegovina  appointed  a  national  coordinator  for  the  European  Multidisciplinary  Platform 
Against Criminal Threats (EMPACT).   

In the coming year, Bosnia and Herzegovina should in particular:  

  adopt  and  implement  a  strategy  and  action  plan  for  the  fight  against  organised  crime, 
based  on  the  newly  adopted  serious  and  organised  crime  threat  assessment  (SOCTA); 
implement  the  national  strategy  on  trafficking  in  human  beings  and  improve  referral  to 
adequate support to victims; 

  strengthen  institutional  cooperation  among  law  enforcement  agencies  as  wll  as  with 
prosecutors’  offices  and  courts,  notably  by  establishing  specialised  multi-agency 
investigation  teams  for  complex  cases;  improving  mutual  /  standardised  access  to 
databases  and  the  secure  /  timely  exchange  of  information;  strengthening  financial 
investigations; and adopting standard operating procedures to run financial investigations;  

  finalise the establishment of  a fully-functional national contact point for cooperation with 
Europol,  sign  an  agreement  on  operational  cooperation  with  Eurojust,  and  establish  a 
firearms focal point;  

Institutional set-up and legal alignment 

There  are  multiple  law  enforcement  agencies  in  the  country,  out  of  which  15  have 
investigative powers. The police in Bosnia and Herzegovina has 438 police officers per 100 
000 inhabitants in 2021, compared with an EU average of 333 (Eurostat, 2018-2020). 

There was  limited improvement and harmonisation  of  police legislation at  all levels,  which 
hampers  effective  police  accountability,  integrity  and  cooperation.  The  professionalism  and 
accountability  of  law  enforcement  agencies  needs  to  be  significantly  improved.  There  was 
limited  progress  in ensuring  merit-based  and  transparent  appointments  and  promotions  by 
independent boards, free of political interference, notably for key managerial positions as well 
as  for  parliamentary  independent  board  members.  Political  interference  remains  a  concern. 
Women are still under-represented in positions of command. Failure to comply with the rule 
of  law  and  democratic  principles,  including  political  influence,  remain  a  major  concern. 
Amendments  adopted  to  the  law  on  internal  affairs  and  the  law  on  police  officials  in  the 
Herzegovina-Neretva  Canton  raised  concerns.  These  amendments  lead  to  ethnic  criteria 
prevailing  over  professional  criteria  for  the  selection  of  police,  which  may  affect  the 
independence and professionalism of the police administration.  

The legal framework on the fight against organised crime is only partially aligned with the 
EU acquis.  It is of particular concern that, since 2010, despite several legislative initiatives, 

38 

 
 
Bosnia and Herzegovina has not developed capacity for asset management at the state level. 
Extended  and  third-party  confiscations  are  possible,  but  they  are  rarely  used.    In  2021 
extended  confiscation  was  proposed  in  7  cases  and  1  first-instance  decision  and  no  second-
instance  decision  were  delivered  by  courts.  Confiscation  of  property  from  third  parties  was 
proposed  in  10  cases,  and  3  first-instance  court  decisions  and  2  second-instance  court 
decisions were delivered. The country should establish or designate an asset recovery office in 
charge  of  identifiying  and  tracing  criminal  assets  to  improve  effectiveness  and  facilitate 
operational  cooperation  with  EU  Member  States.  The  country  should  also  step  up  the  fight 
against transnational organised crime networks.  

The  legislation  on  trafficking  in  human  beings  needs  to  be  further  aligned  with  the  EU 
acquis, notably on sanctions. A 2020-2023 strategy is in place and being implemented. Bosnia 
and Herzegovina should step up its efforts to prevent and combat trafficking in human beings. 
It  should  improve  the  early  identification  of  victims  and  their  referral  to  adequate  support, 
assistance and protection services. 

Bosnia  and  Herzegovina  needs  to  further  align  its  legislation  on  cybercrime  with  the  EU 
acquis. The country is party to the Budapest Convention on Cybercrime, and it should sign its 
Second Additional Protocol on enhanced co-operation and disclosure of electronic evidence, 
which was opened for signature in May 2022. Bosnia and Herzegovina aligned with the EU 
position in negotiations on the United Nations Convention on Cybercrime. The country needs 
to complete the strategic framework on fighting cybercrime; a strategy is only in place in the 
Republika Srpska entity.  

Legislation  on  the  possession  of  weapons  by  civilians  needs  to  be  harmonised  and  further 
aligned  with  the  EU  acquis.  New  legislation  should  be  modeled  on  the  Una-Sana  Canton’s 
2021 law on weapons, which is broadly in line with the EU acquis. The legislative framework 
on  explosives  for  civil  use  and  the  transport  of  dangerous  goods  remains  fragmented  and 
needs  to  be  completed  and  aligned  with  the  EU  acquis  across  the  country,  including  on 
marking and deactivation standards.  

Legislation  on  anti-money  laundering  and  counter  terrorism  financing  aligned  with  the 
fourth and fifth EU directives on anti-money laundering and countering financing of terrorism 
(AML/CFT)  should  urgently  be  adopted.  An  updated  risk  assessment  needs  to  be  prepared, 
followed  by  an  action  plan.  Its  absence  hampers  the  country’s  capacity  to  combat  terrorism 
and prevent violent extremism, among other objectives. If these necessary steps are not taken, 
there  is  a  real  possibility  that  Bosnia  and  Herzegovina  will  again  be  listed  as  a  jurisdiction 
under increased monitoring for strategic AML/CFT deficiencies by the international standard-
setting  body,  the  Financial  Action  Task  Force,  after  evaluation  by  the  regional  body 
MONEYVAL.  

The country lacks a strategic framework for fighting serious and organised crime. It should 
adopt  a  new  strategy  and  action  plan  based  on  the  recently  adopted  serious  and  organised 
crime threat assessment (SOCTA) in line with Europol methodology.  

Bosnia and Herzegovina should demonstrate results in implementing the 2021-2024 strategy 
and action plan for the control of small arms and light weapons, as well as the roadmap for a 
sustainable solution to arms control in the Western Balkans (WB SALW Control Roadmap).  

Implementation and enforcement capacity 

In 2021, there were 53 investigations into organised crime with 735 suspects, 28 indictments 
with  190  accused,  22  convictions  with  134  convicted,  and  23  acquittals.  This  represents  an 
increase compared with 2020 (359 suspects, 22 indictments with 103 accused and 7 sentences 
with 54 convicted). In 8 cases, plea bargain agreements were concluded with 90 individuals (4 

39 

 
 
and 27 in 2020). There were 181 orders to conduct investigations against 198 individuals for 
cybercrime  including  for  online  child  sexual  abuse  in  2021,  (125  investigations  against  129 
individuals  in  2020),  with  54  indictments  against  65  individuals  (45  and  41  in  2020).  The 
number of convictions in 2021 is still very low, with 43 convictions for 51 individuals (26 and 
31 in 2020) of which 25 convictions for 27 individuals resulted in suspended sentences (58%).  

The capacity to effectively dismantle criminal organisations is seriously hampered by the lack 
of harmonised criminal legislation in the country, which is exacerbated by weak institutional 
coordination.  While  there  is  some  progress  in  carrying  out  joint  operations  tackling  serious 
crimes,  there  is  still  a  systematic  lack  of  operational  cooperation  and  limited  exchange  of 
intelligence  at  some  levels.  Some  progress  was  made  in  the  cooperation  and  exchange  of 
criminal data between law enforcement agencies in Bosnia and Herzegovina and counterparts 
in the region. The absence of a register of beneficial owners, which competent authorities may 
access without restriction, contributes to these shortcomings.   

There is no overall policy for carrying out timely and systematic financial investigations and, 
where conducted, results have been insignificant. The High Judicial and Prosecutorial Council 
issued guidelines for chief prosecutors on the mandatory launch of financial investigations in 
corruption, organised crime and money laundering cases. These need to be followed up and 
implemented effectively. In 2021, there were 61 investigations into money laundering (134 in 
2020) involving 222 individuals, 49 confirmed indictments against 66 suspects (125 in 2020), 
and 55 convictions against  70 defendants  (respectively 120 and 123 in  2020). There were 7 
prison sentences against 15 individuals, and 48 fines against 55 individuals. 

The  Financial  Investigation  Unit  within  the  State  Investigation  and  Protection  Agency 
(SIPA) needs to fulfil its responsibilities more efficiently. In 2021, SIPA submitted 12 reports 
against  25  individuals  and  eight  legal  entities  to  the  prosecutors’  offices  on  suspicion  of 
financial crimes, including money laundering, in the amount of EUR 5.5 million. For money 
laundering as a stand-alone crime, in 2021 there were 33 investigations against 36 individuals, 
34 confirmed indictments against 35 individuals, 41 convictions against 42 individuals, out of 
which only one was sentenced to prison.  

The tools for freezing, managing and confiscating criminal assets are not effective enough. 
Confiscating criminal assets needs to become a strategic priority in the fight against organised 
crime, terrorism and high-level corruption. Criminal assets need to be systematically frozen, 
and their management need to be improved. Law enforcement authorities need to collect and 
analyse data on asset seizure and confiscation as a tool to improve the effectiveness of these 
sanctions. The value of asset confiscations pursuant to first-instance and final court verdicts in 
2021 amounted to over EUR 4 million compared with over EUR 11.5 million in 2020.  

Proactive investigations that start with intelligence-led policing remain rare, compared with 
those from received reports. The insufficient systematic cooperation between law enforcement 
agencies continues to seriously affects the quality of investigations, albeit some progress was 
achieved with multi-agency police operations targeting serious crime.  

Arrangements for practical cooperation between prosecutors’ offices and the police are in 
place,  but  require  structural  improvements  to  guarantee  more  effective  judicial  follow-up, 
prevent  procedural  delays,  and  introduce  good  practices.  Ineffective  cooperation  between 
police and prosecutors have hindered trials, including a corruption case involving a high-level 
politician. The quality of reports, the collection, analysis and sharing of data, and capacities of 
specialised 
improved.  Further  efforts  should  be  made  on 
teams  should  be 
communication, coordination and sharing of information.  

joint 

The electronic data  exchange system  from  the records of police  authorities and prosecutor's 

40 

 
 
offices needs to be fully functional and ready for use by all signatories of the 2009 agreement. 
Forensic  capacity  remains  fragmented.  There  is  no  operational  countrywide  DNA  database, 
and DNA-profiling capacity is limited. There is no swift exchange of forensic data with other 
countries.  The  creation  of  a  new  automated  fingerprint  information  system  (AFIS)  is  long 
overdue.  Although  required  by  law,  there  is  no  effective,  coordinated  and  consistent 
countrywide  approach  to  using  undercover  investigators.  The  use  of  special  investigative 
measures need to improved; suitable equipment and staff are also needed.   

The March 2017 agreement on operational and strategic cooperation with Europol is not yet 
fully implemented; the contact point is not yet operational, although efforts are ongoing. As a 
result,  exchange  of  information  with  Europol  is  still  taking  place  through  a  unit  in  the 
Directorate for Coordination of Police Bodies of Bosnia and Herzegovina, whose mandate has 
expired, and with which the Republika Srpska entity has suspended operational cooperation. 
Making  the  Europol  contact  point  fully  operational  will  enable  resuming  direct  cooperation 
between  Europol  and  all  police  bodies  in  the  country,  allowing  the  latter  to  make  use  of 
Europol’s  services  and  operational  tools.  In  April  2022,  the  Council  of  Ministers  also 
approved deploying a liaison  officer to  Europol  in the Hague;  this is  still subject  to  the full 
establishment of the contact point. Messages were exchanged through the Secure Information 
Exchange Network Application  (SIENA) system. The  roll-out  of SIENA  across the country 
should  continue.  Bosnia  and  Herzegovina  has  no  access  to  SIENA  on  counter-terrorism.  In 
2021, the number of new cases opened based on cooperation with Europol decreased to 1 022 
(1 112 cases in 2020). Bosnia and Herzegovina’s participation in Europol’s analysis projects 
has been put on hold and the use of Europol products and services has been very limited.  

Bosnia  and  Herzegovina  participates  in  the  European  Multidisciplinary  Platform  against 
Criminal Threats (EMPACT).  In 2022, the country committed to participate in 9 operational 
actions  in  5  of  the  15  EMPACT  operational  action  plans  (16  in  2021).  Bosnia  and 
Herzegovina also appointed a national EMPACT coordinator.  

Bosnia and Herzegovina continued to  participate actively in  the EMPACT joint  action days 
(JADs). These included (i) the JAD South East Europe 2021, promoting closer cooperation to 
tackle firearms trafficking, migrants smuggling and drugs trafficking; (ii) the JAD Mobile 4, 
targeting  motor  vehicle  crimes  including  smuggling  stolen  vehicles  and  spare  parts  via 
external  borders,  and  associated  document  fraud;  and  (iii)  the  JAD  Danube  6,  focused  on 
combating migrants smuggling, trafficking in human beings and document fraud. 

Bosnia and Herzegovina has  not  yet  signed the agreement between the parties to  the Police 
Cooperation  Convention  for  Southeast  Europe  on  the  automated  exchange  of  DNA, 
dactyloscopic and vehicle registration data, nor its implementing agreement. 

Legislation  on  trafficking  in  human  beings  needs  to  be  further  aligned  with  EU  acquis, 
especially  on  sanctions.  In  2021,  56  potential  victims  of  trafficking  in  human  beings  were 
detected  (49  children  and  7  adults,  compared  with  70  and  34  in  2020).  There  were  26 
perpetrators convicted in 2021, and 50 investigation orders were issued against 60 individuals. 
Bosnia  and  Herzegovina  still  has  no  fully  functional  referral  mechanism  for  trafficking 
victims.  Coordination  improved  thanks  to  the  work  of  a  task  force  against  trafficking, 
established  by  the  Council  of  Ministers,  and  the  regional  monitoring  teams  at  entity  and 
cantonal level. Participation of the Republika Srpska entity representatives in the coordination 
teams  remains  limited.  The  authorities  should  better  detect  and  identify  victims  and 
perpetrators  by  standardising  and  improving  evidentiary  proceedings  and  further  training 
practitioners.  The  country  still  needs  to  introduce  an  appropriate  compensation  scheme  for 
victims of crime, in particular victims of trafficking in human beings.  

The  witness  protection  programme 

improved  significantly,  notably  out-of-process 

41 

 
 
protection. Specialised and regular witness protection training is required for new staff. The 
authorities’  capacity  to  effectively  tackle  cybercrime,  including  online  child  sexual  abuse, 
and respond to cybersecurity threats remains inadequate.  

On arms control, a total  of 1 396 weapons,  14,009 pieces of  ammunition  and 1 mine were 
seized  in  2021  (against  1 316,  20 343  and  18  in  2020),  and  1,972  pieces  of  weapons  and 
weapons  parts  were  destroyed  (compared  to  1 864  in  2020,  3 479  in  2019).  In  2021,  there 
were  317  orders  to  investigate  firearms-related  criminal  offences  (illegal  production, 
possession,  and  trafficking)  with  340  suspects,  276  indictments  with  298  accused  and  223 
convictions (23 prison sentences, 32 fines and 168 suspended sentences) with 239 convicted. 
Bosnia and Herzegovina still needs to establish a focal point for firearms. The criminal codes 
are not  yet aligned with the UN Firearms Protocol. Bosnia and Herzegovina stands out with 
the  relatively  high  number  of  voluntarily  surrendered  firearms.  According  to  the  Armed 
Violence Reporting Platform of the South Eastern and Eastern Europe Clearinghouse for the 
Control  of  Small  Arms  and  Light  Weapons  (SEESAC),  in  2021  there  was  an  increase  of 
firearms-related  incidents  resulting  in  deaths  and  bodily  injury,  compared  with  the  previous 
year.  

Cooperation  between  Bosnia  and  Herzegovina  and  the  EU  Agency  for  Law  Enforcement 
Training  (CEPOL)  is  well  established  and  based  on  a  working  arrangement.  A  dedicated 
contact  point  is  in  place.  Bosnia  and  Herzegovina  has  full  access  to  the  CEPOL  exchange 
programme as well as to the free of charge electronic learning system of CEPOL. 

Cooperation in the field of drugs  

Institutional set-up and legal alignment 

The legal framework is only partly in line with the EU acquis, notably on minimum rules on 
drug-related criminal offences and sanctions. The legislation provides for the entire quantity 
of drugs seized to be preserved as material evidence for court proceedings, rather than just a 
sample,  which  creates  risks.  Bosnia  and  Herzegovina  cooperates  with  the  European 
Monitoring Centre for Drugs and Drug Addiction (EMCDDA) and should designate by law a 
correspondent  for  cooperation.  The  country  should  establish  a  national  drug  observatory  to 
provide factual, objective, reliable and comparable information on drugs, drug addiction and 
their consequences. It should improve coordination among the competent agencies and align 
data reporting on epidemiological trends with the EMCDDA treatment indicators.  Bosnia and 
Herzegovina should also adopt legislation on new psychoactive substances, establish a focal 
point for drug issues for the entire country and introduce an early warning system.   

Bosnia  and  Herzegovina  has  a  2018-2023  strategy  on  supervision  over  narcotic  drugs, 
prevention  and  suppression  of  the  abuse  of  narcotic  drugs,  but  there  is  no  action  plan  to 
implement it. A new action plan for 2023 and beyond, in line with EU standards, should be 
adopted. The Republika Srpska entity has its own strategy and action plan on drugs. Although 
the  Council  of  Ministers  re-activated  a  commission  for  the  suppression  of  the  abuse  of 
narcotic drugs in September 2020, composed of members of both entities at political level, not 
a single meeting has taken place since.   

Implementation and enforcement capacity 

In 2021, there were  a total of 2 451 reported  crimes related to  drug abuse and 2 171 orders 
issued to conduct an investigation. There were 1 409 indictments filed, 2 023 confirmed, 587 
indictments  with  a  criminal  warrant  and  6  indictments  with  plea  agreement.  There  were  33 
acquittals, 6 judgments rejecting charges and 1 967 convictions, of which 89 fines; 24 court 
reprimands; 1 304 suspended sentences; and 550 prison sentences. 

42 

 
 
Bosnia and Herzegovina is still a transit country and a final destination for drugs. The Council 
of Ministers  has not  updated the list  of  criminalised psychoactive substances since 2011, in 
line  with  the  recommendations  of  the  Commission  for  the  suppression  of  abuse  of  narcotic 
drugs.  As  a  result,  several  psychoactive  substances  circulate  freely.  A  more  flexible 
mechanism is needed to regularly update this list. Professional capacity and cooperation with 
civil  society  needs  to  be  improved.  More  funds  are  needed  for  harm  reduction  programmes 
and the social reintegration of addicted persons. In 2021, 1 700 kg of drugs were destroyed, 
mostly marijuana, amphetamines and heroin. The lack of secure storage before destruction is 
still a concern.  

Fight against terrorism  

Institutional set-up and legal alignment  

Anti-terrorism  legislation  is  mostly  aligned  with  the  EU  acquis  and  international  law. 
Criminal  legislation  needs  to  be  amended  to  ensure  stricter  sanctions  for  the  offence  of 
training  and  travelling  abroad  for  terrorist  purposes  as  well  as  for  publishing  and  sharing 
terrorist content online. A new law on anti-money laundering and terrorism financing in line 
with  the  EU  acquis  (fourth  and  fifth  AML/CTF  directives)  needs  to  be  urgently  adopted. 
Laws on the protection of critical infrastructure (only present so far in the Republika Srpska 
entity) should be developed and adopted at all levels of government.    

The  strategy  and  action  plan  against  terrorism  expired  in  2020.  A  new  strategy  should  be 
adopted  in  line  with  EU  policy,  including  on  preventing  and  countering  violent  extremism. 
The strategy should cover all forms of radicalisation and violent extremism (political, ethno-
nationalist  and  religious)  and  address  them  in  field  activities  on  preventing  /  countering 
violent  extremism  (P/CVE).  The  EU  is  supporting  Bosnia  and  Herzegovina  in  revising  its 
strategy through the Radicalisation Awareness Network (RAN) policy support. 

The capacity and  effectiveness  of the  counter terrorism task force and the counter-terrorism 
section of the state-level prosecutor’s office need to be significantly strengthened. The policy 
dialogue  on  counter-terrorism  between  the  EU  and  Bosnia  and  Herzegovina  takes  place 
regularly.   

Implementation and enforcement capacity  

Shortcomings  still  exist  in  implementing  counter-terrorism  laws,  and  cooperation  between 
security agencies at all levels of government needs to become more structured and efficient. 
The  high-security  state  prison  is  fully  functional.  Very  limited  assistance  is  available,  in 
prison or upon release, for disengaging from violent extremism. Much more work is needed to 
prepare inmates for release, including former foreign terrorist fighters. Around 140 citizens of 
Bosnia and Herzegovina, including women and children, are estimated to remain in Syria and 
Iraq.  In  the  reporting  period,  Bosnia  and  Herzegovina  did  not  repatriate  any  of  them.  In 
August  2022,  Bosnia  and  Herzegovina  adopted  a  plan  for  the  repatriation,  reintegration 
rehabilitation and resocialisation of its citizens in Syria and Iraq. This plan extends an existing 
reintegration programme for former foreign fighters and their family members that continues 
to be implemented.  

Three investigations have been initiated against citizens of Bosnia and Herzegovina suspected 
of  having  served  in  para-military  or  para-police  units  in  Ukraine.  One  case  resulted  in  an 
acquittal in first instance, and criminal charges against another individual were later dropped.  

Lenient  sentences  combined  with  no  probation  service  or  systematic  disengagement 
assistance  could  still  represent  a  security  risk.  Efforts  are  being  made  to  better  manage  the 
execution  of  criminal  sanctions  imposed  on  terrorist  offenders.  Authorities  should  improve 

43 

 
 
preparations  for  the  release  of  inmates,  in  coordination  with  local  authorities  and  law 
enforcement.  A  multi-disciplinary  mobile  team  of  experts  is  supporting  local  authorities  to 
handle  challenges  posed  by  citizens  who  have  returned  from  foreign  conflict  zones  and  by 
ongoing radicalisation tendencies.  

The country’s capacity to investigate and prosecute the financing of terrorism and to counter 
terrorist  content  online  needs  to  be  further  developed.  An  asset  recovery  office  and  a 
beneficial  ownership  register  of  legal  persons  have  yet  to  be  established.  Coordination, 
cooperation and intelligence sharing between security agencies need to be improved, e.g. on 
identifying a firearms focal point, or collaborating with the EU internet referral unit (IRU) at 
Europol  to  deal  with  terrorist  content  online.  To  facilitate  cooperation  and  exchange 
information  on  terrorism,  the  agreement  with  Europol  needs  to  be  put  into  practice.  This 
requires setting up an operational contact point, which is long-overdue. 

Civil society and the institutions responsible for labour, social welfare, education, youth and 
health  at  various  levels  of  government  need  to  be  more  effectively  included  in  preventive 
efforts. Bosnia and Herzegovina is participating in implementing the Western Balkan counter 
terrorism  initiative  (WBCTi),  as  part  of  the  umbrella  of  the  integrative  internal  security 
governance (IISG). 

Judicial cooperation in civil and criminal matters  

The legislative framework for mutual legal assistance in civil and criminal matters is in place 
but not always applied effectively. The number of requests for judicial cooperation increased 
substantially.  In 2021, the Ministry  of Justice recorded a total  of  3 203 requests for judicial 
cooperation in civil matters, 50% of them from EU Member States (mainly Croatia, Austria 
and Germany). In 2021, there were 3 546 requests for judicial cooperation in criminal matters, 
64% from EU Member States (mainly Croatia, Slovenia, Austria and Germany). The statistics 
on enforcement of foreign judgments in criminal matters (transferring convicted persons and 
taking over enforcement of criminal sentences) have remained stable. There were 72 requests 
in 2021, of which 5 were granted (61 in 2020). Of these, 35 came from EU Member States, 
and the average completion rate was between three months and one year.  

The  country  needs  to  accede  to  certain  instruments  developed  within  the  framework  of  the 
Hague conference on private international law. These include the Convention of 19 October 
1996 on jurisdiction, applicable law, recognition, enforcement and co-operation in respect of 
parental responsibility and measures for the protection of children, as well as the Protocol of 
23 November 2007 on the law applicable to maintenance obligations.  

Regarding judicial cooperation in criminal matters, Bosnia and Herzegovina does not have a 
cooperation agreement with Eurojust. It has four contact points for relations with Eurojust. In 
2021,  the  country  was  involved  in  22  cooperation  cases  with  Eurojust.  In  2021  the  EU 
Council adopted a mandate for the Commission to negotiate an international agreement with 
Bosnia  and  Herzegovina  on  judicial  cooperation  in  criminal  matters  with  Eurojust.  As  a 
prerequisite  for  the  future  agreement  to  enter  into  force,  Bosnia  and  Herzegovina  needs  to 
align  its  legislation  on  personal  data  protection  with  the  EU  acquis  and  strengthen  the 
operational  capacity  of  the  Personal  Data  Protection  Agency.  Moreover,  the  Prosecutor’s 
Office needs to adopt by-laws, notably to better set out how the parties to a case can access 
their personal data via the Prosecutor’s Office website.  

Bosnia  and  Herzegovina  still  needs  to  establish  cooperative  relations  with  the  European 
Public Prosecutor’s Office (EPPO). The country was involved in one EPPO case in the first 
seven months of operational activities of the office (June-December 2021). 

Legal and irregular migration  

44 

 
 
Institutional set-up and legal alignment 

The legal framework on migration, including the Law on Foreigners, is broadly aligned with 
the EU acquis. The principle of non-refoulement remains to be fully ensured, including in the 
new version of the law being drafted. The Council of Ministers urgently needs to adopt a new 
strategy and action plan on migration and asylum for 2021-2025.  

Bosnia  and  Herzegovina  has  concluded  readmission  agreements  with  the  EU  and  with 
Schengen  associated  countries,  as  well  as  implementation  protocols  to  the  EU  Readmission 
Agreement  with  16  EU  Member  States.  Their  implementation  is  satisfactory  overall. 
Accelerated  readmission  procedures  with  neighbouring  countries  are  still  to  be  fully  and 
effectively implemented. Bosnia and Herzegovina has also concluded readmission agreements 
with  all  the  Western  Balkan  countries,  Türkiye,  Russia,  Moldova  and  Pakistan,  as  well  as 
implementation  protocols  with  16  EU  Member  States.  The  readmission  agreement  with 
Pakistan  has  been  in  force  since  July  2021.  The  implementation  of  the  agreement  needs  to 
improve and Bosnia and Herzegovina has taken necessary steps in this regard.  

Implementation and enforcement capacity 

In 2021, the numbers of persons irregularly entering Bosnia and Herzegovina was comparable 
to  2020  and  much  lower  that  in  2018  and  2019.  In  2021,  the  authorities  detected  15 740 
arrivals (16 150 in 2020). 14 688 persons expressed their intention to seek asylum (15 170 in 
2020).  The top three declared countries of origin were Afghanistan, Pakistan and Bangladesh. 
In  August  2022,  some  2 000  migrants  were  registered  as  staying  in  four  EU-funded 
temporary  reception  centres  in  the  Una-Sana  and  Sarajevo  cantons,  with  743  more 
estimated as staying outside the centres as of July.  Less  than half of the places in  reception 
capacity are occupied.  

The Ministry of Security has continued to step up efforts to improve migration management. 
Relations  with  local  authorities  have  generally  improved.  However,  its  competent  agencies, 
including  the  Sector  for  Immigration  and  the  Service  for  Foreigners’  Affairs  remain 
significantly understaffed and partly underequipped, which hampers their efficiency.  Bosnia 
and  Herzegovina  has  still  not  taken  over  full  ownership  and  responsibility  for  migration 
management and of all reception centres. Only limited public funding is available to manage 
migration; this also impacts the state’s effectiveness in developing a policy. Authorities failed 
to  ensure  that  the  Service  for  Foreigners’  Affairs  and  the  Border  Police  have  sufficient  and 
competent  personnel.  Improved  information  exchange  is  needed,  including  biometric  data 
exchange between those in migration management policy. Bosnia and Herzegovina failed to 
adopt or assign a budget for migration management. 

Despite  constant  EU  advocacy  and  support,  the  authorities  at  all  levels  of  government  have 
failed  to  improve  coordination  and  share  the  responsibility  in  hosting  asylum  seekers  and 
migrants  across  the  entire  country.  Significant  institutional  and  coordination  weaknesses  in 
migration  management  remain.  The  lack  of  political  responsibility  make  it  difficult  for  the 
authorities to provide the necessary assistance. Bosnia and Herzegovina should become fully 
responsible for managing reception centres. Most of the responsibilities continue to fall upon 
the  Una-Sana  and  Sarajevo  cantons.  The  task  of  managing  migration  should  be  more  fairly 
shared  among  all  entities  and  cantons,  under  the  full  responsibility  of  state  authorities.  The 
Ministry of Security has continued efforts to improve coordination among the state and local 
levela and take over responsibility for managing migration, which should be supported by all 
levels of government. The Ministry of Security has also taken the lead to boost regional and 
international cooperation on migration, hosting conferences to this aim in November 2021 and 
September 2022.  

45 

 
 
Bosnia  and  Herzegovina  demonstrated  a  limited  level  of  organisation  and  coordination  in 
managing the influx of Ukrainian refugees, present in low fluctuating numbers. The country 
set out their legal status and the rights they would enjoy when entering the country. In April 
2022, the Council of Ministers simplified their entry and stay, granting temporary residence 
on humanitarian grounds for 6 months with a further extension possible. 

In November 2021, the authorities of Bosnia and Herzegovina, with extensive support of the 
EU  and  implementing  partners,  established  the  multi-purpose  reception  and  identification 
centre  in  Lipa,  near  Bihać.  The  reception  centre,  managed  by  the  Service  for  Foreigners’ 
Affairs, has a capacity of 1 500 places. Bosnia and Herzegovina must strengthen capacity and 
take  all  necessary  measures  to  effectively  manage  the  centre,  fully  respecting  fundamental 
rights,  domestic  legislation  and  international  standards,  including  for  screening  and 
registration, the protection of vulnerable persons and detention.  

Despite  shortage  of  staff,  the  Service  for  Foreigners’  Affairs  has  shown  overall  satisfactory 
management  and  coordination  capacities,  further  improving  access  to  rights  and  protection. 
As additional reception places became available, the authorities intensified efforts to relocate 
migrants  from  informal  settlements  to  these reception centres. There was good coordination 
between the Service for Foreigners’ Affairs, local police and other partners. In May 2022, the 
Una  Sana  cantonal  authorities  closed  the  reception  centre  in  Miral.  Cantonal  authorities  are 
encouraged  to  identify  suitable  alternative  locations  to  accommodate  migrants,  including 
those in informal settlements outside urban areas.  

The Una-Sana Canton continues to prohibit migrants from using public transport and restrict 
the  maximum  number  of  migrants  in  the  canton.  Humanitarian  partners  should  be 
unconditionally provided crucial  access to  vulnerable persons. The Ministry  of Security has 
taken steps to coordinate access and facilitate the provision of assistance. 

The crisis response during the COVID-19 outbreak was satisfactory overall, and it prevented 
a  wider  spread  of  the  virus  and  more  severe  consequences  for  migrants.  Humanitarian 
partners continued to provide key assistance and to ensure respect for international standards.  

There  has  been  some  progress  in  providing  essential  services  to  refugees  and  migrants,  in 
cooperation  with  humanitarian  partners.  In  2021,  the  authorities  showed  limited  progress  in 
providing protection and access to rights to vulnerable persons, especially minors. Bosnia and 
Herzegovina must step up efforts to better protect their human rights. A long-term response in 
the  provision  of  protection  and  humanitarian  assistance  to  refugees  and  migrants  remains 
essential.  The  most  vulnerable  persons,  such  as  unaccompanied  and  separated  children, 
pregnant  women,  single  parents,  persons  with  disabilities,  sick  persons  and  victims  of 
violence,  need  to  be  identified  and  referred  to  adequate  assistance  in  line  with  international 
standards.  Only  the  Una-Sana  and  Sarajevo  cantonal  authorities  provide  access  to  legal 
guardianship  and  facilitate  access  to  education  for  unaccompanied  children.  An  additional 
shelter  for  unaccompanied  minors  was  opened  in  Duje  with  adequate  accommodation, 
protection and living conditions. Providing legal guardianship and access to education for all 
unaccompanied minors in the country remains a challenge. In 2021, the authorities registered 
109 unaccompanied minors in the country (351 in 2020). 

On voluntary and forced return, the return of persons not in need of international protection 
needs to be improved in both legal framework and implementation procedures. There was an 
improvement in the mechanisms for collecting, sharing and analysing statistics on migration 
in the information system for migration. However, collecting biometric data requires further 
improvements.  Cooperation  with  neighbouring  countries  is  necessary  to  ensure  the  efficient 
management  of  the  external  borders,  in  line  with  the  respect  for  fundamental  rights  and 
international obligations. 

46 

 
 
Bosnia  and  Herzegovina  should  increase  efforts  to  establish  readmission  agreements  with 
countries  of  origin  and  further  improve  the  mechanisms  for  assisted  voluntary  return  and 
reintegration.  Ensuring  return  and  readmission  remains  challenging,  since  neighbouring 
countries have limited accelerated readmission procedures due to the pandemic. In 2021, 89 
foreigners were returned to neighbouring countries following readmission agreements (66 to 
Serbia, 21 to Montenegro and 2 to Croatia), compared with 195 in 2020. The number of third-
country  nationals  returned  to  Bosnia  and  Herzegovina  in  2021  under  various  readmission 
agreements  amounted  to  570,  compared  with  686  in  2020  and  783  in  2019.  In  2021,  206 
foreigners returned to their countries of origin via assisted voluntary return with support from 
the EU and the International Organisation for Migration (IOM), compared with 232 in 2020 
and  837  in  2019.  In  2021,  four  minors,  who  were  potential  victims  of  trafficking  of  human 
beings,  were  repatriated  from  Bosnia  and  Herzegovina,  in  line  with  their  wishes,  and 
following  the  required  security  and  humanitarian  risk  assessment.  Bosnia  and  Herzegovina 
did not carry out any forced returns in 2021, whilst in 2022 the Service for Foreigners’ Affairs 
returned  two  persons  to  Pakistan  based  on  the  readmission  agreement  and  implementation 
protocol. 

Bosnia and Herzegovina has one immigration detention centre in East Sarajevo (Lukavica) 
for  those  awaiting  expulsion  from  the  country,  with  a  maximum  capacity  for  120  persons. 
Representatives of the UNHCR and non-governmental organisations are granted access to the 
detainees on a regular basis to ensure that their rights are respected.  

Asylum  

Institutional set-up and legal alignment 

The institutional framework and legislation on asylum are broadly in line with the EU acquis 
and  international  standards.  Further  alignment  is  needed  in  particular  on  procedural 
safeguards  to  ensure  standardised  procedures  for  examining  applications  for  international 
protection and systematic access to procedural guarantees. This refers to interview techniques, 
evidence assessment, guarantees for vulnerable groups and unaccompanied minors, access to 
rights  and  legal  aid,  and  the  definition  of  asylum-seekers  and  refugees.  Authorities  are 
encouraged  to  follow  up  and  take  into  account  the  requested  advice  provided  by  the  EU 
Agency for Asylum (EUAA) as part  of the 2020-2021 roadmap for cooperation with EASO 
on strengthening the asylum and reception systems in line with the common European asylum 
system  (CEAS)  and  EU  standards.  Inter-agency  cooperation  and  coordination  needs  to  be 
further improved, particularly in the exchange of biometric data.  

Implementation and enforcement capacity 

Obstacles remain to ensure an effective access to asylum procedures. More efficient access to 
asylum and inter-agency cooperation and coordination remains to be ensured. The processing 
of  asylum  cases  continues  to  be  too  lengthy,  with  an  average  of  over  450  days  to  reach  a 
decision, reduced to 350 days in the first half of 2022. The Service for Foreigners’ Affairs and 
the Border Police do not have enough staff and facilities to register asylum intents made upon 
entry in the country. This has been an issue since 2018.  

The  Sector  for  Asylum  of  the  Ministry  of  Security  has  very  limited  human  resources  and 
operational  capacity,  with  only  five  staff  registering  and  assessing  asylum  claims  for  the 
entire country, which is clearly insufficient to ensure access to asylum. There are not enough 
interviewers  or  registration  sites.  Providing  more  staff,  including  interpreters  and  cultural 
mediators, is  needed so  as not  to  only rely on international  support. The overall capacity of 
the Sector for Asylum should be further strengthened.  

Asylum legislation needs to be better implemented, in particular to improve efficiency and the 

47 

 
 
systematic compliance with procedural guarantees for asylum seekers. Asylum seekers are not 
guaranteed  the  same  rights  evenly  across  the  country,  as  their  access  to  services  varies 
depending  on  where  the  reception  centres  are  located.  Access  to  asylum  procedures  and 
mechanisms should be strengthened to ensure faster processing of their claims and ensure that 
people in need of international protection may receive it. As the authorities have not yet fully 
taken  over  the  legal  responsibility  for  all  reception  centres  in  the  Una-Sana  Canton,  these 
centres  are  not  recognised  as  valid  residential  addresses  for  asylum  applications;  applicants 
thus  fall  in  a  legal  limbo,  which  increases  their  vulnerability.  The  authorities  should  ensure 
access  to  information,  which  is  so  far  largely  provided  by  international  organisations  and 
NGOs.  The  system  for  collecting  and  storing  biometric  identifiers  requires  additional 
improvements,  especially  for  inter-agency  information  exchange.  In  2021,  out  of  14 688 
persons  who  expressed  their  intention  to  claim  asylum  in  Bosnia  and  Herzegovina,  167 
applied for international protection, while 154 asylum requests were pending from 2021. Of 
them, 5 persons were granted refugee status, 28 persons were granted subsidiary protection, 
41 individual applications were rejected on merit and 109 asylum applications of 179 persons 
were closed as the applicants left or attempted to leave the country or failed to show up for an 
interview. From January to March 2022, 39 persons filed an asylum application in Bosnia and 
Herzegovina, with 32 requests completed, compared with 91 in the same period in 2021. 

The asylum centre in Delijaš near Sarajevo, which provides decent reception conditions and 
adequate  access  to  rights,  has  154  beds  (which  can  be  expanded  to  300)  but  its  use  is  very 
limited, mainly due to its remote location. In July 2022, it hosted around 8 asylum seekers. 

Bosnia  and  Herzegovina  needs  to  extend  the  validity  of  its  2020-2021  roadmap  for 
cooperation with EUAA on strengthening the asylum and reception systems in line with the 
common  European  asylum  system  (CEAS)  and  EU  standards.  Cooperation  with  EUAA 
should continue and intensify.  

Visa policy  

Legislation on visas is  broadly  aligned with  the EU  acquis  and needs  to  be fully aligned  as 
regards  the  list  of  countries  whose  nationals  require  an  entry  visa.  Bosnia  and  Herzegovina 
continues  to  meet the visa liberalisation  criteria  and retains  a visa-free regime with  the  EU. 
Bosnia  and  Herzegovina  maintains  visa-free  regimes  with  Azerbaijan, Bahrain,  Kuwait, 
Oman, Qatar, Türkiye, Russia and China. Bosnia and Herzegovina maintains a policy not to 
issue  visas  on  the  state  border.  In  2021,  a  total  of  seven  visas  were  issued  at  international 
border crossings. To ensure a well-managed migration and security environment, the country 
needs to be fully aligned with the EU’s visa policy.  

The security features of visas and travel documents are aligned with EU standards. Bosnia and 
Herzegovina  must  adopt  legislative  amendments  to  resolve  issues  on  the  procurement  and 
manufacturing of biometric travel documents, notably biometric passports. 

The  IT  infrastructure  of  the  consular  network  abroad  needs  to  be  improved,  as  Bosnia  and 
Herzegovina has no technical capacity for collecting biometric data from visa applicants.  

The  visa-free  regime  with  the  EU  continued  to  be  smoothly  implemented.  In  2021,  4 995 
citizens of Bosnia and Herzegovina were refused entry in the Schengen area (8 145 in 2020, 
4 270 in 2019), while 4 200 were found irregularly staying in the EU (3 595 in 2020, 4 290 in 
2019). First-time asylum applications increased to 1 565 (1 030 in 2020, 1 570 in 2019); 605 
applications were lodged in the first five months of 2022 (1 070 in the same period in 2021). 
The asylum recognition rate in the EU further halved to 1.1% (2.2% in 2020, 5.1% in 2019), 
excluding humanitarian protection (5.5% in 2021, compared with 4.1% in 2020). 

Bosnia  and  Herzegovina  continued  good  cooperation  on  readmission  of  its  own  and  third-

48 

 
 
country nationals  on the basis of the readmission agreement  with  the EU and implementing 
protocols. There were 825 citizens of the country who returned from Member States in 2020, 
out of 2 740 ordered to leave (a return rate of 30%, compared with 34% in 2020). 410 were 
effectively  returned  in  the  first  half  of  2022,  out  of  1 105  ordered  to  leave  (return  rate  of 
37%). Attention  should  continue to  be paid  to  the successful  reintegration of returnees.  The 
Commission’s fourth report under the visa suspension mechanism of August 2021 concluded 
that Bosnia and Herzegovina continues to meet the visa liberalisation benchmarks10.  

Schengen and external borders  

Institutional set-up and legal alignment 

The  state-level  Border  Police  is  responsible  for  managing  the  state  border.  The  legal 
framework  for  border  control  is  partly  aligned  with  the  EU/Schengen  acquis  and  is 
implemented  smoothly.  A  new  law  on  border  control,  aiming  to  make  integrated  border 
management more efficient, has not been adopted yet. 

The integrated border  management (IBM) strategy and its action plan for 2019-2023, are 
broadly aligned with the EU acquis. Bosnia and Herzegovina has  yet to  establish a national 
coordination  centre  in  line  with  the  EU/Schengen  acquis  and  implement  best  practices  for 
information  sharing  and  coordination  among  all  relevant  law  enforcement  agencies.  Risk 
analysis for data exchange was improved.  

Training  was  improved  to  align  it  more  with  the  common  core  curriculum  of  the  European 
Border and Coast Guard Agency (Frontex). The Border Police, despite its limited resources, 
showed adequate operational flexibility in border management operations with the support of 
other law enforcement agencies. 

Implementation and enforcement capacity 

Following  the  increased  influx  of  refugees  and  migrants  since  2018,  the  authorities  have 
redeployed available border guards. However, the response remains inadequate despite inter-
agency  redeployments  of  staff  and  support.  The  Border  Police  remains  understaffed  and 
operated with almost 15% less personnel than two years ago. Specialised training is regularly 
provided to improve the quality of border checks and other operations in the field but further 
improvements are needed.   

The  new  integrated  border  management  strategy  for  2019-2023  is  in  place.  Its 
implementation  should  be  further  improved,  in  particular  in  the  area  of  border  surveillance, 
inter-agency  cooperation  and  capacity  management.  Setting  up  the  advanced  passenger 
information / passenger name record (API/PNR) systems is at an early stage.   

The Border Police and the Service for Foreigners’ Affairs further improved their risk analysis 
capacity  by  certifying  trainers  using  Frontex  risk  analysis  methodologies.  The  Joint  Risk 
Analysis Centre based their analytical documents on the most recent common integrated risk 
analysis  model  (CIRAM).  It  demonstrated  satisfactory  risk  analysis  capabilities.  Data 
exchange with neighbouring countries and between border guard agencies improved. Suitable 
risk analysis training is required. Further improvements of infrastructure and equipment are 
needed  at  border  crossing  points.  More  resources  are  needed  for  border  surveillance,  as 
current ones are limited. Supervision of green borders (outside the border crossing points) is 
not effective. Despite the falling number of migrants entering Bosnia and Herzegovina, there 

10 COM(2021) 602 final and SWD(2021)206 final. 

49 

 
 
                                                           
are  not  enough  border  patrols,  given  the  length  of  the  border.  Risk  analysis-led  border 
surveillance must be further improved.  

Inter-agency law enforcement cooperation was satisfactory overall. Cooperation at border 
crossing  points  requires  further  improvement,  especially  in  the  fight  against  smuggling  of 
migrants  and  trafficking  of  human  beings,  migration  response,  and  migration  contingency 
planning. The central investigation office of the Border Police has executive powers across 
the  country.  Investigation  improved  in  fighting  cross-border  organised  crime,  in  particular 
human smuggling. The combined efforts of the Border Police and other agencies in fighting 
smuggling of migrants resulted in higher detection rates. In 2020, the Border Police detected 7 
cases  of  smuggling  of  migrants  and  raised  6  charges  against  12  suspected  perpetrators.  In 
2021, the Border Police detected 26 cases of smuggling of migrants, compared to 40 cases in 
2020.  In  the  first  semester  of  2022,  it  detected  24  cases,  demonstrating  improvement  in 
operational  capacities.  There  is  limited  cooperation  with  Europol’s  European  Migrant 
Smuggling Centre, notably on data exchange and involvement of law enforcement agencies. 

On  international  cooperation,  the  country  is  a  signatory  to  a  number  of  agreements  with 
neighbouring countries. The Border Police cooperates satisfactorily with Frontex and Interpol. 
Bosnia  and  Herzegovina  initialled  a  status  agreement  with  the  EU  in  January  2019.  This 
would  enable  Frontex  to  deploy its  standing  corps  at  the  country’s  border  with  the  EU,  and 
carry out operational activities with the Border Police. This text was never signed nor ratified. 
With the adoption of the new EBCG Regulation and model status agreement,11 a new status 
agreement  will  need  to  be  negotiated;  this  would  notably  allow  Frontex  to  deploy  to  both 
Bosnia and Herzegovina’s EU and non-EU borders. Bosnia  and Herzegovina participates in 
the Western Balkan Risk Analysis Network led by Frontex.  

Bosnia  and  Herzegovina  should  sign  border  agreements  with  Croatia  and  Serbia  and 
demarcate  the  border  with  Montenegro.  The  joint  police  cooperation  centre  in  Trebinje 
improved  information  exchange,  despite  limited  capacity.  Local  border  traffic  agreements 
with  neighbouring  countries  are  satisfactorily  implemented.  Joint  patrols  with  neighbouring 
countries have been restored to a limited extent, after being suspended due to the pandemic.  

All aspects of customs cooperation are covered under Chapter 29 – Customs union. 

11 Regulation (EU) 1896/2019; COM(2021) 829 final 

50 

 
 
 
 
                                                           
2.3. ECONOMIC CRITERIA 

Table 6.1: 

2013-18  
average 

Bosnia and Herzegovina - Key economic figures 
GDP per capita  (% of EU-27 in PPS) 1) 
31 
2.8 
Real GDP growth  
Economic activity rate of the population aged 15-64  (%), total  54.2 
42.1 
      female 
66.1 
      male 
25.0 
Unemployment rate of the population aged 15-64  (%), total 
28.0 
      female 
      male 
23.1 
Employment of total population  (annual growth %) * 
Nominal wages  (annual growth %) 
Consumer price index  (annual growth %) 
Exchange rate against EUR 
Current account balance  (% of GDP) 
Net foreign direct investment, FDI  (% of GDP) 
General government balance  (% of GDP) 
General government debt  (% of GDP) 

2.8 
0.9 
-0.1 
1.96 
-5.1 
2.2 
0.5 
37.8 

2019 

2020 

2021 

32 
2.8 
55.5 
44.4 
66.4 
16.4 
19.7 
14.2 

2.5 
4.3 
0.6 
1.96 
-2.8 
1.5 
1.9 
32.8 

33 
-3.2 
58.2 
46.1 
70.4 
16.2 
19.0 
14.4 

-1.2 
4.0 
-1.1 
1.96 
-3.8 
1.7 
-5.3 
36.6 

33 
7.5 
59.1 
46.7 
71.4 
17.5 
22.2 
14.5 

0.9 
4.4 
2.0 
1.96 
-2.1 
2.1 
-0.3 
35.5 

Notes :  
1) Eurostat 

* There is no comparable time series for the age group 15-64 
Source: Eurostat, national sources 

In  line  with  the  conclusions  of  the  European  Council  in  Copenhagen  in  June  1993,  EU 
accession  requires  the  existence  of  a  functioning  market  economy  and  the  capacity  to  cope 
with competitive pressure and market forces within the Union. 

Economic  governance  has  become  even  more  central  in  the  enlargement  process  in  recent 
years.  The  Commission's  monitoring  takes  place  in  two  processes:  the  Economic  Reform 
Programme exercise and the below assessment of compliance with the economic criteria for 
accession.  Each  enlargement  country  prepares  an  Economic  Reform  Programme  (ERP) 
annually,  which  sets  out  a  medium-term  macro-fiscal  policy  framework  and  a  structural 
reform  agenda  aimed  at  ensuring  competitiveness  and  inclusive  growth.  The  ERPs  are  the 
basis for country-specific policy guidance jointly adopted by the EU and the Western Balkans 
and Türkiye at ministerial level in May each year. 

2.3.1. The existence of a functioning market economy 

Bosnia  and  Herzegovina  is  at  an  early  stage  of  establishing  a  functioning  market  economy 
and  there  was  backsliding  in  some  areas.  Higher  foreign  demand  and  government  support 
measures  helped  the  economy  to  rebound  in  2021.  This  also  benefitted  the  labour  market, 
though  unemployment  remains  high  and  structural  problems  persist.  The  financial  sector 
remained stable and credit growth picked up. The fallout from Russia’s war against Ukraine 
has  been  limited  so  far.  In  line  with  global  trends,  inflation  accelerated  significantly.  The 
business environment is negatively affected by the country’s fragmented internal market and a 
large informal economy. The rule of law and the functioning of the internal market has been 
further  weakened  by  the  long-standing  political  crisis  and  the  blockage  of  state-level 
institutions which has also harmed the quality of economic governance. The quality of public 

51 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
spending has not improved, while the public sector has remained inefficient and oversized.  

The implementation of last year’s country report recommendations for improving compliance 
with the functioning market criteria has been very limited. In order to improve the functioning 
of the market economy, Bosnia and Herzegovina should in particular:  

  Improve  the  business  environment  by  streamlining,  simplifying  business  registration  and 
licencing procedures and strengthen the country’s internal market by harmonising and mutually 
recognising licences and certificates between entities; 

  Increase  the  transparency  and  efficiency  of  the  public  sector,  in  particular  by  establishing  an 
adequate  institutional  and  regulatory  framework  for  a  better,  de-politicised  governance,  and  by 
improving the efficiency and governance of publicly owned enterprises to reduce their burden on 
government  spending;  furthermore,  improve  the  efficiency  of  tax  collection  by  ensuring  an 
effective exchange of taxpayer information between the country’s tax authorities, and in particular 
clarify the constitutional competence for establishing a central (i.e. country-wide) registry of bank 
accounts of private individuals, in line with the EU acquis; 

  Strengthen country-wide regulatory and supervisory institutions, reinforce country-wide analytical 
and  policy-formulation  capacities  and  publish  complete  and  consistent  country-wide  data  in  a 
timely manner, in particular in the area of public finances. 

Economic governance  

Economic  governance  continued  to  suffer  from  poor  cooperation  between  the  entities 
and at the state level.  Country-wide economic governance stalled in part due to the refusal 
of political  parties based in  the  Republika Srpska  entity to  participate in  decision-making at 
the  state  level.  This  also  affected  the  preparation  of  the  2022-2024  Economic  Reform 
Programme,  an  important  element  for  the  country’s  participation  in  the  Economic  and 
Financial  Dialogue  with  the  EU  which  supports  the  alignment  of  the  country’s  economic 
governance  with  EU  procedures.  The  failure  to  adopt  a  state-level  budget  in  2021  and  the 
severe  delay  in  the  adoption  of  the  2022  budget  disrupted  the  functioning  of  state-level 
institutions and economic policymaking.  

The country’s response to the COVID-19 pandemic suffered from a lack of transparency and 
coordination  among  key  stakeholders.  Measures  were  primarily  focused  on  the  regional  or 
local level and were not well-targeted to protect the most vulnerable parts of the population.  

The  implementation  of  the  policy  guidance  jointly  adopted  at  the  Economic  and  Financial 
Dialogue  with  the  EU  in  July  2021  has  been  limited.  Due  to  the  blockage  of  state  level 
decision-making, the Economic Reform Programme (ERP) was submitted with a substantial 
delay and suffered from a lack of internal consistency and a fragmented policy approach. The 
country  failed  to  implement  agreed  policy 
conditions which would have allowed the EU 
to disburse the second and final tranche of its 
COVID-19  related  macro-financial  assistance 
(MFA) package. As a result, the disbursement 
of EUR 125 million had to be cancelled.  

Macroeconomic stability  

Economic  growth  appears  to  have  slowed 
after a strong post-pandemic recovery, with 
year-on-year output growth of 5.5% in the 
first  quarter  of  2022,  after  7.5%  growth  in  2021  and  a  contraction  of  3.2%  in  2020. 
Exports  and  private  consumption  were  the  main  growth  drivers,  benefitting  from  strong 

52 

-6-4-20246810201620172018201920202021Graph 6.1: Bosnia and Herzegovina -Real GDP growth and contributionsPriv. cons.Gov. cons.GFCFStocksNet exportsreal GDP growthSource: WiiW% y-o-y 
 
external demand but also solid growth of disposable income, as a result of increased COVID-
19-related transfers. Substantial assistance from international institutions such as the IMF, the 
World  Bank  and  the  EU,  amounting  to  more  than  3%  of  GDP,  helped  to  finance  those 
additional transfers. Strong private consumption also translated into relatively strong growth 
in  imports.  Due  to  the  low  volume  of  trade  with  Ukraine  and  Russia,  the  direct  economic 
impact of the Russia’s invasion of Ukraine has remained limited so far. However, there is a 
risk of negative second round effects through indirect trade links and prices. The recovery of 
investment  remained  muted,  reflecting  lingering  uncertainty  related  to  COVID-19,  but  also 
continued  political  disputes  and  the  resulting  stalemate  in  the  political  decision-making 
process.  Import  growth  remained  rather  high,  reflecting  strong  private  consumption  and 
export-related  imports.  Per-capita  income  (in  purchasing  power  parities)  has  remained  at 
around one third of the EU-27 average.  

The current account deficit deteriorated slightly in the first quarter, reaching 4.4% of 
the  quarter’s  GDP,  after  2.1%  in  2021,  mainly  due  to  higher  spending  on  imports. 
Workers’  remittances,  which  constitute  an 
important  source  of  disposable 
income, 
recovered  in  2021  and  the  first  quarter  of 
2022  to  pre-pandemic  levels.  Net  foreign 
direct  investment  recovered  too,  increasing 
from  1.7%  of  GDP  in  2020  to  around  2%  in 
2021  and  the  first  quarter  of  2022,  mainly 
consisting  of  reinvested  earnings.  Official 
foreign  exchange  reserves  dropped  to  about 
8.4 months of imports, largely reflecting high 
import growth. However, thanks to the strong 
inflow  of  foreign  currency  in  2021  in  the 
form  of  emergency  assistance,  the  foreign 
exchange import coverage is  still rather high.  At the same time import-intensive investment 
remained  weak.  Short-term  debt  accounts  for  only  0.1%  of  foreign  exchange  reserves, 
reflecting  the  country’s  strong  reliance  on  longer-term  financing  through  international 
financial  institutions,  such  as  the  IMF,  the  World  Bank,  the  EU  (MFA)  and  the  EIB.  The 
coverage  of  imports  of  goods  and  services  through  exports  improved  during  2015-2019, 
reaching  73%  in  2019,  largely  thanks  to  a  favourable  export  performance  in  this  period.  In 
2021, the coverage stood at 71%, similar to 2020.  

Monetary policy has continued to be anchored by the currency board arrangement. This 
monetary  regime  has  served  the  economy  well  so  far.  The  resilience  of  the  currency  board 
during the pandemic demonstrates the public confidence and trust it enjoys, which makes it an 
important  pillar  of  macroeconomic  stability.  However,  it  also  implies  that  the  burden  of 
adjustment  to  external  shocks  must  be  accommodated  by  other  policy  areas,  in  particular 
fiscal policy to manage demand, and structural reforms to improve the functioning of markets. 
Headline inflation has been accelerating since autumn 2021, reaching 15.8% year-on-year in 
June 2022. This brought the average inflation rate to 11.4% in the first half of 2022, compared 
to 0.1% the year before. About half of this increase in headline inflation is due to increases in 
food prices, which  account  for about  one third  of the basket  used to  compute the consumer 
price index. No data on core inflation has been published so far. Domestic political tensions 
have continued to prevent the appointment of a new board of the central bank, including the 
governor, whose mandate expired in August 2021.  

53 

-6-303-20-1001020172018201920202021Graph 6.2: Bosnia and Herzegovina -Current account selected components and FDIPersonal Transfers (= Workers' Remittances)Goods and services trade balanceCurrent account balance (rhs)Net FDI (rhs)% of GDPSource:Central Bank of Bosnia and Herzegovina and Agency for statistics 
 
by 

limited 

characterised  by 

During the second half of 2021 and the first half of 2022, public finances benefitted from 
strong  revenue  growth,  increasingly  driven  by  accelerating  inflation.  This  additional 
revenue was  used for increasing COVID-19-related spending  as well as  higher spending on 
social  benefits,  such  as  pensions,  and  on  public  wages,  while  reported  public  investment 
spending declined slightly. Once the inflation-related increase in revenues subsides, financing 
the  additional  permanent  spending  could  pose  a  challenge.  Overall,  the  general  government 
registered a deficit of 0.3% of GDP in 2021, compared to 5.3% of GDP in 2020. During 2020 
and  2021,  COVID-19-related  public  spending  is  estimated  to  have  amounted  to  some  2½-
3½% of GDP, facilitated by the emergency assistance received from international institutions 
and  the  EU.  However,  the  size  of  the  policy 
response  was 
administrative 
bottlenecks and political stalemates, delaying the 
decision  process  and  the  implementation  of 
spending  decisions.  Budget  proposals  for  2022 
are 
significantly  higher 
spending,  likely  related  to  the  general  elections 
on  2  October  2022,  as  well  as  measures  to 
compensate public employees and pensioners for 
the  rapid  increase  in  inflation.  The  public  debt 
ratio rose only moderately, from 33% of GDP in 2019 to some 37% in 2020 and it declined to 
35.5% in the first quarter of 2022. Despite strong growth in revenue from indirect taxes, the 
overall  cooperation  and  information  exchange  among  the  various  fiscal  authorities  has 
remained  limited,  which  facilitates  tax  avoidance.  Calls  by  the  Republika  Srpska  entity  to 
dismantle  the  state-level  Indirect  Taxation  Authority  pose  a  threat  to  the  revenue  collection 
system.  Furthermore,  public  finances  are  burdened  by  contingent  liabilities,  in  particular  in 
the area of public enterprises. There is a significant degree of non-alignment with EU public 
sector  accounting  standards,  which  strongly  impedes  the  assessment  of  the  country’s  actual 
fiscal position. As a result, both the deficit and debt ratio could be significantly higher than 
reported.  Fiscal  rules  are  established  only  at  entity  level  and  there  is  no  independent  fiscal 
institution to monitor and enforce compliance with countrywide fiscal rules.  

Overall,  the  country’s  economic  performance  remains  below 
its  potential,  as 
macroeconomic policymaking was hindered by political stalemates, a strong short-term 
orientation  and  a  missing  focus  on  growth-enhancing  policy  measures.  While 
macroeconomic stability has been preserved during the pandemic, fiscal planning for the post-
pandemic years continues to be insufficiently geared towards growth-enhancing measures. As 
the country’s currency board regime limits the room for monetary policy, fiscal policy is one 
of the country’s key macroeconomic policy tools. However, this policy tool is not adequately 
used  to  steer  the  country  towards  stronger  growth  and  faster  convergence  with  EU  income 
levels.  The  effectiveness  of  fiscal  policy  with  respect  to  enhancing  the  country’s  growth 
potential is severely limited by the insufficient degree of cooperation among the various fiscal 
policy  stakeholders,  the  limited  role  of  the  country’s  fiscal  council  and  the  lack  of  conflict 
resolution mechanism. With respect to the COVID-19 crisis, the measures taken by the fiscal 
authorities  and  the  central  bank  helped  to  stabilise  the  economy  but  failed  to  pay  particular 
attention to lower income groups. 

Functioning of product markets  

Business environment  

There  was  no  significant  progress  in  reducing  barriers  to  market  entry  and  exit  while 
the  institutional  and  regulatory  environment  for  the  functioning  of  the  country’s 
internal  market  has  further  deteriorated.  In  order  to  be  able  to  operate  in  the  whole 

54 

01020304050-6-4-20246201620172018201920202021*Graph 6.3: Bosnia and Herzegovina -Fiscal developmentsPrimary balance (lhs)Interest (lhs)GG balance (lhs)Public Debt (rhs)Source: National sources% ofGDP 
 
country,  multiple  registrations  are  still  required,  increasing  costs  of  establishing  a  company 
and protecting incumbent companies from competition. So far, no data for 2021 is available 
concerning the number  of registered  companies. Contract  enforcement, in  particular settling 
commercial disputes, remains difficult; there is a substantial backlog in court cases. It remains 
difficult to establish property rights in some areas, such as real estate registration. Cooperation 
and  coordination  among  the  various  stakeholders  has  further  deteriorated  and  is  a  major 
impediment  to  the  rule  of  law  and  a  proper  functioning  of  the  judiciary,  impeding  the 
establishment  of  a  level  playing  field  on  a  country-wide  level,  with  wide-ranging  negative 
effects on the country’s business environment. Furthermore, during last year, key institutions, 
such  as  the  central  bank  and  the  Constitutional  Court,  were  affected  by  delays  in  key 
appointments and in adopting the state budgets for 2021 and 2022. Plans to set up a separate 
High  Judicial  and  Prosecutorial  Council  in  the  Republika  Srpska  entity  risk  further 
fragmentation  of  the  country’s  legal  institutions  and  their  independence  as  well  as  the 
integrity of the country’s single economic space. Overall, the country's business environment 
is  still  hampered  by  numerous  and  lengthy  administrative  procedures,  political  interference, 
corruption and diverging rules in different parts of the country, complicating the operation of 
companies and creating additional costs. Furthermore, risks for a further fragmentation of the 
country’s judiciary have increased while the functioning of the country’s constitutional court 
has been impeded by delays in appointing open positions. 

The  informal  economy  has  remained  significant  during  the  pandemic  while  perceived 
corruption has stayed elevated. Despite some  progress  in  boosting formal employment by 
increasing  labour  market  controls,  the  informal  sector  is  estimated  to  still  account  for  up  to 
one  third  of  GDP.  The  pandemic  might  have  increased  the  importance  of  the  informal 
economy  for  livelihoods,  compensating  for  job  losses  in  the  formal  economy.  Thus, 
informality still provides substantial (unregistered) employment and income but also distorts 
competition  and  erodes  the  tax  base.  This  requires  rates  for  taxes  and  social  security 
contributions to be higher than would otherwise be necessary. This also adds to a significant 
fiscal  burden  on  labour,  which  in  turn  impedes  formal  employment  and  negatively  affects 
Bosnia  and  Herzegovina’s  international  competitiveness.  According  to  Transparency 
International, the level of perceived corruption has remained one of the highest in the region. 

State influence on product markets  

State  influence  on  the  economy  has  further  increased  during  the  pandemic.  Already 
before the COVID-19 crisis, the oversized public administration as well as poorly performing 
state-owned enterprises (SOEs) already had a significant impact on the economy, in particular 
in  terms  of  employment.  During  the  pandemic,  the  role  of  government  measures  gained 
further  prominence.  The  amount  of  contingent  liabilities  has  increased  as  a  result  of 
mitigation  measures,  such  as  providing  loan  guarantees,  which  were  extended  during  2021. 
Many  public  companies  rely  on  state  support  or  accumulate  payment  arrears  to  the  social 
security  systems  or  to  private  suppliers,  in  order  to  remain  in  operation.  This  creates 
substantial  liquidity  imbalances  in  other  areas  of  the  economy.  Public  procurement,  which 
represents  a  significant  share  of  public  spending  and  thus  plays  an  important  role  for  the 
private economy, continues to be managed on the basis of overly complex procedures. This 
facilitates corruption and leads to a preference for domestic suppliers which is incompatible 
with the EU acquis (see also chapter 5 – public procurement). There is still a wide range of 
administrated  prices,  and  during  the  pandemic  and  more  recently  in  response  to  rapidly 
increasing  energy  prices,  prices  of  certain  products,  such  as  hygiene  products,  have  been 
regulated.  

Officially recorded state aid is relatively low, at some 1¼ of GDP in 2019, according to 
the  latest  available  data.  However,  significant  indirect  state  support  continues  to 

55 

 
 
undermine the level playing field. In 2021, as part of the COVID-19 crisis support package, 
many  companies  benefitted  from  discretionary  state  assistance.  Available  data  on  provided 
assistance is incomplete. Nevertheless, the level of state aid appears to have been significant 
during  the  last  year.  State  aid  control  is  still  hindered  by  only  partial  legal  alignment  with 
European standards and  the lack of consistent  enforcement  of state aid  rules throughout  the 
country. The competences of the State Aid Council continue to be limited. This leaves room 
for unfair distortions of competition in the country.  

Privatisation and restructuring  

Progress with privatisation and restructuring has remained very limited. Publicly owned 
enterprises still play an important role in certain sectors, such as mining, but are often badly 
managed, leading to a significant burden on public finances. Despite some preparatory works 
at entity level, actual steps to restructure or to dissolve public enterprises have remained very 
limited. Strategic sectors such as transport and energy are still dominated by poorly managed 
and often inefficient state-owned companies. The share of the private sector in the country’s 
value added has remained rather stable over the last 5 years at around 80%, and it generates a 
similar share of the country’s employment.  

Functioning of the financial market  

Financial stability 

The financial market’s institutional and regulatory set-up remained fragmented, which 
impedes  banking  supervision.  The  institutional  and  regulatory  environment  for  the 
functioning of the financial market is largely in place, although key elements are decentralised 
and  the  central  bank’s  role  is  limited  to  coordinating  the  local  regulatory  and  supervisory 
agencies.  During  the  last  year,  the  central  bank’s  governing  board  was  only  operating  on  a 
technical mandate, as due to the blockage of state-level institutions, the appointment of a new 
governing  board  and  of  the  governor  were  delayed.  This  had  a  negative  impact  on  the  full 
functioning of the central bank. 

The banking sector has remained stable during the COVID-19 crisis. The quality of loan 
portfolios remained solid, despite expiring policy support. The share of non-performing loans 
(NPLs)  in  total  loans  declined  further  in  2021  and  reached  5.2%  in  the  second  quarter  of 
2022,  compared  to  5.7%  a  year  before.  There  was  limited  progress  on  removing  remaining 
obstacles to an effective and swift resolution of NPLs, including in the areas of out-of-court 
restructuring  and  the  securitisation  and  sale  of  NPLs.  Bank  profitability  started  to  improve 
after the fall during the pandemic. The return-on-equity ratio was at some 10.4% during 2021 
and rose slightly to 11.1% in the first half of 2022, while the return on average assets stood at 
about 1.4% during that period. The banking system's overall capital adequacy ratio recovered 
during the second half of 2021, and remained at 19.4% in the first half of 2022, compared to 
19%  a  year  before.  However,  there  are  big  differences  among  the  country’s  22  banks,  with 
some pockets of vulnerability remaining, in particular in the case of some smaller local banks. 
Furthermore,  there  is  a  notable  difference  between  foreign  and  domestic  banks  in  terms  of 
soundness indicators, with the former being more successful in reducing NPLs or improving 
loan provisioning. Like elsewhere in the Western Balkans, the degree of euroisation is rather 
high:  36% of deposits  and 45% of loans of  commercial banks were denominated in  euro in 
2021, although the share of euro denominated loans has been on a gradually declining trend in 
recent  years.  During  the  COVID-19  crisis,  the  central  bank  has  reassured  households  and 
corporations  on  the  stability  of  the  country’s  financial  sector  and  supported  debt  payment 
moratoria,  suggested  by  the  country’s  two  banking  agencies,  as  well  as  the  suspension  of 
dividend  payments  and  stricter  rules  on  remuneration.  Furthermore,  the  governments  of  the 
two entities supported lending by providing temporary guarantees to private sector loans. The 

56 

 
 
volume  of  those  guarantees  amounts  to  about  0.5%  of  GDP.  In  early  2022,  the  entities’ 
banking  agencies  took  over  the  Russian-owned  Sberbank  subsidiaries,  as  the  announcement 
of  sanctions  on  certain  Russian-owned  financial  institutions  had  led  to  a  bank  run  on  those 
subsidiaries, endangering their viability.  

Access to finance 

Credit  growth  picked  up  but  access  to  finance  often  remains  challenging.  Annual  loan 
growth  averaged  1.7%  in  2021,  with  nearly  3%  growth  in  the  second  half  of  2021.  This 
recovery  was  mainly  driven  by  household  loans,  which  account  for  some  30%  of  the  total 
credit stock. Bank deposit growth accelerated markedly, from 5.6% in 2020 to 10.1% in 2021.  
Interest rate spreads for consumer loans have declined, dropping during the last 5 years from 
above 6 percentage points to around 3 percentage points. However, this level is still relatively 
high, suggesting  elevated risks and/or a lack of  competition.  The five largest  banks account 
for about 80% of the sector’s assets. Private sector debt declined from 54.5 % of total debt at 
the end of 2021, which is higher than at the beginning of the year, and also markedly above 
the country’s five-year average before the pandemic. Financial literacy is limited in particular 
among  small  enterprises.  The  size  of  the  non-bank  alternative  financing  sector  and  of  the 
capital  markets  has  remained  small,  with  a  market  capitalisation  of  the  country’s  stock 
markets of about 17.5% of GDP in May 2022. The use of venture capital has continued to be 
very limited. The governments’ loan guarantees had a positive impact on the private sector’s 
access  to  finance.  However,  for  many  micro  and  small  companies  gaining  access  to  those 
guarantees appears to have been difficult.  

Functioning of the labour market  

Economic  recovery  and  government  support  measures  have  benefited  the  labour 
market,  but  structural  problems  persist.  The  number  of  registered  employed  was  some 
3.2% (26 500 persons) higher in the first half of 2022 than a year before, while the number of 
unemployed  declined  by  7.3%  (29 600  persons),  leading  to  a  drop  in  the  administrative 
unemployment rate to 30.8%, compared to 33.2% the year before. However, due to the strong 
decline in registered unemployed, the registered labour force shrank by about 0.3%, or some 
3 100  people.  Due  to  the  high  share  of  informal  employment,  in  particular  in  the  trade  and 
tourism  industry,  administrative  data  provides  only  a  partial  picture  of  the  country’s  labour 
market dynamics. Although due to methodological changes, the comparability of labour force 
survey  data  over  time  is  limited,  their  findings  largely  support  the  picture  of  decelerating 
employment growth and strong declines in unemployment. However, the overall labour force 
continued  to  decline,  partly  as  a  result  of  a  persistent  brain  drain,  with  a  high  share  of 
qualified and mobile workers leaving for job opportunities abroad. This has a negative impact 
on  the  country’s  competitiveness  as  well  as  its  growth  potential  in  the  medium-term. 
Reflecting  structural  problems  as  well  as  the  COVID-19  shock,  youth  unemployment  (age 
group  of  15-24  years)  is  particularly  high,  at  around  36%  in  June  2022.  While  in  the  pre-
pandemic period employment opportunities have been created in tourism and manufacturing, 
high unemployment has persisted for years due to challenges associated with skills mismatch 
and an insufficient increase in job creation as a result of weak investment in the capital stock. 
Key  factors  for  the  persistently  high  unemployment  are  a  lack  of  adequate  employment 
possibilities in the economy, a mismatch of education curricula with labour market needs, and 
the  high  tax  wedge,  in  particular  for  low-wage  earners.  The  labour  market  participation  of 
women and youth is still low, while unemployment rates of those two groups are significantly 
higher  than  for  men  in  core  working  age  cohorts.  Long-term  unemployment  has  remained 
high, with about 75% of the unemployed looking for a job for more than one year. During the 
last  year,  the  authorities  have  continued  to  implement  active  labour  market  measures, 

57 

 
 
although the efficiency of the measures is not evaluated sufficiently rigorously. These active 
measures support the employment of vulnerable or disadvantaged groups. The still substantial 
discrepancy  between  unemployment  data  according  to  administrative  and  according  to 
survey-based data points to the need to improve the country’s labour market statistics. 

The  labour  market  suffers  from  a  lack  of  qualified  labour,  which  contributes  to  high 
wage  growth.  Labour  mobility  within  the  country  remained  low.  Many  companies  suffer 
from  a  lack  of  qualified  labour,  which  is  further  exacerbated  by  high  emigration.  In 
combination with accelerating domestic price pressures, this scarcity of qualified labour has 
contributed  to  relatively  high  nominal  wage 
growth (4.4 % in  2021  and 9.4% in  the first  half 
of  2022.  This  translated  into  an  increase  in  real 
wages  by  some  2%  in  2021,  but  accelerating 
inflation  brought  this  increase  to  a  halt.  Public 
sector wages are relatively high compared to other 
sectors, in particular when taking into account the 
sector's  productivity,  which 
to  some  extent 
crowds out qualified labour in the private sector. 

2.3.2. The capacity to cope with competitive pressure and market forces within the 
Union 

Bosnia and Herzegovina has made no progress, and remains at an early stage in terms of 
capacity to cope with competitive pressure and market forces in the EU. There have been no 
significant  improvements  in  the  overall  quality  level  of  education,  while  measures  to 
improve  the  transport  and  energy  infrastructure  were  impeded  by  political  disputes. 
However, some structural adjustment took place, responding to strong external demand and 
the constraints imposed by COVID-19. The implementation of last year’s recommendations 
has been very limited. 

In order to support long-term growth, Bosnia and Herzegovina should in particular:  

  Improve  the  quality  of  education  and  training,  in  particular,  accelerate  the  modernisation  of 

curricula with a view to better alignment with labour market needs;  

  Increase the share of government capital spending in GDP, in particular by focusing on transport 
and energy infrastructure and on improving environmental standards. Improved management of 
public investment and an accelerated implementation of those investment projects that have been 
subject to a clear positive cost-benefit assessment are of particular importance in this respect. 

  Support  further  trade  integration  with  the  EU  and  CEFTA,  among  others  by  supporting 
alignment with European safety and quality standards, such  as those planned in the context of 
the Common Regional Market Action Plan. 

Education and innovation  

inadequate,  highly 

in  education  remains 

Investment 
fragmented  and  poorly 
coordinated, leading to varied standards within the country. Public spending on education 
accounted  for  some  4%  of  GDP  in  2020.  When  adding  private  spending  and  support  by 
foreign  donors,  the  overall  amount  stands  at  nearly  5%  of  GDP.  Despite  this  significant 
spending, in particular when taking into account the number of students, it fails to provide the 
country’s labour force with the skills and knowledge necessary for a smooth integration in the 
labour market. This is one factor for a particularly high youth unemployment rate (36.3% in 
June  2022  according  to  the  LFS),  twice  the  country’s  overall  unemployment  rate.  The 
insufficient coordination leads to a lack of common standards for various levels of education, 
as  well  as  in  differences  in  the  quality  of  teachers’  training  and  performance  evaluation. 

58 

203040506070010203040201620172018201920202021Graph 6.4: Bosnia and Herzegovina -Labour market trends (15-64 age group)Unemployment rate (lhs)Participation rate (rhs)Employment rate (rhs)Source: BiH Agency of Statistics 
 
Teaching  curricula  continue  to  be  outdated  and  are  still  not  sufficiently  aligned  with  the 
country’s  needs. The country participated for the first  time in  the 2018 PISA study. Results 
indicate that the students’ performance ranks well below the OECD average, which is a clear 
impediment  for  the  country’s  competitiveness  and  growth  potential.  Unfortunately,  Bosnia 
and Herzegovina refrained from participating in the follow-up study. The country’s illiteracy 
rate continues to be around 3%, largely as a result of a relatively high rate among women.  

Spending  on  research  and  innovation  is  limited  and  impeded  by  the  low  degree  of 
cooperation and coordination among the various levels of government, leading to a low 
efficiency of the overall system. The absence of an efficient funding system is another factor 
preventing the country’s innovation policy from achieving better results for the funds spent. 
The country’s research capacities remain limited, while brain drain continues, most notably in 
the health, medical, and IT sectors with no systematic measures having been introduced so far 
to address the issue. 

Physical capital and quality of infrastructure 

Investment  in  the  country’s  capital  stock  remained  impeded  by  continued  political 
uncertainties.  Gross  capital  formation  recovered  only  partially  as  it  grew  by  4.4%  in  2021 
after  a  drop  of  nearly  13%  in  2020.  This  has  led  to  a  further  decline  in  the  share  of  gross 
capital formation to 23% of GDP in 2021, compared to 24.5% in 2019, the last year before the 
COVID-19  pandemic.  Public  investment  remained  low,  reflecting  a  focus  on  COVID-19-
related  current  spending,  while  private  investment  was  also  negatively  affected  by  the 
continued uncertainty related to COVID-19 and political uncertainty. Inflows of foreign direct 
investment  (FDI)  recovered  from  a  low  level  to  its  5-year  pre-COVID  average  of  2.1%  of 
GDP,  after  1.7%  of  GDP  in  2020.  A  large  share  of  those  FDI  inflows  continue  to  be  re-
invested earnings of foreign investors in the financial sector as well as in tourism. As in the 
case of gross fixed investment, the low level of inflow of foreign investment is impeding the 
country’s  ability  to  achieve  a  higher  growth  trajectory.  Environmental  standards  have 
remained low and are often neglected, leading to high levels of pollution, impeding the health 
(and  thus  productivity)  of  the  country’s  labour  force  and  constituting  an  additional  factor 
supporting brain  drain.  Overall, the insufficient  momentum  in investment  and negligence of 
environmental standards continues to hamper improvement in the country’s growth potential. 

Investment  in  transport  and  energy  infrastructure  was  delayed  as  a  result  of  a  strong 
focus  of  public  spending  on  COVID-19  related  measures,  but  also  due  to  political 
stalemates  on  country  and  entity  level  including  the  absence  of  a  state-level  budget  in 
2021 and the delayed 2022 budget.  Political disputes blocked necessary steps for updating 
the  regulation  of  the  energy  and  transport  markets,  while  the  country’s  spending  focus  was 
towards measures to support the economy in response to COVID-19. As a result, the markets 
for  electricity  and  gas  remain  fragmented  and  dominated  by  key  incumbent  companies. 
Infrastructure  connections  with  neighbouring  countries  as  well  as  the  country’s  level  of 
digitalisation  remain  inadequate.  Furthermore,  investment  into  improving  environmental 
standards, in particular the air pollution, has been neglected. 

Sectoral and enterprise structure  

Structural  change  has  continued  during  the  last  year,  with  a  continued  shift  towards 
trade  and  transport.  In  the  first  quarter  of  2022,  the  share  of  value  added  in  the  trade, 
transport  and  tourism  sectors  rose  to  21.7%  of  GDP,  compared  to  19.7%  of  GDP  a  year 
before, while due to below-average growth the share of the public sector declined by nearly 
one percentage point,  from  17.9% in  the first quarter of 2021 to  17% in the first quarter of 
2022.  During  the  last  years,  the  company  structure  registered  some  increase  in  the  share  of 
micro companies (0-9 employees), and medium-sized companies employing between 50-249 

59 

 
 
employees.  However,  the  majority  of  new  companies  were  often  trading  companies  with 
lower  value  added.  Some  93%  of  all  companies  are  in  the  group  of  small  and  micro 
businesses, i.e. those with less than 50 employees.  

Economic integration with the EU and price competitiveness  

Trade  and  investment  integration  with  the  EU  remained  high  but  overall  trade  is 
below its potential.  In response to  the  strong export decline during the beginning of the 
COVID-19  crisis,  exports  rose  by  40%  year-on-year  in  the  first  half  of  2022,  mainly  as 
result  of  strong  demand  from  the  EU  (Germany,  Italy,  Croatia),  but  also  from  CEFTA 
countries such as Serbia. During the five years before the pandemic, trade slightly shifted 
towards  the  neighbouring  region,  reflecting  stronger  exports  to  countries  such  as  Serbia 
and Croatia. Exports to the EU-27 as a share of total merchandise exports rose from some 
72%  in  2021  and  rose  to  74%  in  the  first  quarter  of  2022.  Exports  to  CEFTA  countries 
increased their share in total exports, reaching 16.7% in 2021 and 18.7% in the first half of 
2021.  The  country’s  openness  to  trade  (exports  and  imports  as  a  percent  of  GDP) 
recovered  in  2022  from  the  sharp  drop  in  in  the  first  quarter  of  2021,  reaching  89%  of 
GDP, compared to 69% the year before. Even before the pandemic, the country’s openness 
to  trade  was  relatively  low,  in  particular  in  view  of  its  relatively  small  economy.  The 
export  structure  is  not  very  diversified  and  relies  mainly  on  basic  metals,  furniture,  and 
textiles. While some further progress has been achieved in addressing non-tariff barriers to 
trade  with  the  EU,  such  as  required  phytosanitary  and  sanitary  standards,  overall 
compliance  with  these  requirements  remains  weak.  The  integration  of  the  country’s 
financial  and capital  markets  with  the EU is  still rather low, although a large part of the 
banking  sector  is  owned  by  European  banks.  About  two  thirds  of  the  country’s  stock  in 
FDI  is  originating  from  the  EU  countries.  Annual  FDI  inflows  largely  show  a  similar 
pattern. 

The  country’s  overall  price  competitiveness  has  deteriorated  somewhat.  After  a  long 
period of gradual improvements during 2016-2021 by some 4%, the country’s real effective 
exchange  rate  started  to  appreciate  in  December  2021  and  was  4.4%  higher  in  April  than  a 
year before, reflecting a rising positive inflation differential with the country’s trade partners.  
In  nominal  effective  terms,  the  currency  appreciated  by  1.2%  during  that  period,  mainly 
reflecting  the  exchange  rate  movements  of  the  US  dollar,  the  Turkish  lira  and  the  Russian 
rouble against the euro, to which the Convertible Mark is pegged.  

2.4. PUBLIC PROCUREMENT, STATISTICS, FINANCIAL CONTROL  

Chapter 5 - Public procurement  

EU rules ensure that public procurement of goods, services and works in any Member State is 
transparent  and  open  to  all  EU  companies  on  the  basis  of  non-discrimination  and  equal 
treatment.  

60 

025507520142015201620172018201920202021Graph 6.5a: Bosnia and Herzegovina -Exports of goodsEUCEFTAOtherSource: WiiW% ofGDP025507520142015201620172018201920202021Graph 6.5b: Bosnia and Herzegovina -Imports of goodsEUCEFTAOtherSource: WiiW% ofGDP 
 
 
Bosnia  and  Herzegovina  has  some  level  of  preparation  in  the  area  of  public  procurement. 
There  was  some  progress  in  the  reporting  period.  The  country  has  adopted  amendments  to 
the public procurement law aiming at aligning its legislation with the EU  acquis. It needs to 
continue the alignment process and strengthen capacities. Public procurement remains prone 
to  irregularities  and  vulnerable  to  corruption  during  the  procurement  process  and  contract 
implementation.  Selective  and  non-transparent  judicial  follow-up  in  cases  of  corruption  in 
public procurement is a cause of significant concern. The country needs to ensure continued 
equal  treatment  of  domestic  and  EU  bidders  in  awarding  public  contracts  in  line  with 
provisions of the SAA. Recommendations from last year remain valid. 

In the coming year, Bosnia and Herzegovina should in particular: 

  further  align  the  public  procurement  law  with  the  EU  public  procurement  acquis, 

including in the area of concessions; 

  adopt  a  new  public  procurement  strategy  2023-2027  and  accompanying  action  plan  that 

supports its implementation; 

  strengthen  the  administrative  capacities  of  the  Public  Procurement  Agency  and  the 
Procurement  Review  Body  by  increasing  their  staff  and  providing  appropriate  training, 
and making the procurement process more transparent. 

Institutional set-up and legal alignment 

The legal framework is partially in line with the EU acquis. The law on public procurement 
was  amended  in  August  2022  to  further  align  it  with  the  EU  acquis,  after  several  years  in 
parliamentary  procedure.  The  relevant  implementing  legislation  needs  to  be  adopted.  The 
legal framework on concessions and public-private partnerships is still highly fragmented and 
needs  to  be  aligned  with  the  EU  acquis.  All  legal  and  financial  instruments  used  for  public 
procurement  and concessions, including intergovernmental  agreements  concluded with  third 
countries,  should  comply  with  the  principles  of  transparency,  competition,  equal  treatment 
and non-discrimination. 

The  new  2023-2027  strategy  for  the  development  of  public  procurement  and  relevant 
action  plan  have  not  yet  been  adopted.  The  Public  Procurement  Agency  adopted  a  plan  for 
integrity and a plan for the fight against corruption in 2022.  

The Public Procurement Agency is the body authorised to initiate, implement and monitor the 
public  procurement  policy  in  all  sectors.  The  Agency’s  administrative  capacities  are 
insufficient, particularly concerning the monitoring and support functions (22 versus 45 civil 
servants planned). It manages and develops the Public Procurement Portal. Tender documents 
and other important guidelines can be downloaded from the Portal. However, the exchange of 
information  and  tender  participation  is  not  fully  conducted  electronically  and  as  per  EU 
standards,  but  still  partly  in  paper  form.  Better  coordination  with  the  audit  and  judiciary 
institutions is necessary. 

Implementation and enforcement capacity 

In 2021,  Bosnia and Herzegovina’s  public procurement  market  represented 7.51%, of the 
country’s GDP, slightly below the 2020 level. The average number of bids per tender remains 
low at 2 in 2021.  

On monitoring the award and implementation of contracts, the administrative capacities 
of the Public Procurement Agency are insufficient to fulfil its tasks. Statistics collected from 
contracting authorities show an increase in the use of the negotiated procedure without prior 
publication (11.87% in 2021 compared to 8.53 % in 2020). The use of price as the only award 

61 

 
 
criterion remains high with 70% of public contracts. The Agency’s monitoring role should be 
strengthened  to  identify  potential  weaknesses  and  irregularities  in  procurement  procedures. 
The  Agency  has  not  prepared  any  manuals,  guidelines  or  other  practical  tools  for  the 
implementation of the public procurement law, apart from the manual on the e-Procurement 
system.  The  Agency’s  collection  of  opinions  and  solutions  to  the  most  common  practical 
problems  faced  by  practitioners  is  not  regularly  updated.  A  mechanism  to  regularly  and 
systematically coordinate the interpretation of public procurement legislation between the key 
institutions involved has not been put in place. 

The  capacity  to  manage  public  procurement  processes  is  weak.  Specialised  procurement 
functions need to be established in each contracting authority and staffed with officials who 
have the relevant  skills  and expertise. There was no new development  to  improve  integrity 
and conflicts of interest in this area. Public procurement remains prone to irregularities and 
vulnerable to corruption during the procurement process and contract implementation. There 
has been no sanctioning of corruption cases in Public procurement by the courts. The Public 
Procurement  Agency  organised  training  on  public  procurement  for  most  contracting 
authorities across the country and enhanced its cooperation with prosecutors and civil society 
to monitor violations of procurement rules. 

Efficient remedy system  

The  legislation  on  the  right  to  appeal  is  broadly  in  line  with  the  EU  acquis  although  time 
limits are excessively short. The Procurement Review Body is a quasi-judicial body reviewing 
complaints from bidders. It has offices in three locations (Sarajevo, Banja Luka and Mostar), 
but no formal mechanism to coordinate them and ensure consistent decision-making and legal 
certainty. The functioning of the Procurement Review Body continues to be weak, primarily 
due  to  its  insufficient  staffing  and  technical  capacity.  The  number  of  appeal  cases  is 
increasing  and  inconsistency  of  decisions  remains  the  main  issue.  Only  a  small  number  of 
decisions  have  been  challenged  before  the  Court  of  Bosnia  and  Herzegovina.  The 
transparency  of  the  decision-making  of  the  Procurement  Review  Body  needs  to  be 
significantly enhanced. The length of administrative disputes against its decisions in the Court 
of Bosnia and Herzegovina remains excessive.   

Chapter 18 - Statistics  

EU rules require Member States to be able to produce good quality statistics in line with the 
principles  of  the  European  Statistics  Code  of  Practice  and  statistics  based  on  professional 
independence,  impartiality,  reliability,  transparency  and  confidentiality.  Common  rules  are 
provided for the methodology, production and dissemination of statistical information. 

Bosnia and Herzegovina is at an early stage of preparation in the area of statistics. Limited 
progress  was  made,  notably  by  completing  a  survey  on  income  and  living  standards.  The 
country  should  enhance  cooperation,  coordination,  decision-making  processes  and  the  legal 
basis to develop the national statistical system in key areas, increasingly  applying European 
and international standards. In order to better support policy analysis, improvement is needed 
on  the  provision  of  timely,  exhaustive  and  countrywide  statistics  on  government  finances, 
national accounts and the labour market. The classification of regions equivalent to the NUTS 
classification still needs to be finalised. Last year’s recommendations remain mostly valid. 

In the coming year, Bosnia and Herzegovina should in particular:  

  adopt a master plan for production of national accounts;  

  continue implementing the surveys on income and living conditions; 

62 

 
 
  adopt  a  methodology,  responsibilities  and  funding  for  the  next  agricultural  census  and 

adopt a roadmap for preparation of the next population census.  

As  regards  statistical  infrastructure,  the  law  on  statistics  of  Bosnia  and  Herzegovina  still 
needs to be aligned with the principles of the European Statistics Code of Practice. Statistics 
are  only  to  some  extent  timely,  relevant  and  reliable.  Coordination  between  the  Agency  for 
Statistics  of  Bosnia  and  Herzegovina  (BHAS)  and  other  producers,  including  the  entities’ 
offices, needs to be strengthened. The latter need to carry out surveys in time and according to 
the overall statistical programme.  

The  Agency  for  Statistics  needs  to  have  access  to  administrative  data  beyond  that  of  the 
Indirect  Taxation  Authority.  The  Agency  for  Identification  Documents,  Registers  and  Data 
Exchange (IDDEEA) has begun cooperating to improve transport statistics.  

On classifications and registers, the Statistical Business Register continues to be maintained, 
but  data  received  from  administrative  sources  remains  insufficient.  The  main  business 
demography statistics were sent to Eurostat in February for the first time. The address list of 
agricultural  households is  being used to  prepare  a quality  research  framework necessary  for 
the future agricultural  census.  The main statistical  classifications are in  place. However, the 
equivalent  to  NUTS  II  regions  has  only  been  provisionally  defined  and  accepted  by  the 
European  Commission  until  Bosnia  and  Herzegovina  finalises  the  entire  classification  and 
includes in it the definition of the equivalent to NUTS III level as well.  

On macroeconomic statistics, the production of national accounts continues to deviate from 
the  EU  acquis,  and  a  master  plan  needs  to  be  agreed  among  the  three  statistical  institutes. 
Annual  accounts  are  compiled  using  production,  expenditure  and  income  approaches,  while 
quarterly accounts are compiled only according to the production and expenditure approaches. 
Sector accounts are not produced.  

Regarding  the  transition  to  ESA  2010  methodology,  the  sector  classification  is  complete 
except  for  sub-sectors  of  the  general  government  sector.  Moreover,  the  responsibility  for 
implementation  is  still  unclear.  Bosnia  and  Herzegovina  needs  to  provide  the  Commission 
with its GDP per capita figures harmonised at NUTS II level. Balance of payments statistics 
are harmonised with current international statistical standards.  

Some progress was made in compiling government  finance statistics, but the data are not in 
line  with  ESA  2010.  For  the  period  2015-2021,  yearly  data  as  well  as  quarterly  data  for 
2020 Q1  –  2022 Q1  were  processed  and  submitted  to  Eurostat.  Bosnia  and  Herzegovina 
continued to submit excessive deficit procedure tables, however the quality and completeness 
need  to  be  further  improved.  Quarterly  balance  of  payments  and  international  investment 
position  data  were  transmitted.  GDP  time  series  by  production,  income  and  expenditure  is 
now  available  for  the  period  2000-2022.  Bosnia  and  Herzegovina  has  also  put  in  place 
adequate  infrastructure  for  data  transmissions  to  Eurostat  and  the  European  Central  Bank. 
Bosnia  and  Herzegovina  does  not  transmit  Harmonised  Indices  of  Consumer  Prices  (HICP) 
data to Eurostat. 

On  business  statistics,  short-term  statistics  for  industry,  construction  and  services  are  not 
fully available and will need to be established in line with the requirements of the EU acquis. 
The  structure  for  all  required  datasets  for  short-term  business  indicators  has  been  prepared, 
and the data was sent to Eurostat. Statistics related to the production of manufactured goods 
(PRODCOM) are sent to Eurostat on an annual basis. 

Foreign affiliates statistics are produced by the Agency for Statistics for inward statistics and 
by  the  Central  Bank  for  outward  statistics,  but  full  compliance  with  regulations  for  these 

63 

 
 
statistics  needs  to  be ensured.  Inward foreign affiliates statistics for 2019 were submitted to 
Eurostat. Tourism statistics are limited to data on accommodation, but a private and business 
travel  survey  was  conducted  for  the  reference  years  2018  and  2019.  The  same  survey  is 
planned  in  2022  for  the  reference  year  2021.  Research  and  development  statistics  are 
published  annually.  The  Community  Innovation  Survey  is  conducted  on  a  regular  basis. 
Information and communications technology statistics were also provided to Eurostat. 

On  social  statistics,  preparation  for  the  next  population  and  housing  census  has  hardly 
progressed. The necessary legislation has not been agreed among entity statistical institutes. A 
new master sample frame is  now available and was used not  only for the household  budget 
survey, but will also be used for upcoming surveys, such as the labour force survey and a full-
scale  survey  of  income  and  living  conditions  (fieldwork  May-July  2022).  The  labour  force 
survey is implemented annually and on a quarterly basis, and data for the first quarter of 2022 
was published by BHAS. Both the questionnaire and methodological documents were aligned 
with  Eurostat  recommendations.  Neither  the  labour  cost  index  nor  the  structure  of  earnings 
survey  are implemented. Job vacancy and social  protection statistics are collected regularly. 
Intensified  cooperation  with  the  institutions  responsible  for  monitoring  migration  flows  is 
needed. Education statistics covering all levels of government are published annually. Culture 
statistics include 15 domains, although coverage is not yet adjusted to Eurostat requirements. 
There have been some improvements regarding crime statistics, which are collected monthly 
and submitted annually for the United Nations Office on Drugs and Crime questionnaire. 

The  lack  of  a  recent  agricultural  census  –  the  last  one  took  place  in  1960  –  is  a  major 
limitation  for  agricultural  statistics.  Special  attention  needs  to  be  paid  to  agreeing  the 
methodology,  responsibilities and budgetary aspects  of  a future  census  planned  for 2023.  A 
very  limited  number  of  statistical  indicators  are  produced,  including  some  experimental 
estimates. Supply balance sheets are not available. Statistics on crops and animal production 
are not in line with the EU acquis.  

As for energy statistics, further work is needed to improve the quality of data in line with EU 
requirements, in particular annual data on renewable energy sources and basic monthly data 
on  oil.  The  harmonised  calculation  of  the  share  of  energy  from  renewable  sources  for  the 
reference year 2019 was submitted to Eurostat. 

Regarding environmental statistics, the Agency for Statistics continued to publish data from 
the  annual  statistical  surveys  on  climate  change  and  greenhouse  gas  emissions  from 
agriculture  and  waste  disposal.  The  Agency  for  Statistics  reported  environmental  protection 
expenditures to Eurostat for the first time but has yet to report environment-related taxes. 

Chapter 32 - Financial control 

The  EU  promotes  the  reform  of  national  governance  systems  to  improve  managerial 
accountability, sound financial management of income and expenditure, and external audit of 
public funds. The financial  control  rules further protect  the EU’s financial interests against 
fraud in the management of EU funds and the euro against counterfeiting. 

Bosnia  and  Herzegovina  has  some  level  of  preparation  in  this  area.  Good  progress  was 
made  in  fulfilling  last  year  recommendations,  notably  in  implementing  at  a  good  rate  the 
public internal financial control (PIFC) strategies in both entities. The secondary legislation 
and methodology were updated at all levels and incorporated in the IT application on PIFC, 
generating  consolidated  annual  PIFC  reports  at  all  levels.  A  communication  strategy  2021-
2025 has been adopted at the state level; other levels of government need to develop one. All 
central  harmonization  units  need  to  continue  strengthening  their  capacities  and  monitor  the 
effectiveness of internal control functions in the public sector, with particular attention to the 

64 

 
 
risk  management  and  internal  audit  functions.  Bosnia  and  Herzegovina  should  improve  the 
quality of external audit reports and step up communication efforts at entity level to reinforce 
public awareness.  

In the coming year, Bosnia and Herzegovina should: 

  improve  the  relevant  PFM  legislation  at  all  levels  of  government  to  better  implement 

managerial accountability across public entities;  

  improve the quality of the monitoring on public companies, by using the public internal 

financial control IT application;  

  improve the impact of SAIs work through communication strategies at entity level. 

Public internal financial control 

A comprehensive strategic framework for public internal financial control (PIFC) is in place 
together  with  individual  2020-2025  PIFC  strategies,  which  are  being  implemented.  Annual 
PIFC reports are adopted by each level of government. However, the respective governments 
and  parliaments  should  monitor  the  implementation  of  recommendations  provided  by  the 
Central Harmonisation Units (CHU), the Supreme Audit  Institutions (SAIs) and the Internal 
Auditors. The Brčko District still needs to make the monitoring framework operational. 

Managerial accountability is embedded in the strategy on public administration and public 
internal  financial  control  and  public  financial  management,  but  remains  to  be  properly 
implemented. Partially, the problem lies with unclear provisions regulating the organisation of 
public  administration  and  the  unclear  relationship  between  supervisory  and  subordinated 
bodies, partially with confused policy-making roles and reporting lines and lack of adequate 
management  of  performance  of  subordinated  bodies.  Coordination  of  policy  content  with 
government  priorities  is  lacking  throughout  the  public  administration.  Most  public  entities 
have strategic plans  with  objectives and performance indicators, but  checks on performance 
are missing. While delegation of authority within public service is defined in the legislation 
on  internal  control,  such  remains  only  understood  as  financial  one  and  has  not  yet  been 
properly implemented. (see also Public Administration Reform).  

The legal framework for the functioning of internal control is largely in place at all levels of 
government,  including  rulebooks  on  internal  control  standards  and  risk  management  for  its 
implementation. However, effective implementation of internal control systems still needs to 
be improved at all levels. Particularly, the legal provisions on internal control remain not well 
integrated  in  the  general  Public  Finance  Management  regulations,  business  processes  and 
management information systems at all levels of government and in the public enterprises. A 
countrywide  management  information  system  for  risk  management,  internal  control  and 
monitoring and reporting of the financial management and control activities is in place (PIFC 
application) and needs to be used for risk assessment, risk mitigation and internal audit.  

In  2021,  there  was  a  substantial  increase  in  first-level  budget  spending  units  and  public 
enterprises  submitting  an  internal  control  self-assessment  report  to  the  CHUs  via  the  PIFC 
application  from some 500 in 2020 to 656 reports in 2021. All state-level institutions, some 
70% of the first level budget organisations in the Federation entity and more than 80% in the 
Republika  Srpska  entity  submitted  their  self-assessment  reports  for  2020  online.  Risk 
management data has been increasingly recorded in the risk register of the PIFC application. 
Risk registers are established in most state-level public institutions; entities need to increase 
further  coverage  of  institutions  in  this  area  and  particularly  so  in  the  Federation.  Risk 
management  is  not  yet  seen  as  a  management  activity  and  remains  not  incorporated  in  the 
decision-making cycle.  Budget inspection is in place at each level. The legal basis ensures a 

65 

 
 
separation  of  budget  inspection  from  internal  audit  function  and  such  is  maintained  across 
institutions also in practice.  

Internal  audit practice  is  regulated  and is  in  line with  international  audit  standards.  In the 
reporting period, the internal audit manuals at all levels have been updated and embedded in 
the internal audit management module of the PIFC IT application, including quality assurance 
provisions.  The  CHUs  adopted  a  methodology  on  quality  reviews  on  internal  control  and 
internal audit and should start with the implementation in 2022. Despite the positive trend in 
filling  the  number  of  available  internal  audit  job  positions  –  from  71%  (322  out  of  451)  in 
2021, to 77% (350 out of 451) for 2022 – the persisting problem lies in the fragmentation of 
the internal audit system and weak capacities of those units. The CHUs should consider some 
level  of  centralisation  and  further  strengthening  of  the  joint  internal  audit  services.  While 
nearly all appointed internal auditors in the public sector have become certified, an increase 
from  a  total  of  721  in  2021  to  798  certified  internal  auditors  in  2022  has  continued.  The 
problem of the lack of skills in this area is partially addressed by implementing the internal 
audit  management  software  in  2021  as  part  of  the  PIFC  application.  This  ensures  a  unified 
methodological  approach  on  the  audit  process,  while  increasing  quality  assurance.  Internal 
audit certification procedures are in place and implemented at all levels of government except 
in the Brčko District. However, more needs to be done to increase professional development 
of audit staff, especially on risk assessment, using IT and work with analytical tools. 

Central harmonization units (CHUs) have been established at state, entity levels and Brčko 
District.  The  three  CHUs  at  state  and  entity  level,  prepare  yearly  consolidated  reports, 
whereas  Brčko  District  yet  needs  to  deliver  on  that.    The  PIFC  IT  application  for  financial 
management control and internal audit reporting and monitoring was tested at all levels. With 
exception of the Federation  CHU who has very  weak capacities, the job  positions are filled 
and there is sufficient staff and administrative capacity to provide methodological  guidance, 
promote and monitor PIFC reforms via the PIFC application. The quality of the PIFC reports 
needs to be improved, by including risk management, and performance indicators for public 
companies  for  monitoring  fiscal  risks.  Their  impact  on  internal  control  remains  weak,  as 
recommendations  remain  not  well  implemented  across  public  entities  across  all  levels.  The 
coordination Board of Central Harmonisation Units continued its work according to the work 
plan of 2021, but its effectiveness in driving reforms needs to improve.  

External audit 

With regard to the constitutional and legal framework there is no constitutional anchorage 
of  any  of  the  Supreme  Audit  Institutions  (SAI).  The  functional,  operational  and  financial 
independence  of  the  SAIs  at  all  respective  levels  of  government  is  regulated  in  the  specific 
SAI  laws,  broadly  in  line  with  the  standards  of  the  International  Organisation  of  Supreme 
Audit  Institutions  (INTOSAI).  No  instances  show  that  such  independence  is  violated  in 
practice. 

The  institutional  capacity  of  SAIs  needs  to  be  strengthened  across  levels  of  government. 
External audit coverage of the cantonal level remains weak. All SAIs have been implementing 
their strategic development plans for 2021-2025. SAIs should continue to work closely with 
the  prosecution  authorities  to  see  how  to  best  handle  instances  of  possible  fraud  and 
corruption  that  the  SAI  uncovers  during  an  audit.  The  Coordination  Board  of  State  Audit 
Institutions needs to be further strengthened in effectively following up with audit offices on 
how the legal framework and related procedures on external audit can be implemented across 
levels and as well establish a better monitoring system on progress undertaken by the various 
audit offices. 

66 

 
 
With regard to the quality of audit work, all the SAIs have a broad mandate, which covers 
financial, compliance and performance audit. The trend on number of performance audits has 
remained  stable  across  levels.  The  SAIs  have  INTOSAI  compliant  methodologies  and 
manuals.  The  SAIs  should  consider  improving  the  quality  of  their  audits  in  providing 
compliance  assurance  and  increase  the  number  of  performance  audits.  However,  the 
assessments  are  of  general  nature.  The  SAIs  need  to  apply  comprehensive  internal  control 
assessments tailored to the audited areas, types of transactions and type of organisations. 

The impact of the audit work of all SAIs is limited. The audit recommendations continue to 
be  predominantly  focused  on  formal  compliance.  Implementation  rate  of  recommendations 
continues to remain low at all levels, between 25% to 40% to be fully implemented, or in the 
process  of  being  implemented.    While  parliaments  have  procedures  in  place  for  examining 
audit  reports,  the  level  of  parliamentary  scrutiny  to  these  reports  varies  across  levels  of 
government. SAIs need to step up efforts for closer partnerships with respective parliaments 
in making their recommendations binding for each government level. 

The  quality  of  the  audit  findings  needs  to  be  improved.  The  results  should  be  presented  in 
terms of value added by the SAIs and communicated in a more efficient manner in the audit 
reports and in the media. Some efforts were undertaken in the outreach activities of SAI at the 
state  level  by  developing  and  publishing  the  communication  strategy  2022-2025  and 
organising a consultative meeting with civil society. In the Federation entity and in the Brčko 
District better communication of SAIs is seen as a strategic objective in the new development 
strategy 2021-2025, and all entities need to still develop communication strategies. 

Protection of the EU’s financial interests 

The legislation at all levels of government ensures some degree of EU acquis alignment. No 
progress was reported on alignment with the Directive on the fight against fraud to the EU’s 
financial interests by means of criminal law. An anti-fraud coordination service (AFCOS) and 
the corresponding AFCOS network are not yet set up, and the country has not yet adopted an 
anti-fraud strategy.  

While  there  is  no  solid  track-record  on  cooperation  with  the  Commission  during 
investigations, the State Investigation and Protection Agency and the Ministry of Finance and 
Treasury  ensure  ad  hoc  cooperation  sis.  As  EU  funds  are  not  managed  indirectly  by  the 
country  authorities,  Bosnia  and  Herzegovina  does  not  report  on  irregularities  to  the 
Commission through the Irregularity Management System.  

In  the  reporting  period,  the  State  Prosecutor’s  Office  of  Bosnia  and  Herzegovina  provided 
OLAF  with  the  information  requested  in  the  context  of  an  ongoing  investigation.  Further 
support  and  information  was  also  provided  for  the  purpose  of  another  case  by  a  District 
Prosecutor’s Office.  

Protection of the euro against counterfeiting 

Bosnia and Herzegovina has not ratified the 1929 Geneva Convention for the suppression of 
counterfeiting currency. The level of EU acquis alignment for technical aspects needs to be 
assessed. The Central Bank has a regulation in place that obliges commercial banks and other 
entities to withdraw all suspect banknotes and coins from circulation. However, no sanctions 
are  imposed  for  failure  to  fulfil  this  obligation.  The  Commission  does  not  yet  have  a 
cooperation agreement on coins with the Agency on Forensics of Bosnia and Herzegovina.  

67 

 
 
 
3. 

GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION  

Good neighbourly relations and regional cooperation form an essential part of Bosnia and 
Herzegovina’s  European  integration  process  and  contribute  to  stability,  reconciliation  and  a 
climate conducive to addressing open bilateral issues and the legacies of the past.  

Bosnia  and  Herzegovina  maintained  its  engagement  in  a  number  of  regional  cooperation 
initiatives,  such  as  the  Central  European  Free  Trade  Agreement  (CEFTA),  Energy 
Community, Transport Community, the South-East European Cooperation Process  (SEECP) 
and the Regional Cooperation Council, of which it hosts the seat.12 Bosnia and Herzegovina 
took over chairmanship of the Adriatic and Ionian Initiative in May 2022. 

Following  the  May  2022  Foreign  Affairs  Council,  EU  foreign  ministers  held,  for  the  first 
time,  an  informal  exchange  of  views  with  Western  Balkans  counterparts.  The  EU  and 
Western Balkans Leaders Meeting on 23 June 2022 reaffirmed their EU perspective of the 
region  and  gave  impulse  to  intensify  cooperation,  in  particular  on  integration  into  EU 
measures  on  food  and  energy  supplies  and  independence,  as  well  as  to  support  capacity 
building  for  cyber  security  and  the  social  agenda,  notably  involving  youth  in  the  economy. 
The meeting was also an opportunity to discuss closer political cooperation, including foreign 
policy alignment of the Western Balkans with EU positions and restrictive measures. 

At the EU-Western Balkans summit in Brdo pri Kranju in October 2021, the six Western 
Balkans leaders reaffirmed their commitment to inclusive regional cooperation, strengthening 
good  neighbourly  relations  and  investing  more  decisive  efforts  in  establishing  the  Common 
Regional  Market.  The  summit  announced  a  range  of  concrete  deliverables  benefiting  the 
Western Balkans, including the Economic and Investment Plan; the pledge to boost COVID-
19  vaccination  rates;  the  path  towards  lower  roaming  costs;  an  innovation  agenda  for  the 
Western  Balkans;  green  lanes  to  reduce  border  waiting  times  and  Transport  Community 
action plans for smart transport and sustainable connectivity.  

The Common Regional Market, as agreed by the leaders of the Western Balkans at the 2020 
Berlin process summit in Sofia, is critical in increasing the attractiveness and competitiveness 
of  the  region.  It  will  help  Bosnia  and  Herzegovina  to  speed  up  the  recovery  from  the 
aftermath  of  the  pandemic,  notably  to  attract  investors  looking  for  diversification  of  supply 
and shorter value chains and to maximise the benefits of the infrastructure investments under 
the  Economic  and  Investment  Plan.  A  number  of  important  decisions  to  facilitate  the 
movement of workers remain blocked. It is important that all parties play a constructive role 
in building the Common Regional Market and deliver on their joint commitments set out in its 
action plan. The Chairman of the Council of Ministers of Bosnia and Herzegovina attended as 
observer  the  summits  of  the  Open  Balkans  Initiative  held  in  June  2022  in  Ohrid  and  in 
September 2022 in Belgrade. 

In October 2021, Bosnia and Herzegovina along with other Western Balkan partners endorsed 
the Action Plan for the  Green Agenda for the  Western Balkans, which aims at  reflecting 
the  European  Green  Deal  and  contributing  to  the  sustainable  socio-economic  development 
and  the  green  recovery  of  the  region  after  the  pandemic.  Bosnia  and  Herzegovina  should 
contribute  to  successfully  implementing  this  joint  regional  vision,  with  a  high  level  of 
ambition, putting sustainable development, resource efficiency, nature protection and climate 

12 Bosnia and Herzegovina also actively participates in initiatives such as the Brdo-Brijuni Process, the Central 
European Initiative, the Adriatic-Ionian Initiative, the EU Strategies for the Danube Region and for the Adriatic-
Ionian  Region,  the  Migration,  Asylum,  Refugees  Regional  Initiative  (MARRI),  the  Regional  School  of  Public 
Administration  (ReSPA),  the  Regional  Youth  Cooperation  Office  in  the  Western  Balkans  (RYCO),  the  South 
East European Cooperation Process (SEECP) and the Western Balkans Fund. 

68 

 
 
                                                           
action at the centre of all economic activities. 

Bosnia  and  Herzegovina  has  continued  to  closely  cooperate  with  Croatia,  Montenegro  and 
Serbia under the Sarajevo Declaration Process, which aims to find sustainable solutions to 
refugees and displaced persons as a result of the armed conflicts in ex-Yugoslavia during the 
1990s.  Within  the  framework  of  the  Regional  Housing  Programme  (RHP),  2 034  housing 
units  have  been  built,  purchased  or  reconstructed  by  end  June  2022  in  Bosnia  and 
Herzegovina, able to accommodate circa 6 100 persons. The success of the programme risks 
being  jeopardised  by  important  delays  in  construction,  particularly  in  the  Republika  Srpska 
entity,  as  well  as  in  co-funding  by  Bosnia  and  Herzegovina.  Significant  challenges  remain 
with regard to the economic and social integration and wellbeing of many families, which is 
required to ensure the sustainability of return.  

The  unresolved  fate  of  missing  persons  who  disappeared  during  the  conflicts  of  the  1990s 
remains  a  key  issue  to  be  solved  in  the  Western  Balkans.  Despite  steady  progress  in 
identification  (70  persons  in  2021  and  127  in  the  first  half  of  2022),  7 590  persons  are  still 
missing as a result of the conflict. Further efforts are needed at the regional level through the 
missing persons group established in 2018 under the Berlin Process to strengthen cooperation.  

Bosnia and Herzegovina generally maintains good bilateral relations with other enlargement 
countries and neighbouring EU Member States.  

Relations  with  Albania  are  friendly  and  without  open  issues,  with  occasional  high-level 
bilateral  visits.  The  two  countries  have  yet  to  establish  full-fledged  bilateral  embassies,  as 
agreed the previous year. Trade flows remain low.  

There are no official relations with  Kosovo, as  Bosnia and Herzegovina does not recognise 
Kosovo’s  independence  and  the  two  maintain  a  strict  visa  regime.  Bilateral  meetings  took 
place  occasionally  at  the  margins  of  regional  and  multilateral  summits.  An  initiative  to 
simplify the visa procedure for citizens of Kosovo is still pending.  

Bilateral relations with Montenegro are good with occasional high-level bilateral visits. The 
agreed border demarcation is yet to be physically marked. Three joint border crossing points 
remains to be set up.  

Relations with North Macedonia are good with occasional high-level bilateral visits. Several 
bilateral agreements are in place, including on cooperation on EU integration.  

Relations with Serbia are good and stable overall, although without concrete steps forward in 
tackling  outstanding  issues,  including  on  borders.  Bilateral  high-level  visits  are  regular.  In 
March 2022, Bosnia and Herzegovina ratified the agreement with Serbia to establish a joint 
border  crossing  at  Bratunac/Ljubovija,  further  improving  efficiency  of  border  control  and 
implementation of the integrated border management policy. The two countries also need to 
reach  an  agreement  on  two  river  dams  on  the  Drina  River  and  a  part  of  the  Belgrade-Bar 
railway  which  crosses  into  Bosnia  and  Herzegovina’s  territory.  Serbia  and  the  Republika 
Srpska  entity  launched  the  construction  of  three  hydroelectric  power  plants  on  the  upper 
Drina. As this was done without involving Bosnia and Herzegovina’s state institutions, upon 
appeal  the  Constitutional  Court  ruled  that  a  decision  of  the  Commission  for  Concessions  is 
required;  this  is  now  pending.  Around  11 120  persons  with  Serbian  citizenship  voted  in  the 
Serbian  presidential  and  parliamentary  elections  at  15  locations  throughout  Bosnia  and 
Herzegovina in April 2022.  

Türkiye is a strong international supporter of Bosnia and Herzegovina and exchanges at high 

 This designation  is  without  prejudice  to positions on status, and is line  with UNSCR  1244/1999 and the ICJ 
Opinion on the Kosovo declaration of independence. 

69 

 
 
                                                           
level are frequent. The two countries reaffirmed their commitment to the construction of the 
Sarajevo-Belgrade highway, which Türkiye committed to finance.    

Relations  with  Croatia  are  good  overall,  although  affected  by  outstanding  bilateral  issues. 
Bilateral  visits  took  place  at  high  level.  There  are  open  issues  concerning  land  and  sea 
borders, and the 1999 border agreement has not been ratified by either side. Implementation 
of  the  2001  succession  agreement  has  been  affected  by  issues  on  private  properties  and 
acquired rights. Bosnia and Herzegovina reaffirmed its support to an expert and legal team to 
dispute Croatia’s plan to build a facility for radioactive waste and spent nuclear fuel storage at 
Trgovska Gora near the border.  

4. 

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP  

CLUSTER 2: INTERNAL MARKET  

This  cluster  is  key  for  Bosnia  and  Herzegovina’s  preparations  for  the  requirements  of  the 
EU’s internal market and is of high relevance for early integration and the development of the 
Common  Regional  Market.  Bosnia  and  Herzegovina  has  some  level  of  preparation  in  the 
areas of free movement of workers, company law, competition and financial services, whereas 
it is moderately prepared in free movement of capital and intellectual property. It is at an early 
stage of preparation on free movement of goods, services and right of establishment as well as 
on consumer and health protection. Unfortunately Bosnia and Herzegovina has made limited 
or no progress in any of the internal market areas.  

Major  steps  are  required  to  align  the  legislative  framework  with  the  EU  acquis  on  the  free 
movement  of  goods  and  adopt  a  countrywide  strategy  for  the  quality  infrastructure.  Bosnia 
and  Herzegovina  should  also  align  with  the  EU  Services  Directive,  provide  for  the  mutual 
recognition  of  qualifications  for  regulated  professions,  and  open  up  the  postal  market  for 
competition.  Bosnia  and  Herzegovina  should  remove  unjustified  restrictions  on  the  free 
movement of capital and urgently adopt a new law on anti-money laundering and countering 
the  financing  of  terrorism.  In  the  field  of  company  law,  Bosnia  and  Herzegovina  needs  to 
establish a central registry of businesses and a single authority for the oversight of statutory 
auditors.  Bosnia  and  Herzegovina  also  needs  to  implement  the  strategy  for  enforcement  of 
intellectual property rights and amend the Law on Patents. On competition policy, Bosnia and 
Herzegovina  should  remove  all  ethnic-based  decision  making  procedures  from  the 
Competition  Council and State Aid Council  and further  align  with  the EU  acquis;  it should 
ensure  the  operational  independence  of  the  State  Aid  Council  and  improve  its  enforcement 
record,  and  align  existing  aid  schemes  with  the  SAA.  On  financial  services,  Bosnia  and 
Herzegovina needs to improve coordination in supervision and enforcement, sign a financial 
stability  memorandum  of  understanding  and  strengthen  the  bank  resolution  framework.  On 
consumer and health protection, Bosnia and Herzegovina needs to align at all levels with the 
EU  acquis  on  serious  cross-border  health  threats  including  communicable  diseases,  tobacco 
control  (including  the  introduction  of  prohibition  to  smoke  in  public  places),  substances  of 
human origin, on medicines for human and veterinary use and the state-level law on consumer 
protection. 

Chapter 1 - Free movement of goods 

The free movement of goods ensures that many products can be traded freely across the EU 
based on common rules and procedures. Where products are governed by national rules, the 
principle of the free movement of goods prevents these creating unjustified barriers to trade. 

Bosnia and Herzegovina is at an early stage of preparation in the area of free movement of 
goods. No progress was made in this area. Last year’s recommendations remain valid. Major 
steps still need to be taken to align the legislative framework with the EU acquis, in particular 

70 

 
 
on technical requirements for products, conformity assessment and market surveillance.  

In the coming year, Bosnia and Herzegovina should in particular: 

  establish  a  list  of  technical  regulations  in  force  and  start  to  repeal  countrywide  the 
domestic  legislation  that  conflicts  with  the  EU  legislation,  including  ex-Yugoslav 
standards that conflict with those aligned with European standards; 

  adopt a countrywide strategy for the quality infrastructure; 

  examine all existing legislation and administrative practices in the non-harmonised area to 
assess  if  they  comply  with  Articles  34-36  of  the  Treaty  on  the  Functioning  of  the 
European Union, and start to plan how to address all non-compliant elements. 

General principles  

As  regards  the  general  principles,  the  legislative  and  institutional  framework  for  the 
production, distribution and marketing of industrial products is not in place. Bosnia and 
Herzegovina does not  have a coherent  countrywide approach, nor does it have a  strategy or 
action  plan  for  alignment  with  the  EU  acquis.  No  steps  were  taken  to  comply  with 
commitments  under  the  Stabilisation  and  Association  Agreement  (SAA)  or  to  repeal 
conflicting regulations at all levels of government. 

Non-harmonised area  

There  are  no  plans  to  ensure  that  legislation  and  administrative  practices  for  the  non-
harmonised  area  are  aligned  to  the  obligations  of  Articles  34-36  of  the  Treaty  on  the 
Functioning  of  the  European  Union  (TFEU)  and  its  relevant  case  law.  There  is  no  specific 
body established or empowered to fulfil the obligation of notifying technical regulations.  

Harmonised area: quality infrastructure  

While  the  legal  basis  and  administrative  structure  for  technical  regulations,  standards, 
conformity assessment, accreditation, metrology and market surveillance are in place, they are 
not aligned with the EU acquis and remain uneven and fragmented. The relevant institutions 
are  set  up  at  both  state  and  entity  levels,  but  the  coordination  between  them  remains  weak. 
There is still no countrywide strategy to put in place quality infrastructure, which is necessary 
for Bosnia and Herzegovina to have a coherent countrywide approach. 

On  standardisation,  the  Institute  for  Standardisation  of  Bosnia  and  Herzegovina  is  a  full 
member of the European Telecommunications Standards Institute and an affiliate member of 
the European Committee for Standardisation (CEN) and the European Committee for Electro-
technical  Standardisation  (CENELEC).  In  2021,  the  Institute  for  Standardisation  adopted  1 
981 European standards as national standards. The percentage of adopted European standards 
is  93.54%.  However,  conflicting  ex-Yugoslav  mandatory  standards  have  still  not  been 
withdrawn  in  a  systematic  manner  across  the  country,  and  there  is  still  no  countrywide 
register of the legislation in force.  

The Institute for Accreditation of Bosnia and Herzegovina is the single national accreditation 
body  and  an  associate  member  of  the  European  Cooperation  for  Accreditation  (EA).  The 
Institute  remains  understaffed.  It  made  some  progress  by  extending  the  accreditation  fields 
covered by the EA bilateral agreement to medical examinations and certification of products 
and it confirmed its status in the fields of calibration, testing and inspection.  There are 169 
conformity assessment bodies in Bosnia and Herzegovina: 86 testing laboratories, 3 medical 
and 11 calibration laboratories, 6 product  certification bodies and 63 inspection bodies.  The 
Law  on  accreditation  is  not  aligned  with  the  EU  acquis,  and  the  designation  of  conformity 
assessment bodies and procedures are still not applied consistently throughout the country.  

71 

 
 
The  Institute  of  Metrology  of  Bosnia  and  Herzegovina  participates  in  EU  technical 
committees, European development programmes and cooperation projects with EU metrology 
institutes. Metrology institutes in Bosnia and Herzegovina need to cooperate and coordinate 
their activities when implementing the legislation in this area. In 2021, the Republika Srpska 
entity  introduced  conflicting  rules  for  the  accreditation  of  laboratories,  already  accredited 
under the state-level law, undermining legal certainty and the single economic space.  

In  the  reporting  period,  the  Market  Surveillance  Agency  and  the  inspection  bodies  of  the 
entities and the Brčko District conducted 200 checks as part of proactive surveillance, and 17 
on reactive surveillance. As a result of 200 product safety inspections, 30 817 unsafe products 
were withdrawn from the market (of which 10 183 were destroyed), and businesses brought 1 
685  products  into  compliance  with  safety  requirements.  The  market  surveillance  system  is 
still  largely  based  on  mandatory  standards  and  pre-market  control.  The  Law  on  market 
surveillance is still not aligned with the EU acquis.  

Harmonised area: sectoral legislation  

On the EU ‘new and global approach to product legislation’, Bosnia and Herzegovina has 
adopted legislation designed to align with the EU acquis on electrical equipment, machinery, 
electromagnetic  compatibility,  lifts,  personal  protection  equipment,  non-automatic  weighing 
instruments and pressure equipment, as well as fertilisers. However, no further alignment in 
this sector took place over the past 10 years. The legislation is not applied across the country, 
as  the  legislative  framework  is  fragmented  and  the  Republika  Srpska  entity  implements  its 
legislation separately. 

There  is  no  countrywide  approach  to  align  with  the  EU  acquis  regarding  ‘old  approach 
product  legislation’  or  with  procedural  measures.  No  progress  was  made  on  aligning  the 
legislation with  the EU acquis  on Registration, Evaluation,  Authorisation  and Restriction  of 
Chemicals  (REACH)  or  on  strengthening  administrative  capacities  in  this  area.  On  civil 
explosives,  Bosnia  and  Herzegovina  still  lacks  a  comprehensive  legal  framework  for  the 
transport  of  dangerous  goods.  Legislation  on  returning  cultural  objects  unlawfully  removed 
from the territory of an EU Member State is not aligned with the EU acquis.  

Chapter 2 - Freedom of movements for workers 

Citizens of  one Member  State have the right to  work in  another Member State and must be 
given the same working and social conditions as other workers.  

Bosnia  and  Herzegovina  has  some  level  of  preparation  in  the  field  of  free  movement  of 
workers.  However,  limited  progress  was  made  in  the  reporting  period  and  last  year’s 
recommendations remain therefore valid. 

In the coming year, Bosnia and Herzegovina should in particular:  

  start developing a countrywide database on vacancies;  

  continue negotiating and concluding new bilateral agreements on social security, notably 

with EU Member States.  

Regarding  access  to  the  labour  market,  the  legislation  does  not  differentiate  between  EU 
workers and other third-country nationals. In order to work in Bosnia and Herzegovina, an EU 
citizen  has  to  obtain  a  work  permit  and  meet  certain  conditions,  with  several  exceptions  as 
provided  by  the  law  on  foreigners.  Employment  in  public  administration  is  reserved  for 
Bosnia  and  Herzegovina  citizens.  In  2021,  955  work  permits  were  issued  to  third-country 
nationals, of which 418 work permits were issued to EU citizens. Main sectors are processing 
industry, sales, civil construction, and services.  

72 

 
 
The laws of the entities’ and the Brčko District on the employment of foreigners still need to 
be  fully  harmonised  with  the  state-level  law  on  foreigners,  especially  when  it  comes  to 
regulating the issuance/approval of a residence permit for the purpose of work.  

Bosnia and Herzegovina still lacks a countrywide database of vacancies.  

As  regards  the  coordination  of  social  security  systems,  Bosnia  and  Herzegovina  has  10 
bilateral agreements on social security in place, of which 6 are with EU Member States, and 
another 16 agreements (of which 12 with EU Member States) are implemented on the basis of 
succession  from  the  former  Yugoslavia.  An  agreement  on  social  security  with  the  Czech 
Republic  was  signed  in  May  2021  and  ratified  in  July  2022.  The  country’s  system  of 
coordinating  social  security  schemes  remains  fragmented,  with  limited  administrative 
capacities  and  lack  of  formal  cooperation  among  relevant  authorities  covering  all  levels  of 
government. There has been no progress on the European Health Insurance Card (EHIC). 

Chapter 3 - Right of establishment and freedom to provide services 

EU natural and legal persons have the right to establish themselves in any Member State and 
to provide cross-border services. For certain regulated professions, there are rules on mutual 
recognition of qualifications. Postal services are gradually being opened up to competition. 

Bosnia  and  Herzegovina  is  at  an  early  stage  of  preparation  regarding  the  right  of 
establishment and freedom  to  provide services.  No progress was made in  this  area and last 
year’s  recommendations  remain  valid.  The  existing  legislation  needs  to  be  aligned  with  the 
EU Services Directive and  does not  provide for  the mutual  recognition  of qualifications  for 
regulated professions. A countrywide strategy for the development of postal services needs to 
be adopted to create a consistent regulatory framework that is aligned with the EU acquis.  

In the coming year, Bosnia and Herzegovina should in particular:  

  establish a monitoring mechanism to screen, check and align relevant legislation in force  
with  the  EU  Services  Directive  and  to  identify  and  remove  barriers  to  the  right  of 
establishment and freedom to provide services in the single economic space;  

  adopt  a  countrywide  law  on  postal  services,  to  further  align  the  legislation  with  the  EU 
acquis, including the Regulation on cross-border parcel delivery services, and open up the 
postal market to competition; 

  align with the EU acquis on mutual recognition of professional qualifications.  

The legislation on the right of establishment and freedom to provide cross-border services 
is not aligned with the EU acquis. In particular, no progress was made to develop a horizontal 
law  that  covers  the  principles  of  the  Services  Directive  and  no  screening  of  sector-specific 
legislation  took  place.  A  register  of  service-related  legislation  needs  to  be  established  to 
identify those laws to be amended and to further align them with the EU Services Directive. 
Also missing is a comprehensive inventory of all administrative and technical steps needed to 
register  domestic  and  foreign  companies  that  are  economically  active  countrywide.  This 
would help abolish those requirements that hamper the creation of a single economic space. 
No  point  of  single  contact  was  established.  Legislative  alignment  in  this  area  requires 
administrative capacity and strong coordination between administrative bodies at all levels of 
government. 

The legal framework for postal services is partly aligned with the EU acquis.  Further efforts 
are needed to prepare and adopt a consistent regulatory framework aligned with the EU Postal 
Services Directive, that allows for providing universal postal services across the country. The 
postal  market  needs  to  fully  open  up  to  competition.  The  institutional  and  financial 

73 

 
 
independence  as  well  as  the  administrative  capacity  of  the  Agency  for  Postal  Traffic  needs 
strengthening to perform its regulatory function. There was no progress in aligning legislation 
with the EU Regulation on cross-border parcel delivery services. There is still no state-level 
strategy to develop postal services.  

The legislation does not provide for the mutual recognition of qualifications for regulated 
professions  as required  by the EU  acquis. The  general roadmap for alignment with  the EU 
acquis  has  not  been  implemented.  Significant  efforts  are  needed  to  establish  an  adequate 
institutional  framework  that  includes  e-government  facilities  and  national  contact  points 
assisting citizens that request the recognition of their professional qualifications. Bosnia and 
Herzegovina needs to establish a list of regulated professions. 

Chapter 4: Free movement of capital 

In  the  EU,  capital  and  investments  must  be  able  to  move  without  restriction,  and  there  are 
common rules for cross-border payments. Banks and other economic operators apply certain 
rules to support the fight against money laundering and terrorist financing.  

Bosnia  and  Herzegovina  is  moderately  prepared  in  the  area  of  free  movement  of  capital.  
There was no progress in the alignment with the EU acquis on the free movement of capital. 
Last year’s recommendations were not addressed and remain valid.  

In the coming year, Bosnia and Herzegovina should in particular:   

  reduce  the  extensive  administrative  requirements  for  short-term  capital  transactions  and 
amend the legislation to comply with SAA commitments on the acquisition of real estate 
by EU citizens; 

  adopt  urgently  a  new  law  on  anti-money  laundering  and  countering  the  financing  of 
terrorism, including a register of beneficial ownership information for legal persons and a 
register of beneficial ownership information for legal arrangements. 

As  regards  capital  movements  and  payments,  the  country  continues  to  apply  full  current 
account  convertibility.  Long-term  capital  transactions  are  mostly  liberalised,  but  restrictions 
remain  for  short-term  capital  transactions,  including  financial  credits  and  loans  provided  by 
residents  to  non-residents  and  residents’  payments  of  life  insurance  premiums  to  non-
residents. Investment rules for institutional investors are subject to limitations on investment 
in foreign securities. 

The state-level law on foreign direct investments does not provide equal treatment of foreign 
and  domestic  natural  persons  for  the  acquisition  of  property.  Entity  laws  on  foreign 
investments  still  stipulate  a  cap  of  49%  of  foreign  ownership  for  companies  operating  in 
media  affairs  and  the  military  industry  unless,  in  case  of  justified  interest,  the  entity 
government issues a decision to exceed 49% of the founding capital. The restriction therefore 
remains  in  force  and  is  not  in  line  with  the  requirements  of  the  EU  acquis  on  the  free 
movement of capital, unless justified on grounds of public policy or public security.  

For the acquisition of real estate by foreign natural persons, reciprocity is required unless the 
matter  is  regulated  by  an  international  agreement.  Farmland  cannot  be  owned  by  foreign 
natural or legal persons. Bosnia and Herzegovina is late in implementing its obligations under 
the SAA, which requires the country to amend its legislation on the acquisition of real estate 
so that from 2021 EU citizens should be treated in the same manner as citizens of Bosnia and 
Herzegovina.  

There was no progress in privatising companies of strategic interest where entity governments 
retain majority shares and management rights.  

74 

 
 
The Central  Bank of  Bosnia and Herzegovina  (CBBH) operates a modern  payment system 
since introducing a new gyro clearing system in 2019. Although since mid-2020 all banks in 
the  country  have  the  required  technical  specifications  to  handle  Single  Euro  Payment  Area 
(SEPA)  payments,  Bosnia  and  Herzegovina  needs  to  adopt  legislation  to  align  with  the  EU 
acquis  (Payment  Services  Directive  II,  the  Electronic  Money  Directive  II  and  the  SEPA 
Regulation) to be able to adhere to the SEPA schemes for communities of banks or financial 
institutions outside the European Economic Area. 

Payment  services  need  to  be  further  liberalised  and  modernised  to  benefit  existing  and  new 
players on the market. The system should be open to operators other than banks.  

Bosnia  and  Herzegovina  needs  to  adopt  a  new  law  on  anti-money-laundering  and 
countering the financing of terrorism (AML/CFT) in line with international standards and 
further  align  with  the  EU  acquis  on  anti-money  laundering  and  countering  the  financing  of 
terrorism.  The new law  should in  particular cover customer due diligence requirements, the 
reporting  of  suspicious  transactions  and  the  transparency  of  beneficial  ownership.  While 
Bosnia and Herzegovina has been removed from the EU list of high-risk third countries, the 
country  should  continue  to  improve  its  AML/CFT  framework,  including  by  introducing  a 
register  of  beneficial  ownership  information  for  legal  persons  and  a  register  of  beneficial 
ownership information for legal arrangements, in line with the EU acquis.  These further steps 
should  be  taken  urgently  and  well  in  advance  of  the  next  assessment  by  the  committee  of 
experts on anti-money laundering measures and the financing of terrorism due to take place 
by 2023. 

Bosnia  and  Herzegovina  also  needs  to  improve  its  track  record  of  financial  investigations, 
prosecutions  and  convictions  for  related  offences;  make  a  more  consistent  use  of  legal 
provisions on asset confiscation; and establish an asset recovery office. Preventive measures, 
supervisory action and sanctions in case of breaches – especially in the non-financial sector – 
also still need to be implemented.  

Chapter 6 - Company law 

The  EU  has  common  rules  on  the  formation,  registration  and  disclosure  requirements  of  a 
company,  with  complementary  rules  for  accounting  and  financial  reporting,  and  statutory 
audit.  

Bosnia  and  Herzegovina  has  some  level  of  preparation  in  the  field  of  company  law, 
corporate accounting and audit. No progress can be reported in this area. Further efforts are 
needed to  align with  the EU  acquis on company law. Some steps were taken in  the area of 
electronic  registration  of  companies  in  the  Federation  entity,  however  no  central  registry  of 
businesses  was  established  to  connect  the  business  registers  across  the  country  and  ensure 
harmonisation. Further efforts are needed to align with the EU acquis on accounting and non-
financial  reporting,  while  there  is  still  no  single  countrywide  authority  for  the  oversight  of 
statutory auditors. Recommendations from last year were not addressed and remain valid. 

In the coming year, Bosnia and Herzegovina should in particular:  

  finalise  the  review  of  the  existing  legislation  in  the  area  of  company  law  to  identify   

amendments needed to complete alignment with the EU acquis;  

  improve  the  connection  and  coordination  of  business  registers  among  entities  and  the 

Brčko District;  

  review the existing legislation in the area of accounting and statutory audit to align with 

the EU acquis. 

75 

 
 
On company law, Bosnia and Herzegovina is aligned to a limited extent with the EU acquis. 
No  valid  central  registry  of  businesses  has  been  set  up,  nor  has  any  connection  been  made 
between the company registers of the entities and the Brčko District. The electronic business 
registration was established separately in the Republika Srpska entity and the Brčko District. 
The  Federation  entity  amended  its  company  law  and  law  on  the  registration  of  business 
entities  in  2021  to  simplify  the  registration  process  of  businesses,  including  electronic 
registration  and  to  establish  a  one-stop-shop  system.  Further  alignment  is  needed  with  the 
2019 EU Directive on the use of digital tools and on cross-border operations, as well as with 
rules  on  shareholder  rights,  including  the  encouragement  of  long-term  shareholder 
engagement. 

The  legislation  on  company  reporting  and  statutory  audit  remains  partially  aligned  with 
the  EU  acquis.  Bosnia  and  Herzegovina  still  needs  to  align  its  legal  framework  on  non-
financial reporting with the EU acquis. The state-level Accounting and Audit Commission of 
Bosnia  and  Herzegovina  acts  as  an  expert  body  responsible  for  accounting  and  auditing 
standards, accompanying instructions and practices. The respective laws in the entities and 
the Brčko District prescribe the use of International Financial Reporting Standards (IFRS) for 
annual and consolidated accounts of all legal entities. Although some public audit oversight 
exists within the entities, Bosnia and Herzegovina still needs to designate a single authority 
with countrywide competence that is responsible for the oversight of statutory auditors, in line 
with EU acquis requirements.  

Chapter 7 - Intellectual property law 

The EU has harmonised rules for the legal protection of intellectual property rights (IPR) and 
of  copyright  and  related  rights.  Rules  for  the  legal  protection  of  IPR  cover,  for  instance, 
patents and trademarks, designs, biotechnological inventions and pharmaceuticals. Rules for 
the legal protection of copyright and related rights cover, for instance, books, films, computer 
programmes and broadcasting. 

Bosnia and Herzegovina is moderately prepared in the area of intellectual property law. No 
progress was made in this area during the reporting period. Significant efforts are required on 
legislative  alignment  and,  in  particular,  on  improving  enforcement  and  coordination.  The 
recommendations from last year were not addressed and remain valid. 

In the coming year, Bosnia and Herzegovina should in particular: 

  implement the strategy on enforcement of intellectual property rights; 

  amend the Law on Patents; 

  increase coordination and capacities of policy-making institutions to enforce intellectual, 

industrial and commercial property rights. 

The legal framework on copyright and neighbouring rights is largely aligned with the EU 
acquis. The provisions in the area of orphan works and collective management rights need to 
be  revised  to  align  with  the  EU  acquis  in  this  area.  Copyright  works  and  related  rights  are 
deposited  and  registered  in  the  Institute  for  Intellectual  Property.  Six  organisations  in  the 
country  are  authorised  to  the  collective  management  of  copyright  and  related  rights.  An 
intellectual property strategy 2022-2026 has not yet been adopted.  

On  industrial  property  rights,  the  legislative  framework  is  partially  aligned  with  the  EU 
acquis.  Further  alignment  is  needed,  in  particular  on  patents,  trademarks  and  trade  secrets. 
Bosnia and Herzegovina has acceded to the relevant multilateral conventions, as required by 

76 

 
 
the SAA, except for the European Patent Convention, for which it still needs to adopt relevant 
amendments to the Law on Patents.  

Regarding enforcement, in the reporting period, the Indirect Taxation Authority received 113 
requests  for  customs  measures  based  on  protected  trademarks  and  issued  114  decisions  on 
temporary  detention  and  seizure  of  goods  (compared  to  69  requests  and  57  decisions  in  the 
previous  reporting  period).  The  State  Investigation  and  Protection  Agency  investigated  38 
cases of which 13 were closed.  

The  administrative  and  judicial  capacity  of  the  enforcement  institutions  is  insufficient  and 
their coordination needs to increase. The coordination body for the protection of intellectual 
property,  gathering 
levels  of 
representatives  of  enforcement  institutions 
government has been established. Bosnia and Herzegovina’s strategy on IPR enforcement has 
not  been  implemented.  The  country  still  does  not  have  a  reliable  system  for  collecting, 
analysing and exchanging data between the various enforcement institutions. Steps need to be 
taken  to  raise  the  awareness  of  businesses  and  consumers  in  preventing  counterfeiting  and 
piracy.  Prosecutors,  judges  and  court  panels  following  up  on  infringement  cases  are  not 
sufficiently specialised in IPR legislation to handle cases efficiently and consistently. 

from  all 

Chapter 8 - Competition policy 

EU rules protect free competition. They include antitrust rules against restrictive agreements 
between companies and abuse of dominant position, and also include rules on concentrations 
between  companies  which  would  significantly  impede  competition.  EU  rules  also  set  out  a 
system  of  State  aid  control.  Governments  are  only  allowed  to  grant  State  aid  if  restrictive 
conditions are met, with a view to preventing distortion of competition. 

Bosnia  and  Herzegovina  has  some  level  of  preparation  in  the  area  of  competition  policy. 
There was no progress in this area in the reporting period. Bosnia and Herzegovina took no 
steps to remove all ethnic-based decision-making procedures and vetoes from the Competition 
Council and State Aid Council, in line with the Commission Opinion’s key priorities. Bosnia 
and  Herzegovina  should  further  align  its  implementing  legislation  on  competition  and  State 
aid  with  the  EU  acquis.  Recommendations  from  last  year  were  not  addressed  and  remain 
valid. 

In the coming year, Bosnia and Herzegovina should in particular: 

  improve  the  enforcement  record  of  the  State  Aid  Council  by  ensuring  that  State  aid 

measures are notified ex-ante by granting authorities;  

  in line with SAA provisions, ensure that the State Aid Council operates independently and 
aligns  with  the  EU  acquis  the  existing  aid  schemes,  introduced  before  the  State  Aid 
Council was established. 

Antitrust and mergers 

The legislative framework on antitrust and mergers is broadly aligned with the EU  acquis. 
The  Law  on  Competition  of  Bosnia  and  Herzegovina  largely  mirrors  the  provisions  of  the 
Treaty  on  the  Functioning  of  the  European  Union  on  restrictive  agreements  and  abuse  of 
dominant position. Implementing legislation needs to be further aligned with the EU acquis.  

As  for  the  institutional  framework,  the  functioning  of  the  Competition  Council  is 
significantly  impeded  by  tight  procedural  deadlines  and  ethnic-based  decision-making 
procedures,  which  require  decisions  to  be  supported  by  at  least  one  representative  of  each 
constituent people to have legal effect.  

Regarding  enforcement  capacity,  the  Competition  Council  is  composed  of  six  members 

77 

 
 
assisted  by  20  staff.  The  staff’s  level  of  expertise  needs  to  be  further  developed  through 
relevant training.  

On  implementation,  in  2021  the  Competition  Council  took  34  decisions,  including  4  on 
prohibited  agreements,  5  on  abuse  of  dominant  position  and 3  decisions  on  both  prohibited 
agreements  and  abuse  of  dominant  position,  10 decisions  on  concentrations  and  issued  12 
expert opinions. 7 fines were imposed, amounting to EUR 260 000. The Competition Council 
should  strengthen  the  enforcement  of  competition  rules,  as  the  impact  of  competition 
enforcement  is  limited  and  fines  are  negligible  No  dawn  raids  have  been  carried  out  in  the 
reporting  period.  The  leniency  programme  for  companies  providing  information  on  cartel 
cases has never been used. The judiciary’s capacity to handle complex competition cases has 
improved with an increase in the number of assessed cases, the capacity however needs to be 
further reinforced.  In advocacy, the Competition  Council should have the power to  conduct 
market studies to gain a better understanding of competition in key sectors, detect sources of 
competition problems and identify solutions.  

State aid 

The  legislative  framework  on  State  aid,  including  the  Law  on  the  State  Aid  System,  is 
partially aligned with the EU acquis and SAA provisions. The implementing legislation is not 
developed evenly across the country and needs to be aligned with the EU acquis. A regional 
aid map has not yet been drawn up.  

As for the  institutional  framework, the State Aid  Council is  responsible  for the  consistent 
implementation  of  the  State  aid  law.  It  is  composed  of  eight  members  appointed  by  the 
Council of Ministers and the governments of the entities and the Brčko District. As in the case 
of the Competition Council, the functioning of the State Aid Council is significantly impeded 
by  ethnic-based  decision-making  procedures,  which  require  decisions  to  be  supported  by  at 
least  one  representative  of  each  constituent  people  to  have  legal  effect.  The  mandate  of  the 
members  of  the  State  Aid  Council  from  the  Republika  Srpska  entity  expired  in  2020,  and 
those from the Federation entity and the state level in 2021. No actions have been undertaken 
by the relevant authorities to appoint new members.   

The  enforcement  capacity  of  the  State  Aid  Council  is  insufficient.  With  only  six  staff 
members, its secretariat is not in a position to fulfil its tasks. Furthermore, its capacity needs 
to be developed through relevant training.  

On  implementation,  the  State  Aid  Council  issued  only  two  (positive)  decisions  over  the 
reporting period. A vast majority of State aid measures are put in place by granting authorities 
without  notification  and  prior  approval  by  the  State  Aid  Council.  All  existing  State  aid 
schemes  still  have  to  be  aligned  with  EU  State  aid  rules  and  SAA  provisions.  Bosnia  and 
Herzegovina needs to ensure transparency of all State aid measures.  

Liberalisation  

Concerning  liberalisation,  the  Law  on  Competition  and  the  Law  on  the  State  aid  system 
apply to public undertakings and undertakings with special or exclusive rights. The rules on 
financing services of general economic interest are not fully aligned with the EU acquis. 

Chapter 9 - Financial services 

EU  rules  aim  to  ensure  fair  competition  and  the  stability  of  financial  institutions,  namely 
banking, insurance, supplementary pensions, investment services and securities markets. They 
include rules on the authorisation, operation and supervision of these institutions.   

78 

 
 
Bosnia and Herzegovina has some level of preparation / is moderately prepared in the area 
of financial  services.  There was  no progress in  implementing last  year’s recommendations. 
Further steps are needed to significantly improve coordination in supervision and enforcement 
within the sector. The overall level of preparedness in the securities market remains low. Last 
year’s recommendations remain largely valid.  

In the coming year, Bosnia and Herzegovina should in particular: 

  sign a financial stability memorandum of understanding; 

  strengthen the bank resolution framework by amending the entities’ banking laws and the 

law on deposit insurance to enable the creation of a financial stability fund   

  demonstrate  improvements  in  the  coordination  between  corrective  and  enforcement 

powers of supervisory bodies (including banking agencies).    

As  regards  banks  and  financial  conglomerates,  the  banking  sector  appears  adequately 
capitalised and liquid. The overall capital adequacy ratio was 18.6% at the end of June 2022, 
well above the regulatory minimum of 12%. However, the fragmented market remains a drag 
on banks’ moderate profitability. Strategies on  fully implementing Basel  III  are in  place.  In 
October 2021, the Commission decided to consider the supervisory and regulatory framework 
for credit institutions in the country as equivalent to that applied in the EU for the purposes of 
the Capital Requirements Regulation. 

Banking agencies coordinated their response to support the financial sector and the economy 
in general during the pandemic, including through a moratorium on debt repayments, possible 
loan  restructrurings  and  other  regulatory  measures.  The  agencies  also  suspended  dividends 
and  limited  remuneration  in  the  banking  sector.  These  measures  helped  ensure  financial 
stability, although the take-up of relief measures was not  as high as expected. The agencies 
decided to abolish all temporary relief measures from April 2022. Financial stability will have 
to  be  closely  monitored,  including  through  more  frequent  meetings  of  the  Standing 
Committee  for  Financial  Stability  which  brings  together  the  central  bank,  the  ministries  of 
finance  at  state-  and  entity-level,  the  entity  banking  agencies  and  the  deposit  insurance 
agency.  

The  announced  sanctions  against  the  Russian  financial  sector  triggered  bank  runs  in  March 
2022  on  two Sberbank  subsidiaries  which  together  represent  some  8%  of  total  assets  of the 
banking  sector.  The  two  entity  banking  agencies  reacted  swiftly  by  taking  over  the 
management  of  these  institutions  and  initiating  the  bank  resolution  mechanism,  resulting  in 
the sale of both banks. 

Despite these successes, fragmentation of the institutional and regulatory set-up continues to 
impede banking supervision. The Standing Committee for Financial Stability met only once 
during the reporting period (at the time of the bank runs) and only twice since the beginning 
of COVID-19 pandemic, raising concerns about  the coordination and  regularity of financial 
stability monitoring. To ensure financial stability, Bosnia and Herzegovina needs to improve 
cooperation among the two entities’ banking agencies, central bank, deposit insurance agency 
and relevant ministries (a memorandum of understanding to that end still needs to be signed), 
and to adopt a common methodology to determine systematically important banks.  

The deposit insurance scheme is operational, but the amount of insured deposits is not in line 
with  the  requirements  of  the  EU  acquis.  While  the  implementation  of  the  law  on  deposit 
insurance  enhances  the  bank  resolution  framework,  this  framework  should  be  further 
strengthened in order to enable the establishment of a single financial stability fund that could 
enable  bank  restructuring  and  provide  sufficient  liquidity.  This  is  a  major  deficiency  as, 

79 

 
 
without such a fund, the financial sector safety net remains inadequately prepared to deal with 
a  potential  bank  failure  which,  unlike  the  case  of  the  Sberbank  subsidiaries  in  March  2022, 
might not be quickly resolved through change of ownership. 

Continued  implementation  of  the  methodology  for  the  supervisory  review  and  evaluation 
process (SREP) enabled identifying risks and corrective measures for individual banks. To be 
complete,  the  legal  framework  must  notably  strengthen  supervisors’  corrective  and 
enforcement  powers  and  introduce  consolidated  supervision  of  banking  groups  across  the 
entities.  

The  ratio  of  non-performing  loans  declined  to  5.2%  of  the  outstanding  loan  portfolio  at  the 
end  of  H1  2022.  Nevertheless,  institutional  and  legal  obstacles  to  swift  and  effective 
resolution need to be reduced.  

Regarding Insurance and Occupational Pensions, no progress was made in alignment and 
harmonisation of the legislation on compulsory vehicle insurance after adoption of the entity 
laws in 2020, which created conditions for the liberalisation of the insurance market in Bosnia 
and Herzegovina. 

No  progress  was  made  in  preparing  for  the  transition  to  a  Solvency  II-based  regulatory 
framework nor on voluntary pensions.  

Alignment  with  the  acquis  governing  financial  supervision  of  institutions  for  occupational 
retirement provision remains to be addressed.  

No progress was made in terms of financial market infrastructure. Legislation is not in line 
with the EU acquis, including the Settlement Finality Directive. 

The  regulatory  framework  for  securities  markets  and  investment  services  is  under  the 
entities’  competences.  Both  entities  have  a  securities  market  regulator  (the  Securities 
Commissions) and a dedicated, though not harmonised legal framework on securities market 
and  investment  funds.  Coordination  between  the  entities  needs  to  be  improved  to  ensure 
consistent  alignment  with  key  areas  of  the  EU  securities  market  acquis,  such  as  market 
manipulation  and  market  abuse  rules.  Members  of  the  Securities  Commission  of  the 
Federation entity were appointed only in September 2021 after nearly two years during which 
all  requests  for  capital  increase,  mergers  and  acquisitions  came  to  a  halt,  creating  serious 
problems for businesses and the capital market.  

In  July  2021  and  February  2022,  the  Republika  Srpska  entity  amended  the  law  on  the 
securities  market  to  simplify  the  issuance  of  debt  securities  and  further  develop  brokering 
activities.  In  July  2022,  the  Republika  Srpska  entity  also  amended  the  law  on  securities 
markets to regulate crypto currencies and custodian wallet providers, contributing to the fight 
against money laundering and terrorism financing involving those currencies. 

Chapter 28 - Consumer and health protection  

EU rules protect consumers’ economic interests and in relation to product safety, dangerous 
imitations and liability for defective products. The EU also ensures high common standards 
for tobacco control, blood, tissues, cells and organs, and medicines for human and veterinary 
use.  The  EU  also  ensures  high  common  standards  for  upholding  patients’  rights  in  cross-
border healthcare and tackling serious cross-border health threats  including  communicable 
diseases. 

Bosnia and Herzegovina is at an early stage of preparation in the field of consumer protection 
and public health. No progress was made in the area during the reporting period; last year’s 
recommendations  were  not  implemented and remain valid. The legislation on serious cross-

80 

 
 
border health threats including communicable diseases is not yet aligned with the EU acquis 
at all levels of government. 

 In the coming year, Bosnia and Herzegovina should in particular:  

  adopt  legislation  at  all  levels  prohibiting  smoking  in  public  places  in  line  with  the  EU 
acquis and ratify the protocol to eliminate illicit trade in tobacco, and start to enforce both 
measures;  

  further  align  its  legislation  with  the  EU  acquis  on  substances  of  human  origin,  and  on 
medicines  for  human  use  and  establish  an  oversight  system  in  this  field  with  a  view  to 
ensuring efficient coordination in the whole country; 

  further align the state-level law on consumer protection with the EU acquis. 

Consumer protection 

On horizontal aspects, the legal framework for consumer protection is still enshrined in the 
2006 state-level law on consumer protection. This law needs urgent and extensive revision to 
ensure  alignment  with  the  significant  developments  in  the  EU  acquis  to  address  rapidly 
changing  digital  markets,  and  to  address  the  risk  of  unequal  protection  of  consumers  in  the 
entities due to legislative fragmentation across the country. 

The  Ombudsman’s  office  for  consumer  protection  issued  decisions  in  444  consumer 
complaints (249 during the previous reporting period), particularly in the area of services of 
general economic interest, e.g. telecommunications and commercial sector, and provided 400 
pieces of legal advice (365 during the previous reporting period). 

The  legal  framework  in  the  area  of  consumer  credit  and  distance  marketing  of  financial 
services is not aligned with the EU acquis. 

The  legal  framework  for  product  safety  is  not  yet  aligned  with  the  EU  acquis.  Over  the 
reporting period, the Market Surveillance Agency and the inspection bodies of the entities and 
the  Brčko  District  implemented  200  checks  as  part  of  proactive  surveillance,  and  17  were 
initiated on reactive surveillance. As a result of 200 product safety inspections, 30 817 unsafe 
products were withdrawn from the market (of which 10 183 were destroyed), and businesses 
brought 1 685 products into compliance with safety requirements.  

Public health 

On horizontal aspects, no progress was made in drafting a health strategy at the state level 
or  in  the  Brčko  District.  There  is  no  state-level  health  information  strategy  or  integrated 
health information system.  

Legislation on  tobacco  control  policies at  the level  of the entities  and the Brčko District  is 
not  aligned  with  the  relevant  EU  acquis.  The  Federation  entity  adopted  a  law  on  tobacco 
control in April 2022 regulating the use, advertising, flavouring and packaging of tobacco and 
other smoking products. However, this law includes extensive exceptions, so is likely to have 
a  limited  impact,  including  on  indoor  smoking  in  public  and  commercial  areas.  Bosnia  and 
Herzegovina  is  a  party  to  the  WHO  Framework  Convention  on  tobacco  control,  but  it  does 
not  convention  fully  implemented  it  due  to  a  lack  of  systematic  monitoring.  Bosnia  and 
Herzegovina has still not ratified the protocol to eliminate illicit trade in tobacco products.  

The legal framework regulating the areas of blood, tissues, cells and organs, at the level of 
the entities and the Brčko District is not yet aligned with the EU acquis. The legal framework 
on biomedically assisted fertilization is fragmented so it cannot be evaluated as aligned with 
the  EU  acquis  across  the  country.    The  country  does  not  have  the  necessary  administrative 

81 

 
 
capacities to fulfil the requirements laid down in the EU acquis on human organ, tissue and 
cell  transplantation.  The  entities  have  established  institutes  for  transfusion  medicine. 
Transplantation  programmes  are  organised  at  entity  level  with  very  limited  cooperation 
between them, and there not been any progress in setting up a state-level oversight system in 
order to ensure efficient coordination in the whole country. 

On serious  cross-border health threats,  including  communicable diseases, the legislation 
has  not  yet  been  aligned  with  the  EU  acquis  at  all  levels  of  government.  Bosnia  and 
Herzegovina’s  participation  in  the  technical  activities  of  the  European  Centre  for  Disease 
Control  and  Prevention  (ECDC)  remains  limited  and  it  has  not  yet  taken  part  in  the  ECDC 
assessment  on  the  status  of  communicable  diseases.  Bosnia  and  Herzegovina  needs  to 
strengthen  coordination  between  the  entities  and  the  state  level  on  communicable  disease 
surveillance  and  response.  Measures  to  promote  healthy  lifestyles  in  connection  with  the 
prevention  of  non-communicable  diseases  are  regulated  and  partially  implemented  by  the 
competent institutions of the entities and the Brčko District. 

COVID-19 mitigation measures  were not well coordinated throughout the country and were 
also not lifted in a coordinated manner. Bosnia and Herzegovina also continued to use the EU 
joint  procurement  agreement  for  medical  counter-measures.  By  June  2022,  Bosnia  and 
Herzegovina had received over 2.2 million COVID-19 vaccine doses provided by the EU, and 
over 300 000 via COVAX. Bosnia and Herzegovina remains among the European countries 
with  the  lowest  vaccination  levels  (25.3%  of  the  population)  and  with  the  highest  mortality 
rate (4 878 per million). Bosnia and Herzegovina did not establish a countrywide certificate, 
interoperable  with  the  EU  Digital  COVID-19  Certificate  system  (EU  DCC).  The  country 
lifted all containment measures and entry restrictions in May 2022. 

On cancer screening, Bosnia and Herzegovina still has no countrywide cancer control plan, 
or  a  countrywide  early  detection  programme,  and  the  Federation  entity  has  no  systematic 
cancer registers or screening programmes for the treatment of cancer, due to legislative issues 
and  limited  financial  capacity.  Both  entities  have  cancer  registers.  The  Republika  Srpska 
entity has an early detection programme in place. The Brčko District has no register or early 
detection programmes. 

Bosnia  and  Herzegovina  has  74  community-based  mental  health  centres  with  multi-
disciplinary teams and some of them have additional specialists. A special forensic psychiatric 
hospital provides treatment to forensic patients from across the country. 

On preventive measures, some activities to reduce alcoholism and prevention of alcohol-
induced disorders were carried out with the participation of NGOs. Drug abuse prevention 
and  harm  reduction,  preventative  measures  are  not  systematic,  though  some  are 
implemented  through  education  and  NGO  activities.  There  is  no  systematic  approach  to 
rehabilitation  and  social  reintegration,  and  programmes  have  been  introduced  on  this 
unequally in different parts of the country. 

On  health  inequalities,  accessibility  for  all  citizens  remains  a  key  health  care  system 
challenge,  despite  the  legislation  stipulating  that  equal  access  to  health  should  be  in  place. 
Ensuring  good  quality  accessible  public  health  care  for  all,  including  marginalised  groups, 
remains  an  issue  and  is  Bosnia  and  Herzegovina’s  key  reform  priorities.  Roma  only  have 
access  to  healthcare  services  if  they  are  registered  at  the  employment  or  education 
administrations which means that many Roma lack health insurance. During the declared state 
of  emergency  /  natural  disaster,  all  levels  of  government  passed  measures  on  temporary 
universal health protection coverage with regard to COVID-19. Primary health care during the 
pandemic  suffered  from  an  outdated  health  care  system,  lack  of  doctors  and  medical  staff, 
lack of strategic response and crisis management, and lack of coordination. Obstacles to the 

82 

 
 
mobility of patients between different entities or cantons persist and illustrate the complexity 
and inefficiency of the system; this is to be improved and harmonised with the EU acquis. 

Women  and  girls  were  disproportionally  affected  by  the  COVID-19  pandemic,  most 
particularly  by  being  on  the  frontlines  of  the  pandemic  and  through  loss  of  jobs  in  care, 
hospitality  and  services.  Authorities  need  to  ensure  inclusion  of  a  gender  perspective  in 
planning and implementation of relief and recovery measures aimed at addressing the impact 
of  the  COVID-19  pandemic.  Furthermore,  the  pandemic  highlighted  issues  with  access  of 
women  to  medical  facilities  for  regular  prenatal  examinations  and  increased  morbidity  and 
mortality related to pregnancy and childbirth complications. Bosnia and Herzegovina needs to 
improve  conditions  in  hospitals  and  maternity  hospitals  and  ban  obstetric  violence,  in  line 
with its obligations under the Istanbul Convention. 

The state-level Agency for Medicines and Medical Devices (ALMBiH) is the regulatory body 
in charge, inter alia, to secure the functional, coordinated and uniform system for regulation of 
medications  and  medical  devices,  supervise  a  single  market  for  these  products,  and  ensure 
their availability on the entire territory of a country. In December 2021, the Republika Srpska 
entity adopted a Law on Pharmaceuticals and Medical Devices that foresees the establishment 
of  an  entity-level  agency  with  the  same  competences  and  responsibilities  as  ALMBiH, 
violating  the  constitutional  and  legal  order.  The  law  came  into  force  in  late  June,  and  the 
Constitutional Court suspended its application in July 2022. No steps have been taken so far 
to set up such entity-level agency. If implemented, Bosnia and Herzegovina would backslide 
in its alignment with the EU acquis and not respect its obligations under the SAA.   

CLUSTER 3: COMPETITIVENESS AND INCLUSIVE GROWTH  

The cluster covers chapters 10- digital transformation and media, 16- taxation, 17- economic 
and monetary policy, 19- social policy and employment, 20- enterprise and industrial policy, 
25- science and research, 26- education and culture, 29- customs union.  

Bosnia  and  Herzegovina  needs  to  develop  and  adopt  laws  electronic  communications  and 
electronic media, and on electronic identity and trust services, in line with the EU acquis, and 
pursue the digital switchover. On taxation, it should bring VAT and excise duties on beer in 
line with the EU acquis and ensure the interoperability of e-signature. On monetary policy, it 
should  guarantee  the  independence  of  the  central  bank  and  appoint  the  members  of  its 
governing board without delay and ensure the integrity of the currency board. It should ensure 
consistent political  support for and high visibility, countrywide ownership and coherence of 
the  Economic  Reform  Programme  as  the  vehicle  to  coordinate  macroeconomic  and  fiscal 
policies. On social policy, it should adopt employment strategies, develop a Youth Guarantee 
implementation  plan  and  enhance  social  dialogue.  On  enterprise  and  industrial  policy,  it 
should simplify and harmonise business registration, ensure coordination of industrial policy 
strategies at the various levels of government and adopt guidelines to harmonise support for 
SMEs and entrepreneurs on the basis of needs. It should ensure a fully functional system of 
(re-)accreditation  of  higher  education  institutions  and  study  programmes,  and  continued 
participation  in  international  assessment  studies.  It  should  reinforce  the  capacity  of  the 
Indirect  Taxation  Authority  and  increase  risk-based  post-clearance  controls,  expand 
simplified customs procedures for trusted economic operators and upgrade interconnectivity 
and interoperability with EU IT systems and requirements. 

Chapter 10 - Digital transformation and media 

for  electronic 
The  EU  supports 
communications, electronic commerce and audio-visual services. The rules protect consumers 
and support universal availability of modern services.  

internal  market 

functioning  of 

the  smooth 

the 

83 

 
 
Bosnia  and  Herzegovina  is  at  an  early  stage  of  preparations  in  the  area  of  digital 
transformation  and  media.  No  progress  was  achieved  in  implementing  last  year’s 
recommendations,  which  remain  valid.  The  legislation  and  strategic  framework  are  not  in 
place and not aligned with the EU acquis. The country still needs to introduce the European 
emergency  number  112.  The  Regional  Roaming  Agreement,  enabling  ‘roam  like  at  home’ 
(RLAH),  was  successfully  implemented.  Last  year’s  recommendations  have  not  be 
implemented and remain valid. 

In the coming year, Bosnia and Herzegovina should in particular: 

  develop and adopt a law on electronic communications and electronic media in line with 

the EU acquis;  

  complete phase two of the digital switchover and adopt a framework strategy for access to 

the broadband network; 

  develop and adopt a law on electronic identity and trust services for electronic transactions 

with a single supervisory body for the whole country in line with the EU acquis. 

Regarding  electronic  communications  and  information  and  communication  technology, 
the  country  has  still  made  no  progress  in  adopting  the  legislation  related  to  electronic 
communications  and  electronic  media  in  line  with  the  2018  EU  regulatory  framework  nor 
made  progress  in  aligning  with  the  EU  Broadband  Cost  Reduction  Directive.  Bosnia  and 
Herzegovina  has  not  developed  a  broadband  strategy,  even  though  it  introduced  the  4G 
network in 2019. The Communications Regulatory Agency still lacks financial independence 
and no efforts were made to improve the procedure for appointing its management to ensure 
full political independence.  

In  2021,  there  were  60  internet  providers,  792  782  broadband  subscribers  and  3  394  184 
internet  users  (96.12  %  penetration  rate),  with  a  penetration  rate  of  22.60  %  for  broadband 
internet. The Regional Roaming Agreement enabling ‘roam like at home’ entered into force in 
July 2021, leading to a further decrease of the price of roaming services and to a significant 
increase in traffic, primarily in mobile data traffic. On 28 July 2022, the Council of Ministers 
endorsed  the  Declaration  for  the  Future  of  Internet,  a  global  initiative  signed  by  over  60 
international partners to date, which sets out the vision and principles of a trusted internet. 

Regarding  information  society  services,  Bosnia  and  Herzegovina  made  no  progress  in 
adopting a countrywide strategy and action plan for development of the information society. 
No progress was made in the adoption of the law on electronic identity and trust services for 
electronic transactions with a single supervisory body for the whole country in line with the 
EU acquis. Also, no progress has been made in ensuring the interoperability of the electronic 
signature system  throughout  the country. One company  and two state-level  institutions now 
offer e-signature services. 

Bosnia  and  Herzegovina  does  not  have  a  comprehensive  legislative  framework  (a  law  on 
information  security  is  in  place  only  in  the  Republika  Srpska  entity)  on  the  security  of 
networks and information systems and made no progress in adopting a countrywide strategy. 
Moreover, the country made no progress in designating a countrywide single point of contact 
responsible for coordination and cross-border cooperation. Bosnia and Herzegovina needs to 
establish  a  network  of  computer  security  incident  response  team  (CSIRT)  to  facilitate 
strategic  cooperation  and  the  exchange  of  information  (a  CSIRT  is  operational  only  at  the 
Ministry of Defence and in the Republika Srpska entity).  

As regards audio-visual policy, Bosnia and Herzegovina made no progress in developing and 
adopting a law on electronic communications and electronic media in compliance with the EU 

84 

 
 
 
acquis  and  to  harmonise  entity  legislation  with  the  state-level  law  on  public  broadcasting 
system. No progress has been made in adopting legislation on media ownership transparency, 
including a register of ownership structures, as well as legislation on advertising in the media. 
The  country  needs  to  complete  the  second  phase  of  the  digital  switchover.  Bosnia  and 
Herzegovina has failed to introduce a suitable model to collect  broadcasting fees that would 
ensure  the  public  broadcasting  system’s  financial  sustainability  and  political  independence. 
The Public Services Broadcasting Corporation, as prescribed by the respective law, is still not 
established. The financing of local public broadcasters from the public budget also needs to be 
brought in line with the EU acquis, as it constitutes State aid and provides opportunities for 
political pressure and influence. (see also Chapter 23 – Freedom of expression)  

Chapter 16 - Taxation  

EU  taxation  rules  cover  value-added  tax,  excise  duties  and  certain  aspects  of  corporate 
taxation.  They  also  deal  with  cooperation  between  tax  administrations,  including  the 
exchange of information to prevent tax evasion. 

Bosnia and Herzegovina has some level of preparation in the area of taxation. No progress 
was made in implementing the recommendations from last year which therefore remain valid.  

In the coming year, Bosnia and Herzegovina should in particular:  

  bring the legislation on VAT and on excise duties in line with the EU acquis, notably on 

excise duties on beer; 

  eliminate  all  administrative  burdens  in  the  area  of  electronic  signature  (e-signature)  in 

order to ensure its interoperability and a harmonised countrywide system. 

The legislative framework for indirect taxation is partially aligned with the EU acquis. The 
country needs to further align VAT legislation with the EU  acquis and improve cooperation 
between the Indirect Taxation Authority and the tax administrations of the entities and Brčko 
District, including through joint audits. Its ability to fulfil its vital countrywide role must be 
maintained. 

As regards excise duties on tobacco, alcohol and energy, there are considerable discrepancies 
with  the  EU  acquis  on  the  scope  and  classification  of  the  excisable  goods  as  well  as 
exemptions, structures and minimum rates. The country needs to align its law on excise tax 
fully with the EU acquis.  

On  direct  taxation,  in  December  2021,  the  Republika  Srpska  entity  amended  the  laws  on 
personal income tax, the law on social contributions and the labour law to change the tax base 
to gross (as opposed to net) wages, increase the personal income tax deduction, decrease the 
tax  rate  from  10%  to  8%  and  reduce  the  overall  rate  of  social  contributions  from  32.8%  to 
31%.  There  was  no  progress  in  the  field  of  direct  taxation  in  the  Federation  entity  as  new 
legislation  on  income  tax  and  social  contributions  to  reduce  the  tax  burden  on  labour  and 
increase take-home pay remain to be adopted. The tax and social contribution regimes in the 
two  entities  have  therefore  continued  to  diverge,  hindering  progress  towards  a  single 
economic space. 

On administrative cooperation and mutual assistance, Bosnia and Herzegovina has ratified 
the OECD/Council of Europe convention on mutual administrative assistance in tax matters. 
The country has not  yet  committed to automatically exchange financial account information 
based  on  the  OECD  single  global  standard.  Bosnia  and  Herzegovina  has  signed  double 
taxation agreements with 20 EU Member States. 

Concerning  operational  capacity  and  computerisation,  the  electronic  submission  of  VAT 

85 

 
 
and  excise  duties  declarations  is  in  place.  However,  coordination,  cooperation  and  data 
exchange  among  the  country’s  different  tax  administrations  need  to  be  further  improved, 
including  the  countrywide  harmonisation  and  interoperability  of  the  e-signature.  The 
administrative  capacity  and  staffing  levels  of  the  Indirect  Taxation  Agency  should  be 
substantially strengthened, especially in key operational posts. 

Chapter 17 - Economic and monetary policy 

EU rules require the independence of central banks and prohibit them from directly financing 
the public sector. Member States coordinate their economic policies and are subject to fiscal, 
economic and financial surveillance.   

Bosnia and Herzegovina is at an early stage of preparation on economic and monetary policy. 
There was backsliding in this area due to the failure to appoint a new governing board of the 
central  bank  and  regarding  cooperation  and  coordination  of  macroeconomic  and  fiscal 
policies as evidenced in particular by the difficulties involved in the preparation and execution 
of the Economic Reform Programme. Monetary policy underpins economic stability, but full 
independence  of  the  central  bank  remains  to  be  ensured.  The  2021  recommendations  were 
implemented only to a limited extent and remain valid.  

In the coming year, Bosnia and Herzegovina should in particular: 

  maintain  the  independence  of  the  central  bank  and  the  integrity  of  the  currency  board 
arrangement and appoint the members of the governing board of the central bank without 
any further delay.  

  enhance  cooperation  and  coordination  on  socio-economic  reforms  among  the  different 
levels  of  the  government  and  strengthen  the  analytical  capacities  of  governmental 
institutions, in particular of the state-level Ministry of Finance and Treasury. 

  ensure  consistent  political  support  for  and  high  visibility,  countrywide  ownership  and 
coherence of the Economic Reform Programme (ERP), including its medium-term macro-
fiscal  framework;  enhance  administrative  capacity  to  design,  implement  and  monitor 
reforms; 

As  regards  monetary  policy,  the  exchange  rate  regime  continues  to  be  characterised  by  a 
currency board arrangement, which links the convertible mark (KM) to the euro as the anchor 
currency. This provides stability within the country’s complex institutional environment. The 
central bank's objective of keeping the domestic currency stable remains in contrast with the 
primary  objective  of  monetary  policy  in  the  EU,  which  is  price  stability.  The  Law  on  the 
Central Bank is not fully aligned with the EU acquis as regards the prohibition of monetary 
financing.  

The  Law  on  the  Central  Bank  does  not  ensure  the  bank’s  unconditional  functional 
independence.  The  central  bank  is  required  to  report  to  the  Parliamentary  Assembly  on  its 
audited annual financial statements and to the Presidency on the preliminary financial reports. 
This  latter  requirement  could  impinge  on  the  central  bank’s  independence.  Legislative 
provisions  governing  the  removal  of  the  Governing  Board  members  and  the  duration  of 
appointment of replacement members still need to be fully aligned with the EU acquis.  

In  August  2021, the mandate of the  governing board expired, and  the Presidency of  Bosnia 
and  Herzegovina  failed  to  appoint  a  new  one  due  to  the  blockage  of  state-level  decision-
making  by  the  representatives  from  the  Republika  Srpska  entity.  On  the  last  day  of  its 
mandate,  the  governing  board  adopted  the  decision  to  apply  the  principle  of  continuity  to 
enable the undisturbed performance of core tasks and functions of the central bank until the 

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Presidency  appoints  new  members  of  the  governing  board.  The  circumstances  of  the 
appointments  in  2020  of  now-acting  members  of  the  board  (following  a  change  in  the 
composition  of  the  Presidency)  and  previous  dismissals,  as  well  as  the  failure  to  appoint  a 
new board after the expiry of the previous mandate raise concerns about the vulnerability of 
the  central  bank  to  political  interference.  In  addition,  certain  political  leaders  repeatedly 
proposed  to  use  the  central  bank  reserves  for  fiscal  purposes,  which  would  undermine  the 
currency board arrangement. Therefore, a continued focus on preserving the integrity of the 
currency  board  arrangement  and  the  independence  of  the  central  bank  in  line  with  the  EU 
acquis is crucial.  

Banking  supervision  powers  lie  with  the  two  entities’  banking  agencies.  While  the  banking 
system weathered the pandemic shock relatively well, banking sector supervision is impeded 
by fragmented competences and insufficient cooperation and information sharing.  

Concerning  the  budgetary  framework,  the  reporting  of  public  sector  data  in  line  with  the 
European  System  of  National  and  Regional  Accounts  (ESA  2010)  improved  with  further 
work  done  to  participate  in  the  fiscal  notification  exercise.  However,  due  to  the  country’s 
fragmented institutional setup and limited cooperation between different authorities involved, 
general  government  fiscal  data  is  published  only  with  long  delays.  The  alignment  of  the 
underlying  statistical  framework  with  ESA  2010  requirements  and  definitions  is  also  still 
limited.  The  Central  Bank  has  started  to  publish  national  forecasts,  in  addition  to  those 
already published by the Directorate for Economic Planning, albeit with a stronger focus on 
monetary  issues.  Fiscal  rules  remain  at  entity  level  and  there  is  still  no  independent  fiscal 
institution to monitor and enforce compliance with country-wide fiscal rules. The adoption of 
the medium-term budgetary framework was delayed by the blockage of state-level institutions 
by the representatives from the Republika Srpska entity, diminishing its role as the basis for 
budgetary planning. The overall framework remains insufficiently developed, often missing, 
for example, budgetary impact estimations of policy decisions. Furthermore, it is underused as 
a policy-guiding instrument. 

Regarding  the  EU  acquis  on  economic  policy,  the  overall  quality  of  Bosnia  and 
Herzegovina's medium-term Economic Reform Programme (ERP) did not improve this year 
and was submitted with a two-month delay. The Council of Ministers failed to empower the 
Directorate for Economic Planning to effectively coordinate the preparation of the programme 
due  to  the  blockage  of  state-level  decision-making  by  representatives  from  the  Republika 
Srpska  entity,  a  step  backward  from  last  year.  The  delay  in  the  adoption  of  the  state-level 
budget also had a negative impact on the preparation of the ERP. All of this points to long-
standing  and  significant  weaknesses  in  administrative  cooperation  and  policy  formulation. 
The  policy  guidance  jointly  agreed  at  the  July  2021  Economic  and  Financial  Dialogue 
between  the  EU  and  the  Western  Balkans  and  Türkiye  was  implemented  only  to  a  limited 
extent.  Capacities  to  design,  implement  and  monitor  structural  reforms  need  to  be 
significantly  enhanced  to  meet  the  requirements  of  the  European  Semester.  This  means 
establishing a country-wide medium-term reform programme that is coherent, consistent and 
based on a jointly agreed prioritisation. In that vein, the coordination role of the Directorate 
for Economic Planning should be strengthened, including by providing it with the necessary 
resources. 

Chapter 19 - Social policy and employment  

EU rules in the social field include minimum standards for labour law, equality, health and 
safety at work and non-discrimination. They also promote social dialogue at European level. 

Bosnia  and  Herzegovina  has  some  level  of  preparation  in  the  field  of  social  policy  and 
employment.  There  was  limited  progress  in  the  area.  Serious  challenges  remain  to  be 

87 

 
 
addressed  as  regards  employment,  social  inclusion  and  protection,  and  poverty  reduction, 
especially related to coordination among the responsible institutions across the country. Steps 
were taken to strengthen and promote social dialogue, which should be further improved at all 
level  of  governments,  and  lead  to  the  conclusion  of  collective  agreements.  Last  year’s 
recommendations were not addressed and remain valid. 

In the coming year, Bosnia and Herzegovina should in particular: 

  develop  and  adopt  entity-level  and  countrywide  employment  strategies  as  a  policy 
framework, while providing for additional capacities for implementation and monitoring; 

  develop a Youth Guarantee Implementation Plan in line with the EU model and guidance; 

  introduce a uniform minimum level of maternity leave benefits and protection throughout 
the  country,  starting  by  harmonising  the  definitions  of  maternity,  paternity  and  parental 
leave. 

The  labour  laws,  in  place  at  the  level  of  the  entities  and  Brčko  District,  apply  to  all 
employees, except  civil servants,  and guarantee a minimum level  of protection  of employee 
rights. In order to fully meet EU standards, the legal framework requires further improvement, 
notably as concerns the protection of workers from discrimination. 

The right to strike is regulated by the entity-level labour laws and by the laws on striking that 
are  in  place  at  all  levels  of  the  government.  Implementation  of  the  labour  laws  remains 
inadequate,  especially  when  it  comes  to  social  dialogue,  protection  for  workers  and  the 
enforcement of labour inspection.  

No  initiative  was  taken  to  amend  the  labour  laws  to  address  deficiencies  related  to  crisis 
management, as exposed during the COVID-19 pandemic  

Laws  on  health  and  safety  at  work  are  in  place  in  the  entities  and  the  Brčko  District. 
Following adoption of new occupational safety and health law in the Federation entity, new 
bylaws  are  regulating,  inter  alia,  risk  assessment,  licencing  of  authorised  entities  and 
performance  of  periodical  review  in  the  area  of  occupational  safety  and  health.  The  bylaws 
regulating  specific  aspects  of  occupational  safety  and  health  still  need  to  be  adopted  and 
harmonised with the EU acquis throughout the country.  

Enforcement  and implementation  of legislation  remains partial,  especially  when it  comes to 
inspection capacities, control over proper prevention of injuries at work, investment in safety 
and relevant  training for employers or  assistance to  conduct  a proper risk assessment in  the 
workplace.  The  system  of  collection  and  dissemination  of  statistical  data  on  work-related 
injuries  and  diseases  still  needs  to  be  improved.  Official  data  on  reported  accidents  and 
fatalities, along with most affected sectors, were not published for 2021.  In December 2021, 
the Republika Srpska entity adopted its 2021-2024 strategy on occupational health and safety.  

Social dialogue remains weak at all levels and no significant improvements have been made. 
The  involvement  of  social  partners  in  the  implementation  of  policies  is  limited  and  their 
internal capacities require improvements. In November 2021 the Federation entity adopted a 
law  further  regulating  the  representativeness  of  social  partners,  which  should  facilitate 
collective  agreements.  The  number  of  concluded  branch  and  sectoral  collective  agreements, 
however,  remains  low.  Economic  and  Social  Councils  operate  at  entity  level,  with  different 
approaches  and  effectiveness.  The  state-level  Economic  and  Social  Council  has  not  been 
established. There are no general  collective agreements in  the two entities, but  a number of 
branch  agreements  are  in  place,  limited  mainly  to  the  public  sector  and  some  state-owned 
enterprises.   

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Laws  on  social  entrepreneurship  were  adopted  in  the  Republika  Srpska  entity  in  November 
2021 and in Brčko District in January 2022. Adoption is pending in the Federation entity.  

Regarding  employment  policy,  there  is  still  no  countrywide  employment  strategy  in  place. 
Entity  strategies  have  expired  too.  An  employment  strategy  2021-2027  was  adopted  in  the 
Republika Sprska entity, including the Youth Guarantee. An employment strategy remains to 
be adopted in the Federation entity.  

According  to  the  data  of  the  Labour  Force  Survey  in  2021,  only  39.6%  of  the  working  age 
population is employed, but only 48% of the working age population is actually active in the 
labour market, with a markedly lower share of women (less than 40% of the total). When it 
comes  to  employment,  the  share  of  women  is  even  lower,  and  stands  at  39.3%  of  the  total 
number of the employed persons. Shares of men and women in the unemployed are roughly 
the same, pointing to the significantly lower activity rate of women of working age (over 60% 
of inactive population are women). Youth unemployment remains high, as 40% of those aged 
15 – 24 that are actually looking for work are unable to find it. 81% of the unemployed are 
younger than 50. Long-term unemployment prevails, as almost 80% of the total unemployed 
have been looking for work for more than a year and were unable to find it.  This also points 
to  a  mismatch  between  the  outputs  of  the  education  system  and  real  needs  of  the  labour 
market and predominantly structural nature of the unemployment. 

The  highest  share  in  educational  structure  of  the  unemployed  persons  have  those  with 
completed secondary education and specialisation (71.8%), followed by those with a  college, 
university, master and doctoral degree (14.2%), and those with completed primary school or 
lower education (14%). 

The trend of labour emigration from Bosnia and Herzegovina to the EU has been constantly 
increasing for years, with the number of first residence permits in EU Member States granted 
to  Bosnia and  Herzegovina nationals  rising  steadily from 11 506 in  2011  to  56 363 in  2019 
and decreasing to 35 158 only in 2020 due to the COVID-19 pandemic.  

The capacity of the public employment services to provide quality services to jobseekers has 
been  gradually  improving  but  remains  weak.  The  administration  of  social  benefits  further 
limits  the  ability  of  public  employment  services  to  assist  active  jobseekers.  The  public 
employment  service  should  be  discharged  from  administrative  duties  related  to  health 
insurance and other social benefits for the registered unemployed. This has been implemented 
only  in  the  Republika  Srpska  entity,  while  no  progress  has  been  made  in  other  parts  of  the 
country. 

Bosnia and Herzegovina took part in bilateral and regional awareness-raising meetings on the 
Youth  Guarantee.  In  the  upcoming  period,  the  country  needs  to  put  in  place  coordination 
mechanisms  involving  all  relevant  actors  and  take  concrete  steps  to  gradually  establish  and 
implement the Youth Guarantee scheme by developing the Youth Guarantee Implementation 
Plan, with the Ministry of Civil Affairs coordinating action by the entities and Brčko District. 

The  level  of  informal  employment  remains  high.  The  measures  to  reduce  informal 
employment  are  supported  within  active  employment  measures  such  as  self-employment, 
incentive programmes for employers and improvement of business  climate, as well as some 
repressive measures and efforts to reduce para-fiscal charges. 

There  has  been  no  progress  in  preparations  for  using  the  European  Social  Fund.  (See 
Chapter 22 - Regional policy and coordination of structural instruments). 

On  social  inclusion  and  protection,  there  are  still  no  countrywide  strategies  on  poverty 
reduction,  social  inclusion  and  protection  or  a  system  at  state  level  for  monitoring  policy 

89 

 
 
implementation.  For  persons  with  disabilities,  institutional  care  is  still  prevalent.  Services 
within the community that enable independent living are not adequately supported and there is 
no comprehensive strategy for deinstitutionalisation. At entity level, there is a wide range of 
strategies and laws related to social inclusion and protection, but they are not enforced due to 
lack of funding, inadequate procedures, standards and referral practices and a general lack of 
coordination.  

The social protection system remains underdeveloped and the effectiveness of social transfers 
is  limited.  Social  assistance  is  neither  well  targeted,  nor  needs-based  due  to  the  absence  of 
adequate system for data collection. A large number of people in Bosnia and Herzegovina are 
not  covered  by  public  health  insurance  and  as  such  are  not  entitled  to  the  basic  package  of 
health care services. In addition, because of the highly decentralised governance structure, the 
eligibility conditions for social assistance differ between entities, districts and cantons. Along 
with  differences  in  eligibility  criteria,  there  are  also  differences  in  coverage,  targeting 
efficiency  and  generosity.  Cooperation  between  the  social  service  centres  and  employment 
bureaus is not well established. The transformation of institutions for social protection and, in 
particular,  of  those  for  children  without  parental  care  is  still  ongoing.  Deinstitutionalisation 
requires comprehensive reform with regard to financing of the new services for both, capacity 
building and support to social service centres across the country. 

There are still no countrywide systematic measures to improve the situation of older persons. 
A strategy for improving the situation of the elderly 2019-2028 was adopted in the Republika 
Srpska  entity  but  systematic  measures  to  improve  the  situation  of  older  persons  need  to  be 
taken at country level. Bosnia and Herzegovina should adopt a new action plan for children.  

In  April  2022,  the  Council  of  Ministers  adopted  a  countrywide  action  plan  for  the  social 
inclusion  of  the  Roma  2021-2025,  encompassing  antidiscrimination,  housing  employment, 
education,  and  healthcare  health.  Its  implementation  will  require  appropriate  funding  by  all 
levels of government, and continued monitoring. (Also see  chapter 23 – Fundamental rights) 

The  Federation  entity  amended  the  legislation  to  extend  the  right  to  a  survivor's  pension  to 
family members of fallen soldiers who did not have insurance at the time of death.  In April 
2022, the Federation entity Parliament increased the social protection and allowances for war 
veterans and their families. In November 2021 and January 2022 respectively, the Republika 
Srpska entity and Brčko District adopted legislation to support employment opportunities for 
disadvantaged groups social enterprises and cooperatives.  

In  December  2021,  the  Republika  Srpska  entity  amended  legislation  on  children  protection, 
increased financial allocations, and expanded the scope of right  to  children allowances. The 
amendments  also  extended  the  right  to  wage  compensation  for  parents/guardians  who  work 
part-time  due  to  child’s  needs  for  enhanced  care  and  increased  the  amount  of  monthly 
allowance for parent caregivers. In November 2021, the Federation entity adopted legislation 
regulating the status of parents who are caregiver to their disabled children and provided them 
with a right to monthly allowance with paid corresponding social security contributions.    

The EU Statistics on Income and  Livings Conditions  (EU-SILC) is  still not  available in  the 
country.  

On non-discrimination  in employment and social policy, although labour laws within the 
country address the issue of non-discrimination at work, apart from policy frameworks which 
target  the  increase  of  employment  opportunities  for  persons  with  disabilities,  there  are  no 
in  place  specifically  developed  for  employment-related 
strategies  or  action  plans 
discrimination.  The  labour  market  and  the  social  policies  have  not  been  very  successful  in 
addressing  the  specific  needs  of  vulnerable  population,  including  Roma.  The  weak  links 

90 

 
 
between the responsible ministries and lack of cooperation constitutes a barrier for progress. 
In  2021,  the  Ombudsman  dealt  with  261  cases  of  employment-related  discrimination. 
Complaints concern mainly irregularities in employment and dismissal procedures, and in the 
payment  of pensions,  contributions  and compensations.  A significant  number of workers do 
not  initiate  proceedings,  nor  do  they  seek  judicial  protection  for  fear  of  being  fired.  Most 
public  bodies  do  not  have  mechanisms  for  dealing  with  complaints  of  mobbing  and 
discrimination in line with the antidiscrimination law. 

The principle of equal opportunities and equal treatment of men and women in matters 
of  employment  and  social  policy  is  regulated  by  the  laws  on  gender  equality  and 
antidiscrimination,  and  by  the  entity-level  labour  laws.  These  laws  contain  provisions  on 
gender  equality  covering  different  areas  (employment,  education,  training  and  professional 
qualification) but  in  practice the enforcement of  non-discrimination legislation remains low. 
The employment rate for the population aged 20-64 decreased from 40% in 2020 to 39.1% in 
2021 for females and increased slightly for men from 65% to 66% respectively, resulting in a 
high gender employment gap of 26.9 percentage points.  

There are still different  maternity leave benefits  and definitions of parental leave across the 
country.  Bosnia  and  Herzegovina  needs  to  establish  a  uniform  minimum  maternity  leave 
benefits across the country and harmonise the definition of maternity, paternity and parental 
leave to eliminate discrimination. Women are estimated to earn on average 78% to 85% of a 
man’s salary for the same position. 

The  Republika  Srpska  entity  reinforced  its  legislative  framework  on  protection  from 
harassment at work in September 2021, largely in line with relevant standards.  

Chapter 20 - Enterprise and industrial policy 

EU enterprise and industrial policy strengthens competitiveness, facilitates structural change 
and  encourages  a  business-friendly  environment  that  stimulates  small  and  medium-sized 
enterprises (SMEs). 

Bosnia and Herzegovina remains at  an  early  stage of preparation  in  the area of enterprise 
and industrial policy. Limited progress was made, notably in updating entity-level industrial 
policy  strategies  and  in  harmonising  the  insolvency  framework  across  the  country.  The 
investment environment remains unsatisfactory. The recommendations of the previous report 
remain in large part valid.  

In the coming year, Bosnia and Herzegovina should in particular: 

  simplify  and  harmonise  business  registration  in  both  entities  in  order  to  reduce  the 
administrative  burden  on  entrepreneurs,  by  centralising  company  registration  and 
licensing under one-stop-shops and by broadening online registration;  

  harmonise  the  industrial  policy  strategies  and  action  plans  of  the  various  levels  of 
government,  ensuring  coordination  and  involvement  of  industrial  enterprises  in  policy 
formulation and implementation; 

  assess  the  needs  of  businesses,  particularly  SMEs,  when  it  comes  to  modernising  skills 
and adopt strategic guidelines for harmonisation of SMEs and entrepreneurship support. 

During  the  reporting  period,  the  entities  and  Brčko  District  continued  COVID-19  support 
measures  for  business  in  the  form  of  subsidies  and  tax  reliefs.  Guarantee  funds  continued 
operating  in  both  entities.  Although  substantial  resources  were  allocated  to  mitigate  the 
economic consequences of COVID-19, a consistent countrywide approach (coordinated with 
the private sector) is still absent and the crisis response was fragmented, insufficient and slow. 

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An  ex-post  evaluation  of  the  COVID-19  support  measures  for  business  would  provide 
accountability for the use of public funds and evidence on the effectiveness of measures for 
future policy-making.  

Regarding enterprise and industrial policy principles, Bosnia and Herzegovina still lacks a 
countrywide  industrial  development  strategy  as  well  as  a  state-level  body  promoting 
consistency  between  industrial  strategies  and  coherence  with  other  related  policies.  The 
Republika Srpska entity adopted its industrial development strategy for 2021-2027 in August 
2021  and  adopted  the  accompanying  action  plan  in  April  2022.    The  strategy  partially 
corresponds to the EU industry strategy and envisages financing of up to EUR 85 million for 
its  implementation.  In  April  2022,  the  Federation  entity  also  adopted  its  own  development 
strategy  to  2027.  The  Brčko  District  has  yet  to  prepare  sectoral  strategies  to  implement  its 
existing development strategy which is valid until 2027. 

A few steps were made to improve the business environment and to attract investments. The 
Republika  Srpska  entity  expanded  the  eligibility  criteria  for  its  direct  investment  incentive 
programme  in  March  2022,  and  in  December  2021  the  entity  adopted  its  action  plan  to 
optimise administrative procedures in business registration, which is monitored by a council 
of  45  stakeholders.  The  Republika  Srpska  entity  also  adopted  a  rulebook  on  free  zones  in 
October 2021 to implement its own legislation, also in line with the state-level framework. In 
July 2021, the Federation entity adopted a new bankruptcy law, while Brčko District adopted 
its own in  April 2022. As a result, the insolvency  framework is  now harmonised across the 
country.  In  September  2021,  the  Federation  entity  also  adopted  a  law  on  crafts,  which 
amongst  other  measures  simplifies  the  registration  and  closure  of  craft  businesses  and 
regulates the management of a crafts registry.  

Despite  these  developments,  the  investment  environment  and  the  level  of  competitiveness 
remain unsatisfactory. Bosnia and Herzegovina still lacks a countrywide strategic framework 
to  encourage  foreign  direct  investment  and  to  improve  the  business  environment.  Common 
causes of informality like high barriers to starting a business and rules on taxes and para-fiscal 
charges continue to be among the most salient business environment issues, together with ‘red 
tape’ and the regulatory differences across various levels of the government. While electronic 
registration of businesses was launched in the Republika Srpska entity, the system is not yet 
fully  functional  due  to  delays  in  the  issuing  of  e-signatures  and  e-seals.  Such  a  system  was 
also  established  in  Brčko  District.  Since  October  2021,  the  Federation  entity  also  enables 
online  business  registration  applications  and  set  up  a  one-stop-shop.  Further  legislation  is 
pending  adoption  to  allow  the  Financial  Information  Agency  to  begin  implementing  this 
system. 

Regulatory impact assessment is applied across the country and has been expanded to cover 
the impact on SMEs, though it is still often perceived as a mere formal obligation. Overall, the 
simplification of business-related legislation is being carried out on an ad hoc basis and is not 
harmonised throughout the country, e.g. as regards additional administrative and compliance 
requirements between entities.  

Oversight  and  governance  of  public  enterprises  remains  to  be  strengthened,  including 
actions  to  put  public  companies  on  an  equal  footing  with  other  industrial  enterprises  and  to 
reduce  substantial  payment  arrears.  In  October  2021,  the  Republika  Srpska  entity  decided  to 
establish  a  unit  for  the  coordination  and  supervision  of  public  enterprises  within  the 
Government’s  Secretariat,  with  an  aim  to  establish  a  new  register  of  public  enterprises.  The 
Financial  Information  Agency  continues  to  update  the  register  of  public  companies  in  the 
Federation.  Brčko  District  introduced  clarifications  on  the  selection  and  accountability  of 
governing boards of public enterprises which entered into force in April 2022. 

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Bosnia and Herzegovina still lacks a countrywide strategic framework for SME development 
with  harmonised  objectives,  priorities  and  measures  relevant  for  each  administrative  level. 
The Federation entity adopted in February 2022 a proposal for developing a Small Business 
Development  Strategy  2022  –  2027.  Bosnia  and  Herzegovina  has  no  timelines  yet  for 
developing  a  comprehensive  countrywide  SME  framework  for  implementing  the  Small 
Business  Act  as  a  whole.  Although  the  harmonised  2021-2023  action  plans  for  support  to 
SME  innovation  were  adopted  in  both  entities  and  Brčko  District  in  2021,  the  resulting 
country-wide  priorities  have  not  yet  been  utilised  for  developing  a  Smart  Specialisation 
Strategy,  which  would  still  require  a  fully-fledged  analysis  for  evidence-informed 
policymaking.  

Preparations for the green and digital transitions and global competitiveness of industry 
in  line  with  the  EU  industrial  strategy  are  at  a  very  early  stage.  While  the  level  of  internet 
usage in enterprises is high (with 98% using computers and 96% having internet access), only 
around 60% of small enterprises have a webpage and only 18% are active in e-commerce.  

Energy diversification is slowly advancing. Bosnia and Herzegovina’s economy is about six-
times  more  carbon-intensive  than  the  EU  average,  which  requires  a  greater  focus  on  green 
investments, including actions at the SME level. 
In 2021 Bosnia and Herzegovina ranked 75th out of 132 economies in the Global Innovation 
Index. The low-level  commercialization of R&D is  linked to  low public investments  in  this 
area  (just  0.03% of GDP) and the weak linkages for technology transfer and cooperation in 
clusters. The share of higher value-added and technology products is modest, and technology 
extension services are still non-existent. Private-sector applications under Horizon 2020 show 
a success rate of just 10%, and the Enterprise Innovation Fund has not invested in the country. 
Bosnia and Herzegovina ratified the Horizon Europe Association Agreement in January 2022, 
with  retroactive  effect  from  the  start  of  the  programme.  The  collaboration  of  SMEs  and 
research  institutions  is  not  sufficiently  developed  to  create  conditions  for  the  application  of 
innovative  financing  models  like  innovation  vouchers  or  collaborative  grants.  The  needed 
amendment to the patent law (see Chapter 7 – Intellectual Property Law) could improve both 
collaboration and financing of innovation activities for higher value-added business. 

The capacities and funding to perform monitoring and evaluations of enterprise and industrial 
policy  measures  are  still  limited,  and  the  data  remains  insufficient  to  describe  the  structure 
and dynamics of industry. 

As  for  enterprise  and  industrial  policy  instruments,  no  progress  was  made  in  the  EU 
acquis alignment of legislation against late payments in commercial transactions, including in 
the Brčko District. 

Bosnia  and  Herzegovina  continued  to  participate  in  the  EU’s  COSME  programme  on  the 
competitiveness  of  enterprises  and  SMEs.  In  2021,  the  partners  from  the  two  Enterprise 
Europe  Network  (EEN)  consortia  in  Bosnia  and  Herzegovina  received  funding  of  around 
EUR 1.1 million. Bosnia and Herzegovina expressed its interest in participating in the Single 
Market Programme, and negotiations for an association agreement started in April 2022 and 
are progressing. 

As  regards  sectoral  policies,  both  entities  adopted  their  tourism  strategies  valid  until  2027, 
the Republika Srpska entity in January 2022 and the Federation entity in August 2022.  

Chapter 25 - Science and research 

The  EU  provides  significant  support  for  research  and  innovation.  All  Member  States  can 
benefit  from  the  EU’s  research  programmes,  especially  where  there  is  scientific  excellence 

93 

 
 
and solid investment in research.  

Bosnia and Herzegovina has some level of preparation in the area of science and research. 
Limited  progress  was  made,  notably  by  finalising  the  country’s  association  to  Horizon 
Europe. The country’s research capacities remain very limited. Last year’s recommendations 
remain valid.  

In the coming year, Bosnia and Herzegovina should in particular:  

  develop a new 2022-2028 strategy and action plan for scientific development;  

  develop and adopt a smart specialisation strategy;  

  adopt the roadmap for research infrastructure. 

On  research  and  innovation  policy,  the  legislative  framework  regulating  science  and 
research  development  remains  fragmented  and  still  needs  to  be  improved  throughout  the 
country. No action plan was in place from 2017 till 2022. Bosnia and Herzegovina needs to 
develop and adopt a new strategy and action plan for scientific development (2022 – 2028). 

The country’s estimated  total  allocations for research and innovation remain  below 0.3% of 
GDP. An increased budget, particularly in the area of innovation, is essential for the country’s 
economic recovery, also given its key relevance for the implementation of the Economic and 
Investment Plan for the Western Balkans. Further progress should be made to ensure reliable 
and  comprehensive  statistics  on  research  and  innovation,  e.g.  for  the  European  Innovation 
Scoreboard  and  the  European  Research  Area.  The  country’s  research  capacities  remain 
limited,  while  brain  drain  continues  –  although  limited  due  to  COVID-19  outbreak,  most 
notably  in  the  health,  medical,  and  IT  sectors,  with  no  systematic  measures  having  been 
introduced so far to address the issue.  

A Smart Specialisation Strategy has not yet been developed and adopted. 

In December 2021, Bosnia and Herzegovina concluded the association to the Horizon Europe 
programme, with retroactive application since January 2021. The agreement entered into force 
in August 2022. 

The government’s efforts in upgrading research and innovation policies and related activities 
(e.g.  the  Strategy  for  the  Development  of  Science  and  the  pending  adoption  and 
implementation  of  the  related  action  plan)  as  well  as  grants  provided  to  organisations  for 
submitting  proposals  under  Horizon  Europe  are  delivering  results.  However,  systemic 
collaboration and interaction needs to be enhanced between ‘triple helix’ actors  – academia, 
industry and governments.  

As regards international cooperation, building on its previous participation in Horizon 2020, 
Bosnia  and  Herzegovina  is  taking  part  in  Horizon  Europe,  having  competitively  received 
EUR  1.65  million  in  the  first  year.  Bosnia  and  Herzegovina  participated  113  times  to  69 
signed  grants  of  of  the  previous  Horizon  2020  programme,  competitively  receiving  an  EU 
contribution  of  EUR  8.1  million.  The  success  rate  of  applications  from  Bosnia  and 
Herzegovina (15%) was above the overall Horizon 2020 success rate.  

The country cooperates at regional level, with the Central European Initiative, it is active in 
EUREKA and in COST with an increasing number of participations in its actions. Bosnia and 
Herzegovina  became  full  member  of  EUREKA  in  2021.  Bosnia  Herzegovina  has 
implemented  a  total  of  11  EUREKA  collaborative  projects  worth  of  over  EUR  7 million  in 
total funding for universities and SMEs. In EUREKA Bosnia and Herzegovina is active in the 
areas of health, ICT, energy, food, agriculture, and forestry. 

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Starting  with  2021,  Bosnia  and  Herzegovina  is  included  in  the  European  Innovation 
Scoreboard  (EIS),  enabling  its  participation  in  the  European  Institute  of  Innovation  & 
Technology’s regional innovation scheme (EIT RIS). In the EIS, Bosnia and Herzegovina was 
found  to  be  an  Emerging  Innovator.  Over  time,  its  performance  relative  to  the  EU  has 
decreased, in particular in the last two years.  

Chapter 26 - Education and culture 

The EU supports cooperation in education and culture through funding programmes and the 
coordination of Member State policy through the open method of coordination. The EU and 
the Member States must also prevent discrimination and ensure quality education for children 
of migrant workers, including those from disadvantaged backgrounds.  

Bosnia  and  Herzegovina  is  at  an  early  stage  of  preparation  in  the  area  of  education  and 
culture. There was no progress in the area, with Bosnia and Herzegovina failing to participate 
in 2021 PIRLS or 2022 PISA. A fully functional system of accreditation of higher education 
institutions and in particular study programmes is still lacking. Bosnia and Herzegovina needs 
to  align  legislation  at  all  levels of  government  with  the  framework  laws  on  education,  and 
ensure  application  of  the  common  core  curriculum  based  on  learning  outcomes.  Social 
inclusion at all stages of education needs  to  be  ensured. Youth strategies across the country 
the 
should  be  developed  and 
recommendations of the 2021 report remain relevant.  

implemented.  Having  only  been  partly  addressed, 

In the coming year, Bosnia and Herzegovina should in particular:  

  extend  and  update  the  action  plan  for  the  national  qualification  framework  (NQF)  and 

establish an inter-sectoral commission for NQF; 

  ensure a fully functional system of (re-)accreditation of higher education institutions and 

study programmes across the country; 

  ensure continued participation in international assessment studies13 and implementation of 

findings to improve PISA results. 

In the area of education and training, Bosnia and Herzegovina failed to participate in 2021 
PIRLS or 2022 PISA. Coordination of the processes linked with participation in international 
assessment studies needs to be significantly improved. No clear measures have been taken by 
Bosnia and Herzegovina to address the findings of 2018 PISA and 2019 TIMSS; in lack of a 
country  wide  approach,  some  cantons  have  started  reforming  their  curriculum  based  on 
students  learning  outcomes  to  improve  quality  in  line  with  2018  PISA  and  2019  TIMSS 
recommendations. 

Activities on implementation of the recommendations for action policies with the roadmap for 
promotion  of  inclusive  education  in  Bosnia  and  Herzegovina  should  be  intensified.  The 
education of children with special needs remains a challenge, particularly in terms of ensuring 
the  necessary  infrastructure,  provisions,  transportation  and  school  assistants  to  support  both 
children and teachers. 

Although  the  legal  framework  regulating  the  collection  and  systematization  of  data  for  the 
country is in place, there is no mechanism in place to systematically measure or monitor the 
quality  of  education  inputs,  outputs,  or  outcomes.  Data  does  not  feed  back  into  the  policy-

13 International Student Assessment – PISA, Trends in International Mathematics and Science Study  – TIMSS 
and Progress in International Reading Literacy Study – PIRLS, International Computer and Information Literacy 
Study – ICILS, Teaching and Learning International Survey – TALIS. 

95 

 
 
                                                           
making  process.  Legislation  at  all  levels  needs  to  be  aligned  with  the  framework  laws  on 
education. 

The education system lacks common standards for the different levels of education, as well as 
in  teacher  training  and  performance  evaluation.  Comprehensive  teacher  training  focused  on 
developing  students'  key  competences  should  be  provided  and  a  systematic  approach  for 
application of the common core curriculum based on learning outcomes ensured. 

Due  to  demographic  changes,  the  number  of  students  enrolled  at  all  levels  of  education  is 
gradually  declining.  In  early  childhood  education  and  care  (ECEC),  the  enrolment  rate 
remains very low at around 12% but with a positive trend (+16.9%). Only 25% of three-to-six 
year  olds  (and  only  3%  of  Roma  children)  are  enrolled  in  pre-school  education,  the  lowest 
rate in Europe. Enrolment generally remains lower than average for Roma children. 

A  countrywide  policy  document  on  vocational  education  and  training  (VET)  is  in  place 
since 2021, based on the Riga conclusions (2021-2030). No noticeable progress followed its 
adoption.  

There  is  no  progress  in  developing  a  national  qualification  framework  for  Bosnia  and 
Herzegovina.  The  related  action  plan  expired  in  2020  and  should  be  extended  and  revised, 
since  it  was  never  operational  and  no  specific  commission  for  the  national  qualification 
framework  has  been  established.  The  process  of  developing  qualifications  and  occupations 
remains  slow  and  requires  better  coordination  and  harmonisation  across  the  entire  country. 
Bosnia  and  Herzegovina’s  national  qualification  framework  is  not  yet  referenced  to  the 
European  Qualification  Framework,  neither  is  there  a  mechanism  for  validation  of  prior 
learning.  

The cooperation between the two accreditation agencies, the one at state level and the one in 
the  Republika  Srpska,  has  improved.  Bosnia  and  Herzegovina  should  significantly  intensify 
efforts to ensure a fully functional accreditation system of higher education institutions and in 
particular study programmes.  Implementation of the Commission’s recommendations on the 
subject remains limited. 

Bosnia  and  Herzegovina  benefits  from  the  international  dimension  of  the  Erasmus+ 
programme,  however  there  were  no  international  mobility  or  capacity  building  in  higher 
education calls in 2021.  

In  the  area  of  culture,  Bosnia  and  Herzegovina  is  implementing  measures  under  the 
UNESCO Convention on the protection and promotion of the diversity of cultural expression. 
The country has to ensure a permanent solution to the legal status and financing for the seven 
cultural institutions of significance for Bosnia and Herzegovina.  

Implementation of the decisions of the Commission to Preserve National Monuments rests on 
the entities and there is room for improvement. The budget allocation for culture on all levels 
of  government  should  be  increased  with  longer  term,  multi-annual  funding  decisions  to 
provide stability for cultural creation and operation. Bosnia and Herzegovina has to establish 
formal  partnership  structures  enabling  transparent  and  organised  participation  in  cultural 
policymaking.The  Creative  Europe  2021-2027  programme  was  adopted  by  the  Presidency 
only in April 2022.  

Although there  are  youth  strategies at  some levels  of  government,  Bosnia and Herzegovina 
should  work  on  a  countrywide  youth  strategy  that  would  ensure  equal  treatment  of  young 
people and address brain drain. Bosnia and Herzegovina joined the European Week of Sport 
in September 2021 within the initiative of the European Week of Sport Beyond Borders.  

Chapter 29 - Customs union 

96 

 
 
All Member States are part of the EU customs union and follow the same customs rules and 
procedures.  This  requires  legislative  alignment,  adequate  implementing  and  enforcement 
capacity, and access to the common computerised customs systems. 

Bosnia  and  Herzegovina  has  some  level  of  preparation  in  the  area  of  customs  union. 
Customs legislation is not fully aligned with the EU acquis. Some progress was made during 
the  reporting  period  by  adopting  the  customs  offenses  law  and  starting  to  implement  the 
customs policy law from August 2022. The Commission’s recommendations from 2021 were 
partially implemented.  

In the coming year, Bosnia and Herzegovina should in particular: 

  eliminate  all  administrative  burdens  in  order  to  ensure  the  interoperability  of  the  e-

signature system on a country-wide basis;  

  reinforce the administrative and operational capacity of the Indirect Taxation Authority;  

  increase  post-clearance  controls  based  on  risk  analysis,  expand  use  of  simplified 
interconnectivity  and 

procedures  for  reliable  economic  operators  and  upgrade 
interoperability with EU IT systems and requirements.  

The body in charge of implementing customs legislation and policies is the Indirect Taxation 
Authority  (ITA).  Further  alignment  with  the  Union  Customs  Code  is  needed,  notably  on 
customs procedures and simplified procedures. Implementation of the 2015 Law on Customs 
Policy,  partially  aligned  with  the EU  acquis, began in  August  2022.  The  law allows for the 
introduction  of  an  authorised  economic  operators  scheme  and  for  additional  simplified 
customs  procedures  requiring  the  use  of  e-signature.  The  customs  tariff  and  valuation 
classifications  are  harmonised  with  the  EU’s  Combined  Nomenclature.  Regarding  rules  of 
origin, the country continues to apply the Pan-Euro Mediterranean Convention and has agreed 
to begin the process of adopting the transitional rules of origin. 

Bosnia and Herzegovina is an observer in the Common Transit Convention and intends to join 
it  once  it  has  met  all  legal  and  technical  requirements.  These  include  the  successful 
implementation  of  the  new  computerised  transit  system  for  one  year  at  the  national  level, 
which began in August 2022, followed by full implementation of the system thereafter.  

Bosnia  and  Herzegovina  should  also  continue  aligning  its  provisions  on  the  protection  of 
intellectual property rights when it comes to customs enforcement. Also, further alignment is 
needed  with  the  EU  acquis  for  authorised  economic  operators,  which  has  to  be  achieved 
through implementation of the Central European Free Trade Agreement (CEFTA) Additional 
Protocol  5.  Cross-border  smuggling  of  tobacco  products  and  other  illicit  activities  in  the 
border regions  continue  to  be an important  area  where  further improvements  in  cooperation 
and  anti-fraud  tools  are  needed.  As  part  of  the  anti-fraud  effort,  the  accession  to  the  World 
Health Organization’s Protocol to eliminate illicit trade in tobacco products is recommended. 

The  administrative  and  operational  capacity  of  the  Indirect  Tax  Authority  should  be 
substantially strengthened, especially in key operational posts. Bosnia and Herzegovina needs 
to  progressively  align  its  systems  with  EU  customs  requirements,  such  as  the  new 
computerised  transit  system  and  internal  control  standards.  Its  capacity  to  conduct  a  risk 
analysis is hampered by an inadequate IT system. The customs authorities still perform a high 
percentage of physical controls.  

97 

 
 
 
CLUSTER 4: THE GREEN AGENDA AND SUSTAINABLE CONNECTIVITY  

This  cluster  covers  chapters  14  -  Transport  policy,  15  –  Energy,  21  -  Trans-European 
Networks,  and  27  -  Environment  and  climate  change.  The  green  transition  and  sustainable 
connectivity are key to economic integration within the region and with the European Union, 
facilitating cross-border trade within the region and creating real benefits for businesses and 
citizens.  

Bosnia  and  Herzegovina  is  at  early  stage  of  preparation  in  most  areas  related  to  the  Green 
Agenda  and  sustainable  connectivity,  namely  on  energy,  environment  and  climate  change. 
Legislation  related  to  gas,  electricity,  renewable  energy,  energy  efficiency  still  needs  to  be 
adopted.  The  country  has  some  level  of  preparation  in  the  areas  of  transport  and  of  trans-
European  networks.  Additional  efforts  are  needed  to  improve  road  safety  to  reduce  traffic 
fatalities, and strengthen the regulatory bodies on transport, including civil aviation. 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  needs  to  be  accelerated  in  the  upcoming  period.  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. 

Chapter 14 - Transport policy 

The EU has common rules for technical and safety standards, security, social standards, State 
aid  and  market  liberalisation  in  road  transport,  railways,  inland  waterways,  combined 
transport, aviation and maritime transport.  

Bosnia  and  Herzegovina  has  reached  some  level  of  preparation  in  this  area,  with  limited 
progress achieved in the past year, including on implementation of the framework transport 
strategy  and  action  plans,  namely,  in  maintaining,  developing  and  improving  infrastructure. 
The country needs to further align with and implement effectively the EU acquis in all areas 
of transport and at all levels of government. Bosnia and Herzegovina still needs to strengthen 
its  administrative  capacity,  in  particular  concerning  road  safety  as  well  as  enforcement, 
inspection and investigation bodies for road transport, railways, inland waterways, combined / 
intermodal transport and civil aviation. Last year’s recommendations have not been addressed 
and remain valid. In the coming year Bosnia and Herzegovina should in particular: 

  develop  enforcement  capacity  to  reduce  road  traffic  fatalities  and  make  progress  on 

establishing a national system for continuous road crash data collection; 

  reinforce  the  independence,  strengthen  the  capacity  and  ensure  sufficient  funding  of 

regulatory bodies in the field of transport; 

  draw up the strategic framework, adopt relevant legislation and ensure sufficient capacity 
and  resources  for  implementing  the  intelligent  transport  system  (ITS)  on  the  core 
networks. 

Regarding  the  general  EU  transport  acquis,  Bosnia  and  Herzegovina  is  implementing  its 
framework  transport  strategy  for  the  period  up  to  2030.    The  development  of  the  transport 
sector  and  the  speed  of  structural  adjustment  and  reforms  are  insufficient  and  slow.  The 
necessary investments are being delayed by political blockades and lack of coordination and 
cooperation  among  all  levels  of  government,  resulting  in  a  lack  of  focus  on  key  priorities. 
Other  constraining  factors  are  limited  borrowing  capacity  and  limited  financial  resources  to 

98 

 
 
prepare technical  documentation.  As highlighted  in  the Transport Community Treaty (TCT) 
action plans, Bosnia and Herzegovina should focus on implementing short- and medium term 
measures.  There  was  still  no  progress  in  completing  key  sector  reforms.  Further  efforts  are 
required  to  ensure  full  alignment  with  the  intelligent  transport  systems  (ITS)  directive  (its 
upcoming  revised  version  and  the  related  delegated  acts),  foster  multimodality  and  secure 
implementation of relevant national laws in the areas of road and rail. An overall strategy for 
ITS is yet to be adopted and appropriate resources should be allocated for its implementation.  

Bosnia and Herzegovina continues to actively participate in the EU macro-regional strategies 
for  the  development  of  the  Danube  Region  (EUSDR)  and  the  Adriatic  and  Ionian  Region 
(EUSAIR).The country is moderately prepared for road transport. It made limited progress 
in the reporting period only in maintaining, developing and improving infrastructure. Bosnia 
and Herzegovina should implement measures agreed in the TCT road safety and road safety 
action  plan  to  develop  climate  resilient,  intelligent  and  resource-efficient  TEN-T  road 
networks.  Implementation  of  road  safety  legislation  remains  of  concern.  The  number  of 
fatalities has scarcely fallen between pre-pandemic 2019 and 2021. Moreover, work is needed 
to  tackle  the  discrepancy  between  the  national  figure  and  the  significantly  higher  WHO 
estimate.  As  part  of  the  TCT  road  safety  action  plan,  the  Ministry  of  Communications  and 
Transport still needs to establish a lead road safety agency and a countrywide system for the 
continuous collection of road crash data.  

For  years,  Bosnia  and  Herzegovina  has  yet  to  adopt  a  state-level  law  on  the  international 
transport of dangerous goods by road. The country still needs to strengthen its mechanisms for 
monitoring  the  implementation  of  the  relevant  international  rules  and  EU  legislation, 
including those on transportable pressurised equipment, roadside checks of vehicles and road 
safety.  

On rail transport, Bosnia and Herzegovina made limited progress in the reporting period; the 
regulatory framework (laws and by-laws) and administrative capacity of the railway regulator 
for the opening of the market is now in place and subject to continuous and regular revisions 
and  improvements.  Nearly  half  of  the  railway  infrastructure  remains  unsafe,  outdated  and 
unreliable,  and  cannot  enable  suitable  international  transit  on  the  network.  The  multiannual 
maintenance plan for the entire core network is  still pending adoption,  and the countrywide 
coordination of infrastructure interventions on railways is degrading. Taking into account the 
related elements of the TCT rail action plan, and in line with EU standards, the country should 
use  modern  intelligent  transport  systems  for  the  reconstruction  and  new  construction  of 
railway  sections.  EU  standards  are  not  fully  and  systematically  implemented,  since  less 
advanced variants, even sometimes incompliant with ITS, are deemed more cost-efficient. 

Bosnia and Herzegovina still needs to fully align with the fourth EU railway package of 2016 
and to proceed with opening the railway market. The railway laws in both entities, aiming to 
provide non-discriminatory access to the network are to a large extent not compliant with the 
acquis and still need to be reviewed. There is no progress on alignment with the EU acquis on 
rail  passenger  rights.  Network  statements  are  prepared  but  not  published.  Establishing 
independent  bodies,  namely  the  railway  safety  authority  and  railway  accident  investigation 
body, requires amending the law on railways, which is still pending. There was no progress 
on negotiating protocols on railway border crossing procedures with Croatia, due to technical 
concerns  on  border  and  customs-related  issues.  Some  progress  was  achieved  on  regional 
cooperation,  with  the  signature  of  a  memorandum  of  understanding  by  all  infrastructure 
managers of the Western Balkan region and of a Dedication to Rail declaration at ministerial 
level. 

Maritime transport is not deemed a priority, since the country has a very narrow sea shore 

99 

 
 
and neither has a commercial port nor a maritime fleet.  

Inland  waterway  transport  is  at  an  early  stage  of  preparation.  The  institutional,  legal  and 
regulatory setup of waterway transport in Bosnia and Herzegovina still need to be developed 
to ensure the safety of navigation on inland waterways and its maintenance. 

The preparation on civil aviation is backsliding. The 2009 law on civil aviation still has to be 
aligned with the requirements of the European Common Aviation Area Agreement (ECAA). 
The  Air  Navigation  Services  Agency  is  operational.  However,  according  to  the  European 
Union  Aviation  Safety  Agency  (EASA),  there  is  a  chronical  lack  of  adequately  trained  and 
qualified staff and backsliding in the institutional set-up within the Bosnia and Herzegovina 
Directorate of Civil Aviation (BHDCA). This increases the risks of safety oversight. The new 
management appointed in early 2021 has not addressed the issue, and there is no progress in 
harmonising legislation with the EU regulation on passenger rights. Bosnia and Herzegovina 
needs to enhance the independence of the civil aviation regulator to reverse the negative trend. 

Bosnia and Herzegovina has not started to develop its policy, institutions, legal and regulatory 
framework on combined / intermodal transport. The low level of priority in this sub-sector 
is caused by a physical infrastructural bottleneck at the Ivan tunnel and Bradina ramp on the 
railway in Corridor Vc, as well as by the inertia of the relevant institutions and administration. 

Chapter 15 - Energy 

EU  energy  policy  covers  energy  supply,  infrastructure,  the  internal  energy  market, 
consumers,  renewable  energy,  energy  efficiency,  nuclear  energy  and  nuclear  safety  and 
radiation protection.  

The country remains  at  an early  stage of preparations in  this  area. Only  limited progress 
was made, notably on renewable energy and electricity. Bosnia and Herzegovina still needs to 
make significant efforts to strengthen countrywide cooperation and coordination and improve 
the  fragmented  and 
legislative  and  regulatory  framework.  Last  year’s 
recommendations  have not  been implemented and remain valid.  In the coming  year, Bosnia 
and Herzegovina should in particular: 

inconsistent 

  adopt gas and electricity laws and bylaws, in compliance with the third energy package, at 
state and entity levels and ensure the full harmonisation of laws at entity level in the area 
of electricity and gas to prevent further delays in opening and functional operating of the 
energy market and establishment of a day-ahead electricity market; 

  adopt state- and entity-level legislation on renewable energy and energy efficiency in line 
with the obligations stemming from the Energy Community Treaty and the commitments 
from the 2020 Sofia summit declaration on the Green Agenda for the Western Balkans.  

  sign a direct agreement with the service provider to use electronic registers for issuance, 

cancellation and trade of guarantees of origin. 

  finalise and adopt the national energy and climate plan (NECP) 2021-2030. 

The national energy strategy of Bosnia and Herzegovina, adopted in August 2018, is outlined 
in  the  Framework  Energy  Strategy  until  2035.  Its  implementation  is  ongoing.  Bosnia  and 
Herzegovina needs to finalise and adopt the national energy and climate plan (NECP) 2021-
2030, which will replace the national energy strategy and the national energy efficiency action 
plan. Civil society organisations are involved in the drafting process.  

Measures  to  improve  security  of  supply  of  electricity  need  to  be  redirected  from  coal  to 
renewables.  Preparations  for  an  extension  of  the Tuzla  coal-fired  power  plant  (Block  7)  are 
continuing. This may increase the country’s security of supply, but at the same time it might 

100 

 
 
significantly prolong dependency on coal and is not in line with the country’s commitments to 
decarbonisation. In November 2021 the Ministerial Council of the Energy Community took a 
decision regarding the failure of Bosnia and Herzegovina to comply with its obligations under 
the  Treaty  (Case  ECS-10/18);  the  Secretariat  preliminarily  concluded  that  the  State  Aid 
Council’s  decision  does  not  comply  with  the  State  aid  acquis  and  that  the  public  guarantee 
granted in favour of the Export-Import Bank of China for a loan constitutes State aid. On 29 
June  2022,  the  State  Aid  Council  of  Bosnia  and  Herzegovina,  annulling  its  decision  from 
2018,  also  decided  that  the  guarantee  constitutes  illegal  State  aid  which  the  Federation’s 
Ministry of Finance is obliged to recover. In addition, an important supplier has stepped out of 
the Tuzla Block 7 contract.  In March 2022, the Federation entity’s Parliament extended the 
operation of two units of the thermal power plants in Kakanj and Tuzla that were expected to 
be closed in 2022 and 2023 per Ministerial Council decision, in breach of the applicable anti-
pollution laws (the large combustion plants directive). By the end of 2021, unit 4 in the Tuzla 
power plant and unit 5 in the Kakanj power plant have used up to 90% of the 20 000 working 
hours allowed by 2023. Bosnia and Herzegovina is also committed to gradually phasing out 
coal  subsidies,  aligning  with  the  EU  emissions  trading  system  (ETS)  and  introducing  other 
carbon pricing instruments to promote decarbonisation. This will be particularly challenging 
for a country whose energy production and industry depend to a large extent on fossil fuels. 
Although  the  appointment  of  the  management  of  Transco  is  still  pending,  the  company  is 
operating properly.  

Regarding  security  of  supply  for  natural  gas,  the  country  is  fully  dependent  on  a  single 
source,  rendering  Bosnia  and  Herzegovina  vulnerable  in  case  of  disruption.  Both  the 
Federation  and  Republika  Srpska  have  a  long-term  contract  with  Gazprom.  In  addition  to 
receiving  natural  gas  through  Turkish  Stream,  an  agreement  has  been  signed  for  the  single 
interconnection point between Serbia and Bosnia and Herzegovina, in accordance with the EU 
acquis. 

The Federation entity should accelerate the preparations of the main design, permitting, and 
adoption  of  the  law  on  the  Southern  Gas  Interconnector  project  that  will  contribute  to 
strengthening  the  integration  into  the  European  gas  market  and  increasing  the  security  of 
supply. The former refinery in Brod was connected to Croatia’s natural gas network in 2021 
without the required state-level approval; it remains in breach of the legal framework.  

There  was  no  progress  in  the  harmonisation  of  legislation  on  compulsory  oil  stocks  and 
petroleum products. Bosnia and Herzegovina is strongly encouraged to develop the necessary 
legislation, establish a body at state level on compulsory oil stocks and ensure harmonisation 
of legislation at entity level, in line with the requirements under the EU acquis.  

There was some progress in the creation and operation of an  internal energy market, with 
the  adoption  of  electricity  law  in  the  Brčko  District  and  the  law  on  renewables  in  the 
Republika Srpska entity. To prevent further delays in the opening and unbundling of energy 
markets,  Bosnia  and  Herzegovina  needs  to  adopt  gas  and  electricity  legal  frameworks 
compliant  with  the  third  energy  package.  The  entity-level  laws  would  need  to  be  fully 
harmonised with this legal framework. 
The  Brčko  District  Electricity  Law,  adopted  in  November  2021,  largely  aligns  with  the  3rd 
energy  package  provisions  and  incorporates  some  elements  of  the  clean  energy  package.  In 
December 2021, the Federation entity amended the law on electricity, authorising the entity 
government to cap the increase of electricity prices to 20% more than the previous year. 

The  country  still  needs  to  adopt  and  enforce  a  new  law  for  adequate  restructuring, 
certification,  and  operation  of  the  gas  transmission  system  operator  in  accordance  with  the 
third energy package.   

101 

 
 
The retail electricity markets in both entities are formally open to competition. Gas customers 
in the Federation entity are still captive. In the Republika Srpska entity, only a small portion 
of the retail market is supplied under regulated tariffs. Switching rules are in place. 

Regulated prices and tariffs do not reflect  costs, as the energy sector is subsidised by direct 
and indirect subsidies. The new law on electricity of the Republika Srpska entity provides for 
the gradual deregulation of generation prices. Bosnia and Herzegovina has made some partial 
progress in protecting energy vulnerable groups and mitigating energy poverty.  The measures 
in place focus solely on direct financial support and only target the most vulnerable groups, 
notably  recipients  of  various  social  welfare  benefits.  Wholesale  gas  market  prices  are  not 
regulated in the Republika Srpska entity. In the Federation entity, the prices are regulated by 
the Ministry. Due to sufficient electricity production from local resources and long term gas 
contracts, the energy price crisis has been avoided.  

Third-party  access  is  granted  under  regulated  tariffs  for  the  gas  network  in  the  Republika 
Srpska  entity.  In  the  Federation  entity,  negotiated  third-party  access  still  applies  to 
transmission and distribution networks. The regulatory authorities at all levels are operational, 
but  their  independence  continues  to  be  hampered  by  political  interference.  The  gas  market 
remains  closed  without  adequate  regulatory  oversight  and  lacks  transparency,  particularly 
regarding to setting prices for end consumers. 

The  country  is  yet  to  align  its  respective  legislative  framework  with  the  EU  acquis  on 
hydrocarbons,  which  includes  harmonising  with  the  directive  on  the  safety  of  offshore  oil 
and gas installations. 

There is some progress on renewable energy, but no national renewable energy action plan is 
in  place.  New  laws  on  renewable  energy  sources  were  adopted  in  January  2022  in  the 
Republika Srpska entity and in June in the Brčko District. However, there is still no state-level 
legal framework and entity-level legislation needs to be revised in line with principles of the 
cost-effective  support  framework.  Support  schemes  in  the  Federation  entity  are  based  on 
outdated feed-in tariffs, while the Republika Srpska entity introduced auctions.  

The  electricity  grid  can  accept  an  additional  840MW  from  wind  and  825MW  from  solar 
power plants. Despite large capacity, there is no significant progress in new non-dispatchable 
renewable  energy  projects.  Hydropower  planning  is  carried  out  without  consulting  all 
stakeholders  and  without  respecting  the  Espoo  Convention  on  transboundary  environmental 
impact assessment. Despite existing legal obligations, environmental impact assessments are 
not  consistently prepared, also  leading to  protests and challenges in  court.  In July 2022, the 
Federation entity Parliament decided to  ban on  the construction of small  hydropower plants 
up to 10 MW.  

Works on the Buk Bijela hydropower plant (180 MW) are ongoing since May 2021 based on 
an agreement between the Republika Srpska entity and Serbia, without the required state-level 
approval.  In  July  2021  the  Constitutional  Court  confirm  that  a  decision  by  the  state-level 
Commission  for  Concessions  is  required;  this  is  still  pending.  The  Constitutional  Court  had 
previously established that rivers and riverbeds are state property.  

Further alignment with EU requirements is necessary for issuing, transferring, and cancelling 
guarantees  of  origins  and  using  minimum  levels  of  renewable  energy  in  new  buildings  and 
existing buildings subject to major renovation. 

Renewable energy producers have priority access to the grid and pay 50%of the fixed part of 
the connection costs. On the distribution level, producers in the Republika Srpska entity have 
to  fully  cover  connection  costs,  while  renewable  energy  producers  in  the  Federation  entity 
cover 50% of the calculated average value of the connection costs. 

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Bosnia  and  Herzegovina  has  expressed  interest  to  join  the  Energy  Community  regional 
initiative to establish an electronic system for guarantees of origin.  It is encouraged to sign a 
direct agreement with the service provider to use electronic registers for issuance, cancellation 
and trade of  guarantees of origin  as provided in  the related regional  project  implemented in 
the Energy Community and in line with the EU standards. 

On  energy  efficiency,  no  progress  has  been  made  in  harmonising  the  legislation  with  EU 
requirements. The Brčko District adopted in July 2022 a Law on energy efficiency. 

Bosnia made no progress on nuclear energy, nuclear safety and radiation protection. The 
country has no nuclear sites in its territory nor plans to build any. The country should consider 
becoming a member of the European Community Urgent Radiological Information Exchange 
system  (ECURIE). Bosnia and Herzegovina should  increase the administrative capacity and 
financial resources of the State Regulatory Agency for Radiation and Nuclear Safety, to meet 
international commitments on data submission and improve coordination and reporting.  

Chapter 21 - Trans-European Networks 

The  EU  promotes 
transport, 
telecommunications  and  energy  to  strengthen  the  internal  market  and  contribute  to  growth 
and employment. 

trans-European  networks 

the  areas  of 

(TEN) 

in 

Bosnia  and  Herzegovina  has  achieved  some  level  of  preparation  in  the  area  of  trans-
European  networks.  There  was  limited  progress  in  the  area.  Transport  and  energy 
infrastructures  remain  insufficiently  developed.  The  development  of  the  corridor  Vc 
motorway proceeded, however, the implementation of connectivity reform measures remains 
slow. Therefore, the recommendations from previous reports remain valid. 

In the coming year, Bosnia and Herzegovina should in particular:  

  continue with the development of the indicative extension of the TEN-T and TEN-E core 
networks in line with the priorities identified in the Economic and Investment Plan for the 
Western Balkan, the Green Agenda and the Transport Community five-year rolling work 
plan for the development of the indicative TEN-T extension in the Western Balkans;  

  accelerate  the  implementation  of  connectivity  reform  measures  and  continue  with  the 
adoption of the multiannual maintenance plans for the entire road and rail core networks;  

  align  the  legislation  with  regulation  (EU)  347/2013  on  guidelines  for  trans-European 

energy infrastructure. 

On transport networks, Bosnia and Herzegovina should increase active participation in the 
Transport Community meetings and intensify cooperation. In addition to the four action plans 
for rail, road, transport facilitation and road safety, the Transport Community Treaty (TCT) 
Ministerial  Council  endorsed  the  action  plan  on  waterborne  transport  and  multimodality  in 
July 2021. The country should invest more efforts and resources to achieve the targets set in 
the action plans and to implement the TCT.  

Bosnia  and  Herzegovina  should  accelerate  the  implementation  of  connectivity  reform 
measures and aim to continue with the adoption of the multiannual maintenance plans for the 
entire road  and rail core networks.  Border crossing  agreements with  neighbouring  countries 
remain a challenge; more efforts are required to strengthen mutual relations and cross border 
cooperation.  

A  revision  of  the  indicative  TEN-T  core  and  comprehensive  network  is  under  discussion. 
Priority connectivity projects on the indicative TEN-T core network to the Western Balkans 
the 
have  been  planned 

the  single  project  pipeline.  The  preparation  and 

through 

103 

 
 
implementation  of  these  projects  continued  during  the  reporting  period.  In  relation  to  the 
Corridor  Vc  motorway,  works  on  Rudanka  –  Putnikovo  Brdo  and  Poprikuse  –  Nemila 
subsections  started  while  in  several  subsections  work  was  completed:  the  Zenica  bypass  in 
July  2021,  the  Svilaj  bridge  and  border  crossing  in  September  2021,  the  Buna  –  Pocitelj  in 
December  2021,  the  Johovac  –  Rudanka  section    in  August  2022    and  the  Tarcin  –  Ivan 
section,  including  the  Ivan  tunnel,  in  October  2022.  The  opening  of  the  border  crossing  in 
Svilaj ensured full functionality of the already finalised 10 km motorway section till Odžak. 
Bosnia and Herzegovina and Croatia now need  to agree on the  category  of border crossing. 
Additional efforts are required to speed up construction, improve preparedness and close the 
financing  gap  to  complete  the  construction  of  the  Corridor  Vc  motorway  in  the  Federation 
entity. As regards the two infrastructural investments located in the Republika Srpska entity 
(Corridor  Vc  road  and  rail),  the  Commission  will  proceed  with  the  signature  of  the 
contribution  agreements  only  after  the  end  of  the  political  crisis,  with  the  return  to  the  full 
functioning of state institutions.    

Construction  of  the  interstate  bridge  between  Bosnia  and  Herzegovina  and  Croatia  at 
Gradiška  was  completed  in  May  2022,  however,  the  border  crossing  is  expected  to  become 
operational only in 2023 upon completion of the access expressway on Croatian territory. A 
serious  effort  is  needed  to  accelerate  progress  in  the  rail  core  network  where  investments 
continue to be limited in particular due to lack of financial support through fuel levies, as it 
was  done  for  roads  and  motorways.  The  navigability  of  the  Sava  River  requires  further 
demining  and  rehabilitation.  A  WBIF  grant  for  demining  the  right  bank  was  approved  in 
December 2020 and work on the rehabilitation of the Brčko Port is progressing. Current and 
future  infrastructure  investments  should  comply  with  the  TEN-T  regulatory  framework,  in 
addition to fulfilling EU standards on public procurement, State aid and environmental impact 
assessments.  

On  energy  networks,  Bosnia  and  Herzegovina  has  not  made  any  progress  related  to  the 
harmonisation  with  Regulation  347/2013  on  guidelines  for 
trans-European  energy 
infrastructure  in  the  reporting  period;  therefore  the  infringement,  established  by  the  Energy 
Community in November 2018 is still not rectified.  

Bosnia and Herzegovina should finalise the Single Project Pipeline to also include the energy 
sector; this will ensure eligibility of the project of Energy Community interest (Trans Balkan 
corridor)  and  the  two  mutual  interest  gas  projects  (North  and  South  interconnectors  with 
Croatia). More efforts are required to accelerate progress for the preparation and development 
of  these  projects.  Tender  documentation  for  the  southern  gas  interconnector  with  Croatia 
(Zagvozd  –  Posušje  –  Novi  Travnik  with  a  branch  to  Mostar)  is  prepared.  Bosnia  and 
Herzegovina remains heavily dependent on carbon-intensive infrastructure and still needs to 
develop its regional connections to unlock the potential of the economic and investment plan 
and the green agenda for the Western Balkans.  

Chapter 27 - Environment and climate change 

The  EU  promotes  strong  climate  action,  sustainable  development  and  protection  of  the 
environment. EU law contains provisions addressing climate change, water and air quality, 
waste  management,  nature  protection,  industrial  pollution,  chemicals,  noise  and  civil 
protection. 

Bosnia  and  Herzegovina  is  at  an  early  stage  of  preparation  /  has  achieved  some  level  of 
preparation  in  the  area  of  environment  and  climate  change.  Limited  progress  was  made, 
mainly at entity level and without countrywide harmonisation. To align with the EU climate 
acquis,  implement  and  enforce  it,  Bosnia  and  Herzegovina  needs  to  reaffirm  its  political 
commitment  and  set  up  the  necessary  administrative  capacities  at  all  levels  of  government. 

104 

 
 
The  country  needs  to  ensure  an  even,  countrywide  harmonised  and  consistent  approach  in 
strategic  planning  and  alignment  with  the  EU  acquis.  Bosnia  and  Herzegovina  significantly 
improved  the  capacity  of  its  civil  protection  system  and  became  a  participating  state  of  the 
Union Civil Protection Mechanism in September 2022. The recommendations from last year 
were not fully addressed and remain valid. 

In the coming year, Bosnia and Herzegovina should in particular:  

  implement  the  countrywide  environmental  approximation  strategy  and  adopt  an 

environmental protection strategy;  

  urgently formalise the procedures for the appointment and functions of the national focal 
point  for  Bosnia  and  Herzegovina  for  the  implementation  of  all  environmental 
conventions to which Bosnia and Herzegovina is a signatory;  

  continue implementing the Paris Agreement by putting in place policies and measures to 
deliver on its updated nationally determined contribution (NDC), adopt and implement the 
revised climate change adaptation and low emissions development strategy, and adopt an 
integrated national energy and climate plan (NECP) in line with the Energy Community 
recommendation. 

Environment  

Horizontal  legislation  is  aligned  with  the  EU  acquis  to  a  limited  extent.  The  sub-sector 
strategies and legislative framework at various levels of government remain non-harmonised, 
leaving the environment sector unevenly regulated across the country. The will and capacities 
to  ensure  countrywide  harmonisation  with  EU  acquis  remain  limited.  The  environment 
approximation strategy still needs to be fully harmonised and implemented requiring a single 
integrated  action  plan.  Bosnia  and  Herzegovina  needs  to  enhance  the  legal  framework, 
strengthen  administrative  capacity  and  monitoring  systems,  and  improve  inter-institutional 
coordination,  in  line  with  the  Green  Agenda  for  the  Western  Balkans  and  the  2050  climate 
neutrality  target.  Bosnia  and  Herzegovina  needs  to  adopt  a  countrywide  environmental 
protection  strategy.  The  provisions  of  environmental  impact  assessment  (EIA)  and  strategic 
environmental  assessment  (SEA)  needs  to  be  aligned  in  the  legislation  at  all  levels  of 
government  and  across  relevant  sectors.  It  needs  to  be  enforced  and  strengthened  together 
with  the  necessary  improvements  in  the  access  to  information  and  the  participation  of  the 
public  in  the  decision-making  process  on  planned  investments.  A  strategy  on  gathering, 
transferring  and  reporting  of  environmental  data  still  needs  to  be  adopted.  The  legal 
framework regulating environmental inspections and its enforcement needs to be improved in 
line  with  the  EU  acquis.  Progress  in  aligning  with  a  number  of  horizontal  environmental 
directives such as the directive on environmental liability, the directive on infrastructure for 
spatial  information  (INSPIRE)  and  the  directive  on  environmental  crime  is  still  necessary. 
The  long  overdue  requirement  for  formalising  procedure  for  appointment  of  national  focal 
points concerning the implementation of environmental conventions to which the country is a 
signatory party,  is still to be met.  

Alignment with the EU acquis on air quality remains limited A well-functioning harmonised 
air  monitoring  network  needs  to  be  established  to  be  able  to  provide  reliable  data  together 
with  a  programme  for  air  quality  improvement.  The  alignment  with  the  EU  directive  on 
reduction  of  national  emissions  of  certain  atmospheric  pollutants,  the  establishment  of  a 
functional  national  emission 
inventories  and  reporting,  and  full  ratifications  and 
implementation of the Air Convention and its protocols are still pending. The country remains 
in serious and persistent breach of the Energy Community Treaty on alignment with the EU 
acquis on reducing the sulphur content of certain liquid fuels, on which sanctions are applied 

105 

 
 
since  January  2021.  Alignment  with  EU  acquis  on  volatile  organic  compounds  (VOC)  is 
lagging behind.  

A  countrywide  strategy  for  waste  management  with  a  particular  attention  to  the  circular 
economy  context,  the  EU  plastic  strategy  and  single-use  plastics  directive  still  needs  to  be 
developed. To align with  the landfill  directive, the country needs  close down or rehabilitate 
non-compliant landfills. Awareness-raising measures are required to reduce waste generation 
and promote reuse and recycling. Alignment is  furthermore required with the EU  acquis  on 
sewage  sludge,  batteries,  packaging,  polychlorinated  biphenyls/  polychlorinated  terphenyls 
and end-of-life vehicles. 

On  water  quality,  a  consistent  and  harmonised  countrywide  strategy  and  sustainable 
investment  plan  on  water  management  and  urban  waste  water  management  is  still  missing. 
Specific  plans  for  implementing  EU  legislation  on  drinking  water,  urban  waste  water  and 
flood risk management still need to be adopted. A roof report for Bosnia and Herzegovina, on 
river basin  management  plans still needs to  be adopted, as well as  a revised action plan for 
flood  protection  and  river  management.  Flood  hazards  and  risks  are  being  mapped  for  the 
entire country. 

There  is  no  progress  on  alignment  with  the  EU  acquis  on  nature  protection.  The  list  of 
potential  Natura  2000  sites  and  implementing  legislation  still  needs  to  be  adopted. 
Investments  in  renewable  energy  need  to  comply  with  all  relevant  EU  acquis,  including 
nature  one  (see  chapter  15  -  Energy).  A  system  to  systematically  monitor  biodiversity  still 
needs  to  be  established.  While  Bosnia  and  Herzegovina  reports  to  the  Convention  on 
international 
in  endangered  species  of  wild  fauna  and  flora  (CITES),  full 
implementation of the Convesntion and capacity building need to be strengthened. Bosnia and 
Herzegovina  should  prepare  the  legislation  and  establish  the  conditions  for  ratification  and 
implementation of the Nagoya Protocol on access to genetic resources and fair distribution of 
profits generated by their use. 

trade 

There is no progress on alignment with the EU  acquis on industrial pollution control and 
risk management. The pollutants release and transfer register (PRTR) protocol to the Aarhus 
Convention  still  needs  to  be  ratified.  This  includes  obligation  to  report  to  PRTR  at  country 
level, enabling public access to and integration of the collected data and its transmission to the 
EU  institutions.  Bosnia  and  Herzegovina  needs  to  ensure  implementation  of  the  National 
Emissions Reduction Plan (NERP) and adopt technical and financial measures necessary for 
that  purpose.  Bosnia  and  Herzegovina  still  needs  to  further  align  with  the  directives  on 
industrial  emissions,  eco-labelling  and  eco-management  and  audit  schemes.  It  should  also 
align  with  the  directive  on  the  control  of  major-accident  hazards  involving  dangerous 
substances (Seveso III). 

On  chemicals,  the  country’s  alignment  with  the  EU  Registration,  Evaluation,  Authorisation 
and Restriction of Chemicals (REACH) Regulation remains uneven. Alignment with the EU 
regulation  on  classification,  labelling  and  packaging  of  substances  and  mixtures  (CLP)  and 
appointment  of  the  responsible  bodies  to  formulate  the  necessary  preventive  and  remedial 
measures are needed. Bosnia and Herzegovina needs to align with EU acquis on asbestos and 
on the protection of animals used for scientific purposes. The country also needs to implement 
the  Rotterdam  convention  on  the  prior  informed  consent  procedure  for  certain  hazardous 
chemicals and pesticides in international trade, to which Bosnia and Herzegovina is a party. 
There has been no progress in acceding to the Minamata Convention. 

Significant further efforts are still needed to align with the EU acquis on environmental noise.  

106 

 
 
In recent years Bosnia and Herzegovina made significant progress in building the capacity of 
its  civil  protection  system  at  local  and  entity  levels.  Bosnia  and  Herzegovina  managed  to 
deliver and show a clear commitment in the area of disaster management and in  September 
2022 joined the Union Civil Protection Mechanism (UCPM) as a full member with the same 
rights as the Member States. The county needs to keep developing its capacities and proceed 
with establishing a secure Trans-European Services for Telematics between Administrations 
(sTESTA) as a precondition to be connected to the Common Emergency Communication and 
Information  System  (CECIS)  of  the  European  Commission,  improve  legislation  for 
preparedness and response and strengthen governance and procedures for developing national 
risk assessment.  Bosnia and Herzegovina should speed up the implementation of  the 2020-
2025 action plan on civil protection. It should improve coordination among entities and Brčko 
District,  develop  a  comprehensive  training  programme  for  emergency  response  units  and 
ensure  systematic  inspections.  Bosnia  and  Herzegovina  still  needs  to  establish  the  112 
European single emergency number. 

Climate change 

The level of alignment with the EU climate acquis remains limited. Bosnia and Herzegovina 
needs to adopt a countrywide climate strategy to align with the new EU climate  acquis, and 
develop a state-level framework law on climate change. Following the adoption of the Green 
Agenda  action  plan  in  October  2021,  Bosnia  and  Herzegovina  should  prepare  the 
harmonisation with the EU Emissions Trading System (ETS) and prioritise the alignment with 
the  new  governance  regulation.  The  country  still  needs  to  adopt  and  implement  a  national 
adaptation  plan  and  a  national  climate  change  adaptation  and  low  emission  development 
strategy consistent with the EU 2030 framework on climate and energy policies.  The country 
should  finalise  the  preparation  of  the  national  energy  and  climate  plan  (NECP)  2021-2030, 
which  will  replace  the  national  energy  efficiency  action  plan.  The  country  needs  to 
significantly  reinforce  its  administrative  capacities  to  ensure  meaningful  implementation  of 
the required measures. 

Bosnia  and  Herzegovina  needs  to  step  up  the  implementation  of  its  revised  Nationally 
Determined  Contribution  for  2020-2030  (NDC)  submitted  in  2021  to  the  UN  Framework 
Convention on Climate Change. It plans to reduce greenhouse gas emissions for slightly more 
than one third by 2030, and almost two thirds by 2050 compared to 1990. There has been no 
progress  in  aligning  with  the  EU  monitoring  and  reporting  regulation.  There  is  no  national 
greenhouse  gas  emissions  inventory  system  and  no  state-level  legal  framework  regulating 
this.  There  is  no  progress  in  aligning  with  the  directives  on  fuel  quality,  ozone  depleting 
substances, fluorinated gases, carbon capture and storage as well as other relevant legislation. 
Following ratification of the Kigali  amendment  to the Montreal  Protocol  on substances that 
deplete  the  ozone  layer,  the  country  is  required  to  freeze  hydrofluorocarbon  production  and 
use in 2024, with an 80% reduction by 2045.  

CLUSTER 5: RESOURCES, AGRICULTURE AND COHESION  

This  cluster  covers  chapters  11  -  Agriculture  and  rural  development;  12  -  Food  safety, 
veterinary  and  phytosanitary  policy;  13  -  Fisheries;  22  -  Regional  policy  &  coordination  of 
structural instruments; and 33 - Financial & budgetary provisions.  

While  implementing  the  2018-2021  strategic  plan  for  rural  development,  Bosnia  and 
Herzegovina  must  step  up  its  efforts  to  adopt  a  post  2021  countrywide  strategy  for  rural 
development.  The  country  has  yet  to  adopt  the  state-level  laws  on  wine  and  on  organic 
production,  and  harmonise  across  the  country  the  legislation  on  quality  policy.  The  country 
needs  to  align  the  legislation  on  food  safety,  veterinary  and  phytosanitary  policy  and 
strengthen  its  administrative  capacities;  in  particular,  it  should  speed  up  preparations  for 

107 

 
 
national  reference  laboratories,  provide  an  updated  National  Salmonella  Control  Plan  and 
maintain the vaccination against rabies and brucellosis. Bosnia and Herzegovina must step up 
its  efforts  to  prepare  and  adopt  a  countrywide  strategy  on  fisheries  and  aquaculture  and 
harmonise  data  collection.  It  should  start  preparing  a  countrywide  regional  development 
strategy,  improve  public  investment  planning  and  develop  a  single  project  pipeline  in  all 
relevant sectors. It should take steps to ensure the management of own resources, notably by 
reinforcing  the  capacity  of  the  Indirect  Tax  Authority  to  effectively  implement  customs 
legislation, stepping up the fight against tax and customs fraud, and adopting a master plan for 
the production of national accounts. 

Chapter 11 - Agriculture and rural development 

The  common  agricultural  policy  (CAP)  supports  farmers  and  rural  development.  This 
requires  strong  management  and  control  systems.  There  are  also  common  EU  rules  for 
quality policy and organic farming. 

Bosnia  and  Herzegovina  is  at  an  early  stage  of  preparation  in  the  area  of  agriculture  and 
rural  development.  There  was  no  progress  in  implementing  last  year’s  recommendations. 
Bosnia  and  Herzegovina  is  unevenly  implementing  the  2018-2021  strategic  plan  for  rural 
development  and  has  not  yet  made  any  significant  steps  in  the  adoption  of  a  post-2021 
strategic plan; it still needs to adopt state-level laws on organic production and on wine and 
update  the  legislation  on  quality  policy,  all  in  line  with  the  EU  acquis.  The  2021 
recommendations remain valid.  

In the coming year, Bosnia and Herzegovina should in particular: 

   complete  the  implementation  of  the  2018-2021  strategic  plan  for  rural  development,  in 
particular by harmonising rural development programmes and support measures across the 
country  and  aligning  them  with  the  EU  acquis,  and  adopt  a  countrywide  strategy    for 
agriculture and rural development 2022-2027; 

  Adopt state-level law on organic production and on wine, in line with the EU acquis; 

  update and adopt a state-level law on quality policy, in line with the EU acquis. . 

Concerning  horizontal  issues,  the  necessary    administrative  structures  required  for  the 
common agricultural policy (CAP), including a paying agency, were not established and there 
was  no  progress  in  developing  elements  of  an  integrated  administration  and  control  system 
(IACS)or a farm accountancy data network (FADN). The country needs to improve the sector 
coordination and strengthen administrative capacities at all levels of the government. For the 
country  to  benefit  from  the  instrument  for  pre-accession  assistance  for  rural  development 
(IPARD)  programme,  the  authorities  need  to  agree  to  set-up  the  necessary  institutional 
structures.  Direct  payments  still  need  to  be  aligned  with  the  EU  rules  through  decoupling 
them  from  production  and  linking  payments  to  cross-compliance.  The  country  needs  to 
develop farm advisory services.  

As  regards  common  market  organisation  (CMO),  there  was  no  progress  in  preparing  and 
setting  up  the  regulatory  framework  in  line  with  the  EU  acquis.  The  country  still  needs  to 
adopt a state-level law on wine. The setting-up of a register of grapes and wine producers and 
a vineyard register is still pending.  

Bosnia and Herzegovina made no progress  in  harmonising  rural  development programmes 
and support measures. The relevant levels of the government should address it in their policy 
implementation without further delay.  

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 Reporting on the implementation of the 2018-2021 strategic plan for rural development needs 
to progress the last reports produced related to 2018. The system of collection and processing 
of  data  for  planning  of  agriculture  and  rural  development  policies,  its  implementation, 
monitoring  and  reporting  needs  to  substantially  improve.  A  countrywide  Strategic  Plan  for 
agriculture and rural development 2022-2027remains to be adopted.  

No progress was noted on quality policy. The legal framework remains to be improved and 
harmonised  with  relevant  EU  acquis,  in  particular  concerning  wine  and  spirit  drinks,  and  a 
clear distribution of competences needs to be ensured.  

There was no progress on organic farming. The state level-law still needs to be developed in 
line  with  EU  acquis  and  the  regulatory  framework  harmonised  across  all  levels  of  the 
government. Support measures remain unevenly implemented across the country. 

Chapter 12 - Food safety, veterinary and phytosanitary policy 

EU hygiene rules for  foodstuff  production ensure a high  level  of  food  safety. Animal health 
and welfare, and the safety of food of animal origin are safeguarded together with the quality 
of  seeds,  plant  protection  material,  protection  against  harmful  organisms  and  animal 
nutrition. 

Bosnia and Herzegovina has some level of preparation in this area. No progress was noted. 
The country still needs to align with the EU  acquis, particularly as regards official controls, 
animal  health  and  plant  health.  The  administrative  capacities  of  laboratories  should  be 
strengthened  as  well  as  official  controls.  To  ensure  alignment  with  the  EU  acquis,  the 
country’s  central  databases  and  animal  registers  require  further  improvements.  As  the  2021 
recommendations have not been implemented, they remain valid.  

In the coming year, Bosnia and Herzegovina should in particular: 

  introduce  inter-laboratory  comparative  tests  as  a  regular  practice,  particularly  between 
laboratories  in  the  country  that  are  in  charge  of  the  analysis  of  samples  for  notifiable 
diseases, to increase controls and administrative capacity, especially of inspection services 
and laboratories; 

  speed up preparations for national reference laboratories, through further alignment with 
the  acquis,  and  notably  by  increasing  the  accreditation  of  laboratory  methods  used  in 
hygiene, veterinary and phytosanitary controls, food and feedstuff analysis; 

  adopt the OECD seed schemes, notably for agricultural seeds and forestry material; 

  provide an updated national salmonella control plan, and  maintain the vaccination against 

rabies and brucellosis and reinforce monitoring and surveillance measures. 

In the area of general food safety, food safety rules and specific rules for feed, Bosnia and 
Herzegovina needs to step up its efforts in improving its system to fulfil the public and animal 
health  requirements  for  the  export  of  bovine,  ovine  and  caprine  meat.  Regarding  animal 
health, Bosnia and Herzegovina needs to strengthen its official control system, notably for the 
registration  of  farm  holdings  and  the  deregistration  of  holdings  that  are  no  longer  active  as 
well  as  the  reliability  of  livestock  numbers  and  species  present  on  active  holdings.  Further 
improvement  as  regards  the  reliability  of  information  of  the  central  database  for  animal 
identification  is  necessary.  The  passive  surveillance  of  notifiable  diseases  needs  to  be 
strengthened,  notably  when  it  comes  to  early  detection  system  and  awareness  raising  of 
farmers. The inter-laboratory comparative tests within the country needs to be set-up so that 
all laboratories can take part in disease validation and verification on a regular basis. The full 
national reference laboratories system is still not in place. To further align with the EU acquis, 

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Bosnia and Herzegovina must accelerate the setting-up of national reference laboratories for 
food and feedstuff, hygiene, veterinary and phytosanitary controls, notably by increasing the 
accreditation  of  laboratory  methods  used  for  these  controls.  The  country  has  to  meet  the 
criteria for export of table eggs to the EU and ensure that its National Salmonella Control Plan 
(NSCP) is updated and aligned with the EU acquis and fully implemented.  

this  disease 

is  considered  eradicated  and 

Bosnia and Herzegovina needs to accelerate alignment of its legislation with the EU acquis, 
notably the state-level laws on food  and veterinary medicine, the  new law on animal  health 
and  the  state-level  legislation  on  the  official  controls,  and  should  ensure  its  effective 
implementation. The hygiene package is still not implemented in a harmonised manner across 
the country. The country has to improve the implementation of its  veterinary policy on the 
control, prevention and eradication of communicable animal diseases and enhance monitoring 
and surveillance on brucellosis and rabies. Bosnia and Herzegovina needs to continue rabies 
vaccination  campaigns  until 
should 
take full ownership of these campaigns, as of autumn 2023 in line with the EU acquis. Bosnia 
and  Herzegovina  must  ensure  that  the  contingency  plan  and  the  surveillance  plan  related  to 
classical  swine  fever  are  in  place.  The  country  has  to  improve  and  harmonise  its  system  of 
managing  animal  disease  notification  and  outbreak  information.  Although  the  country's 
residue  monitoring  plan  is  being  implemented,  it  needs  to  become  more  effective.  The  EU 
audit  on  the  control  of  residues  and  contaminants  in  live  animals  and  animal  products 
including  controls  on  veterinary  medicinal  products  took  place  in  October  2021.  Following 
the audit report recommendations, Bosnia and Herzegovina prepared an action plan aiming at 
enhancing  the  implementation  of  control  measures  in  place,  notably  on  the  effective 
implementation  of  the  plan,  identifying  the  shortcomings  in  delivery  of  samples,  analytical 
method  validation  files  and  deficient  internal  quality  control  procedures.  However,  one 
remaining recommendation on the effective quality control procedures and on monitoring the 
validity of analytical results to guarantee their reliability still needs to be urgently tackled.  

The  country’s  laboratories  generally  have  satisfactory  capacities.  Staffing,  equipment  and 
accredited laboratory methods for diagnosing animal diseases needs to  be increased.  Bosnia 
and  Herzegovina  needs  to  improve  the  setting  up  of  its  central  animal  identification  and 
registration systems for sheep, goats, pigs and horses. 

Bosnia and Herzegovina needs to align its official food and feed control system with the EU 
acquis,  concerning the placing on the market of food,  feed and animal  by-products, and 
strengthen its administrative capacities at all levels of the government. This is particularly true 
for the inspection services and laboratories, for which inter-laboratory comparative tests need 
to  be  introduced.  The  country  still  needs  to  further  align  these  sectors  with  the  acquis  and 
fully implement its strategy for management of animal by-products.   

In  the  area  of  phytosanitary  policy,  to  align  with  the  EU  acquis,  Bosnia  and  Herzegovina 
needs to undertake the necessary reforms and adopt crucial state-level laws, notably the new 
Plant Health Law and state level legislation on official controls. 

The  country  continues  to  implement  its  programme  for  special  surveillance  of  quarantine 
pests  for  potatoes.  Although  the  registration  of  plant  operators  in  a  single  phyto-registry 
continues,  no  progress  has  been  made  on  issuing  plant  passports.  The  OECD  seed  schemes 
are yet to be adopted. The country has not yet fulfilled the EU acquis requirements of setting 
up its laboratories as reference laboratories providing phyto-sanitary controls. The principles 
of integrated pest management remain to be implemented in a harmonised manner.  

There were no developments in the area of genetically modified organisms (GMOs). Bosnia 
and  Herzegovina  still  needs  to  ensure  alignment  with  the  EU  acquis,  harmonise  legislation 
across the country and ensure its effective implementation. Inspection services at all levels of 

110 

 
 
the  government  are  to  be  strengthened.  There  was  no  progress  in  setting  up  the  country’s 
reference laboratory for testing, controlling and monitoring the presence of GMOs in food and 
feed.  

Chapter 13: Fisheries 

The  common  fisheries  policy  lays  down  rules  on  fisheries  management,  protects  living 
resources  of  the  sea  and  limits  the  environmental  impact  of  fisheries.  This  includes  setting 
catch  quotas,  managing  fleet  capacity,  rules  on  markets  and  aquaculture,  and  support  for 
fisheries and coastal communities. 

Bosnia  and  Herzegovina  is  at  an  early  stage  of  preparation  in  this  area.  There  was  no 
progress.  The  country  still  needs  to  prepare,    adopt  and  implement  a  countrywide  fisheries 
and acquaculture strategy in line with EU acquis. As the recommendations of 2021 were not 
implemented, they remain valid.  

In the coming year, Bosnia and Herzegovina should in particular: 

  prepare and adopt a countrywide strategy on fisheries and aquaculture in view of aligning 

the legislation with the EU acquis; 

  harmonise  the  methodology  for  data  collection  for  fish  and  fishery  products  across  the 

country, and establish relevant statistics. 

There  was  no  progress  in  developing  a  countrywide  policy  framework  and  legislation  on 
inland  and  marine  fisheries  in  order  to  prepare  for  the  EU’s  common  fishery  policy  (CFP).  
Preparing  and  adopting  a  countrywide  strategy  and  state-level  legislation  on  fisheries  and 
aquaculture should accelerate, and its harmonisation across the country being ensured. 

Institutional  capacity  and  administrative  structures  needs  to  be  substantially  strengthened.  
There  are  no  specific  structural  actions  in  place  to  support  small-scale  and/or  inland 
fisheries. 

No progress  was  made in setting  up relevant measures  and strengthening the administrative 
capacity to implement resource and fleet management.  Bosnia and Herzegovina still needs 
to  set  up  a  fleet  register  and  the  system  for  management  and  control  of  fishing  activities  in 
line with the EU Common Fishery Policy. On inspection and control, the country still needs 
to  improve  and  harmonise  the  data  on  catches  and  landings  per  type  of  fishery.  More 
information is required on methodologies and planning for data collection. The country still 
lacks any structural and State aid measure in line with the EU acquis.  

Concerning market policy, marketing standards for certain fishery products are in place, but 
there  was  no  further  progress  including  the  establishment  of  producer  organisations  in  line 
with the EU acquis.  

Regarding international agreements, Bosnia and Herzegovina continues to cooperate on sea 
fisheries with the General Fisheries Commission for the Mediterranean (GFCM), of which it 
is not yet a member, and the UN’s Food and Agriculture Organisation (FAO). As a party to 
the  Malta  MedFish4Ever  Declaration,  the  country  should  contribute  to  its  effective 
implementation. 

Chapter 22 - Regional policy & coordination of structural instruments  

Regional  policy  is  the  EU’s  main  tool  for  investing  in  sustainable  and  inclusive  economic 
growth.  Member  States  bear  responsibility  for  its  implementation,  which  requires  adequate 
administrative capacity and sound financial management of project design and execution. 

Bosnia  and  Herzegovina  remains  at  an  early  stage  of  preparation  in  the  area  of  regional 

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policy and coordination of structural  instruments.  Limited progress was  achieved,  with  the 
adoption,  end  of  June,  of  the  country-wide  public  financial  management  strategy  and  the 
ratification  of  the  IPA  III  Framework  Partnership  Agreement  in  August.  Last  year’s 
recommendations  remain  valid.  In  the  coming  year,  Bosnia  and  Herzegovina  should  in 
particular: 

  start preparing a countrywide regional development strategy; 

  improve public investment  planning and develop  a single project  pipeline in  all relevant 
sectors, and ensure its endorsement by the National Investment Committee and its regular 
update; 

  reach an agreement on coordination modalities for the effective use of pre-accession funds 
while  respecting  the  NIPAC  functions  as  provided  for  in  the  IPA  II  Framework 
Agreement and IPA III Financial Framework Partnership Agreement. 

On  legislative  framework,  Bosnia  and  Herzegovina  still  needs  to  establish  a  system  for 
managing EU structural funds. The country still lacks a number of countrywide strategies in 
fields  relevant  to  cohesion  policy.  There  is  no  sound  countrywide  regional  development 
policy,  with  accompanying  institutional  structure  and  performance  monitoring  framework. 
The  NUTS  II  regions  are  only  provisionally  defined  and  accepted  by  the  European 
Commission  until  Bosnia  and  Herzegovina  finalises  and  agrees  the  entire  classification 
including  definition  of  the  NUTS  III  level.  Bosnia  and  Herzegovina  needs  to  improve  the 
statistical  and  analytical  basis  (including  definition  of  NUTS  regions)  to  develop  sound 
strategic framework for cohesion policy. GDP per capita figures harmonised at NUTS II level 
are  still  to  be  provided.  Existing  budget  laws  allow  for  both  flexibility  and  multi-annual 
budgeting,  but  the  multi-annual  programmes  need  to  be  included  in  a  more  comprehensive 
manner in the entities’ budgets and more consistently across administrative levels. Legislative 
frameworks  establishing  financial  control  and  independent  internal  audit  structures  are  in 
place at both state and entity levels. 

Concerning the institutional framework for planning, IPA, the IPA III Financial Framework 
Partnership  Agreement  has  been  ratified  in  August.  The  authorities  need  to  come  to  an 
agreement  on the coordination modalities for the effective use of pre-accession funds while 
respecting the role of the NIPAC as provided for in the IPA II Framework Agreement and the 
IPA III Financial Framework Partnership Agreement. The role of the NIPAC as coordinator 
of  EU  assistance  and  EU  contact  point  for  the  management  of  EU  funds  needs  to  be 
strengthened. 

Administrative  capacity  including  training  in  key  institutions  managing  EU  funds  is 
insufficient.  The  capacity  for  programming  and  managing  EU  pre-accession  funds  and 
introducing  cohesion  policy  needs  to  be  improved.  To  avoid  an  absorption  shock  at  a  later 
stage, Bosnia and Herzegovina needs to develop a systematic plan such as a management and 
control  system  roadmap  to  help  prepare  administrative capacities to  implement EU regional 
policy.  

Despite  difficulties  stemming  from  the  lack  of  agreement  on  the  way  to  reconcile  the  IPA 
legal  framework  with  the  system  of  coordination  of  European  integration,  Bosnia  and 
Herzegovina’s  authorities  delivered  as  required  on  the  programming  of  IPA  III.  The 
authorities  submitted  the  action  documents  for  the  Programme  IPA  2021  and  IPA  2022. 
However, project preparation and strategic planning capabilities still need to improve in order 
to  secure  full  absorption  capacity  for  IPA  III  programme.  To  this  end,  the  adoption  of  the 
countrywide  public  finance  management  strategy  is  paving  the  way  for  possible  budget 
support operations.  

112 

 
 
The  National  Investment  Committee  needs  to  revise  its  single  project  pipeline  for  the 
environment sector and finalise the ones for the energy sector. 

Bosnia and Herzegovina continues to gain experience in programming and implementation of 
regional  policy  territorial  cooperation  through  the  participation  in  cross  border  cooperation 
and  transnational  and  interregional  cooperation  programmes.  Bosnia  and  Herzegovina  is 
participating  in  the  EU  Strategy  for  the  Adriatic  and  Ionian  Region  (EUSAIR)  and  the  EU 
Strategy for the Danube Region (EUSDR), which promote cooperation and synergies among 
the participating EU and non-EU countries. 

Due  to  the  inaction  of  the  Council  of  Ministers  during  the  political  blockade  by  political 
parties  based  in  the  Republika  Srpska  entity,  the  financing  agreement  for  the  2020  cross-
border cooperation programme with Serbia was not signed by the December 2021 deadline, 
resulting  in  the  loss  of    EUR  1.8  million  of  important  funding  for  the  development  of  the 
border  area.  The  NIPAC  should  take  full  responsibility  for  an  efficient  and  systematic 
coordination of cross-border, transnational and interregional cooperation. 

Regarding  monitoring  and  evaluation,  the  NIPAC  office  should  urgently  strengthen  its 
capacities. 

With  the  exception  of  cross-border  cooperation  programmes,  the  country  is  still  missing  a 
financial  management,  control  and  audit  system  for  EU  funds.  Structures  and  bodies 
defined  in  Annex  A  of  the  Framework  Agreement  under  IPA  II  and  the  IPA  III  Financial 
Framework Partnership Agreement remain to be established. 

Chapter 33 - Financial & budgetary provisions 

This  chapter  covers  the  rules  governing  the  funding  of  the  EU  budget  (‘own  resources’). 
These  resources  mainly  consist  of:  (i)  contributions  based  on  the  gross  national  income  of 
each  Member  State;  (ii)  customs  duties;  (iii)  the  non-recycled  plastic  resource  and  (iv)  a 
resource based on value-added tax. Member States must have the appropriate administrative 
capacity to adequately coordinate and ensure the correct calculation, collection, payment and 
control of own resources.  

Bosnia  and  Herzegovina  is  at  an  early  stage  of  preparation  in  the  area  of  financial  and 
budgetary  provisions.  No  progress  was  made  as  regards  strengthening  administrative 
capacities for coordination and management of own resources. Significant further efforts are 
needed  to  ensure  sound  capacities,  institutional  set-up  and  cooperation  of  institutions  and 
bodies to be involved in application of the own resources system. The recommendations from 
last year remain valid. In the coming year, Bosnia and Herzegovina should in particular: 

  strengthen capacities and inter-agency cooperation to combat tax and customs fraud; 

  reinforce  the  capacity  of  the  Indirect  Tax  Authority  (ITA)  to  effectively  implement 

customs legislation; 

  adopt a master plan for the production of national accounts for Bosnia and Herzegovina. 

There was some progress in the underlying policy areas indirectly affecting the own resources 
system (see Chapters 16 – Taxation, 18 – Statistics, 29 – Customs union, and 32 – Financial 
control).  

There was no progress in improving the capacity of ITA and in implementing an accounting 
system for customs duties to distinguish recovered debts and outstanding debts, in line with 
the EU’s traditional own resources accounting.  

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There was no progress in aligning the VAT law with the EU acquis, in particular as regards 
special schemes and exceptions. 

On Gross National Income (GNI) resource, definitions and accounting rules of ESA 2010 
are  used  for  compilation  of  the  GNI.  There  was  no  progress  in  setting  up  a  common, 
coordinated, and appropriate national accounts system for the whole country. This should be 
given  high  priority.  A  master  plan  for  the  development  of  national  accounts  remains  to  be 
adopted to facilitate development of this system, in line with ESA 2010.   

In  terms  of  administrative  infrastructure,  there  was  no  progress  in  providing  sufficient 
human  and  administrative  resources  to  ensure  the  full  and  correct  application  of  EU  rules 
concerning payments into the EU budget. Better coordination among administrative structures 
and  implementing  rules  are  needed  to  ensure  correct  forecasting,  calculation,  accounting, 
collection, payment and control of own resources.  

CLUSTER 6: EXTERNAL RELATIONS  

This cluster includes  chapters 30 - External relations, which covers the EU’s common trade 
and commercial policy as well as its humanitarian aid  and its development  policy, and 31  - 
Foreign, security and defence policy.  

Bosnia and Herzegovina should implement the action plan for the Common Regional Market 
by  adopting  and  implementing  the  relevant  protocols  to  Central  European  Free  Trade 
Agreement (CEFTA). Bosnia and Herzegovina should finalise its accession to the WTO and 
consider  establishing  a  development  and  humanitarian  aid  policy.  The  country’s  alignment 
with EU foreign policy significantly improved, notably on statements and restrictive measures 
following Russia’s war of aggression against Ukraine, although implementation of sanctions 
remains  a  challenge.  The  country  should  appoint  a  ‘political  director’  and  ‘European 
correspondent’, and reinforce arms control and monitoring regimes. 

Chapter 30 - External relations 

The  EU  has  a  common  trade  and  commercial  policy  towards  third  countries,  based  on 
multilateral and bilateral agreements and autonomous measures. There are also EU rules for 
humanitarian aid and development policy. 

Bosnia  and  Herzegovina  has  reached  some  level  of  preparation  in  the  area  of  external 
relations. There was no progress. The capacity to tackle key challenges in trade policy is yet 
to be strengthened. Bosnia and Herzegovina introduced temporary export restrictions in June 
2022  on  certain  wood  products.  These  decisions  should  be  revoked,  and  Bosnia  and 
Herzegovina  should  abstain  from  taking  unilateral  trade  measures  without  justification  and 
prior  consultation  with  the  Commission  in  line  with  its  obligations  under  the  SAA.  The 
Commission’s recommendations of 2021 were not implemented and remain valid. 

In the coming year, Bosnia and Herzegovina should in particular: 

  finalise its accession to the World Trade Organization (WTO);  

  implement  the  Common  Regional  Market  Action  Plan  2021-2024  in  particular  by 
adopting  CEFTA  Additional  Protocol  (AP)  5  on  trade  facilitation  and  CEFTA  AP  6  on 
trade in  services;  and  negotiate  and ensure a swift adoption of CEFTA AP 7 on dispute 
settlement; 

  start  the  process  leading  to  the  establishment  of  a  development  and  humanitarian  aid 

policy. 

On  the  common  commercial  policy,  no  progress  was  made  on  accession  to  the  WTO, 

114 

 
 
although  membership  negotiations  have  been  at  a  very  advanced  stage  for  some  time.  The 
Russian Federation is the only WTO member that has not completed its bilateral negotiations 
with  Bosnia  and  Herzegovina  on  market  access  for  goods  and  services,  having  raised  one 
outstanding issue on the need to amend the legislation on the quality of liquid petroleum fuels. 
The decision to amend this legislation is yet to be approved by the Council of Ministers. 

Bosnia and Herzegovina needs to adopt CEFTA AP 5 on trade facilitation, and CEFTA AP 6 
on trade in services as soon as possible. In addition Bosnia and Herzegovina should negotiate 
and ensure a swift adoption of the CEFTA AP 7 on dispute settlement and proceed with the 
implementation of the Common Regional Market Action Plan 2021-2024.  

In  June  2022,  Bosnia  and  Herzegovina  introduced  a  3-month  export  ban  for  certain  wood 
the 
products,  without  providing  sufficient 
Commission  in  advance  as  required  under  the  SAA.  This  decision  should  be  revoked,  and 
Bosnia  and  Herzegovina  should  abstain  from  taking  unilateral  trade  measures  without  prior 
consultation with the Commission, in line with its obligations under the SAA. 

justifications  or  notifying  or  consulting 

Bosnia  and  Herzegovina  applies  export  controls  on  dual-use  goods  in  accordance  with  its 
legislation. The framework legislation needs to be aligned with the latest EU acquis, namely 
EU  Regulation  2021/821.  The  country  should  consider  applying  for  accession  to  the 
multilateral export control schemes, such as the Wassenaar Arrangement. 

As regards bilateral  agreements with third  countries, a revised free trade agreement with 
Türkiye entered into force in August 2021, updating and expanding the existing agreement to 
cover services. Bosnia and Herzegovina needs to further strengthen its administrative capacity 
and  improve  cooperation  and  coordination  between  ministries  and  the  different  levels  of 
competent authorities in order to ensure consistency of implementation and enforcement.  

There  were  no  changes  in  the  areas  of  development  policy  and  humanitarian  aid.  The 
country  is  a  recipient  of  aid  programmes  and  has  so  far  provided  humanitarian  aid  only  ad 
hoc,  including  for  Ukraine  following  Russia’s  invasion  in  February  2022.  Bosnia  and 
Herzegovina  is  encouraged  to  start  the  process  of  establishing  a  legal  framework  covering 
international  cooperation  and  development  policy  as  well  as  humanitarian  aid  towards  non-
EU  countries,  in  accordance  with  EU  policies  and  principles,  and  to  build  dedicated 
administrative structures.  

Chapter 31 - Foreign, security & defence policy 

Member States must be able to conduct political dialogues under the EU foreign, security and 
defence policy, align with EU statements, take part in EU actions, and apply agreed sanctions 
and restrictive measures. 

Bosnia  and  Herzegovina  has  some  level  of  preparation  in  the  area  of  common  foreign, 
security and defence policy. There was some progress, as the country significantly improved 
its  alignment  with  the  EU  foreign  policy,  notably  on  statements  and  restrictive  measures 
following Russia’s war  of aggression against Ukraine, upon the initiative of the Ministry of 
Foreign Affairs. As of August 2022, Bosnia and Herzegovina’s alignment rate with relevant 
High  Representative  statements  on  behalf  of  the  EU  and  Council  decisions  on  restrictive 
measures  (sanctions)  was  81%.  Alignment  with  EU  sanctions  remains  a  matter  of  political 
dispute,  and  certain  ministries  have  hindered  the  implementation  of  restrictive  measures. 
Bosnia and Herzegovina is yet to join a number of international arms control regimes as well 
as strengthen the monitoring regime regarding weapons and military equipment. Bosnia and 
Herzegovina continued to participate in EU crisis management missions. 

In the coming year, Bosnia and Herzegovina should in particular: 

115 

 
 
  continue  improving  its  alignment  with  EU  common  foreign  and  security  policy,  and 

ensure the implementation of restrictive measures stemming from EU alignment; 

  develop post-manufacture marking requirements for weapons earmarked for deactivation 

in line with EU standards;  

  improve traceability of seized and confiscated weapons, notably by amending the Law on 

Marking to cover these types of firearms. 

The political dialogue between the EU and Bosnia and Herzegovina on foreign and security 
policy  issues  continued,  including  at  high  level.  In  April  2022,  the  deputy  foreign  minister 
participated in the informal EU-Western Balkans meeting of political directors in Brussels.  

Bosnia  and  Herzegovina’s  2018-2023  foreign  policy  strategy  includes  as  main  goals  and 
priorities  the  following:  full  membership  of  the  EU,  activation  of  the  NATO  Membership 
Action  Plan,  fight  against  terrorism,  cooperation  at  regional  level,  and  bilateral  and 
multilateral cooperation. Its implementation in the reporting period was affected by frequent 
divergent positions among the members of the Presidency.  

Bosnia  and  Herzegovina  still  needs  to  appoint  the  persons  in  charge  of  performing  the 
functions  of  ‘political  director’  and  of  ‘European  correspondent’  within  the  Ministry  for 
Foreign Affairs. Regulations and practices based on ethnic quotas applied in the appointment 
of diplomatic and consular network have a negative impact on the capacity of the Ministry of 
Foreign Affairs, adversely affecting the country’s foreign policy objectives.  

On  Common  Foreign  and  Security  Policy,  Bosnia  and  Herzegovina  has  improved  its 
alignment with EU statements and restrictive measures in respect of actions undermining or 
threatening  the  territorial  integrity,  sovereignty  and  independence  of  Ukraine.  The  country 
joined  a  number  of  EU  statements  at  multilateral  fora  and  restrictive  measures,  upon  the 
political initiative of the Ministry of Foreign Affairs. Alignment with EU sanctions remains a 
matter  of  political  contestation  as  one  member  of  the  Bosnia  and  Herzegovina  Presidency 
advocated  for  a  neutral  stance  on  Russia’s  aggression  against  Ukraine,  which  resulted  in 
significant  hindrances to  their implementation, including not  banning flights from  Russia or 
the  broadcast  of  Russian  state-sponsored  media.  In  2021,  the  country’s  alignment  rate  with 
relevant High Representative statements on behalf of the EU and Council Decisions was 38%. 
Its  alignment  increased  to  81%  by  end  August.  In  2022,  the  country  did  not  align  with  EU 
Council  decisions  and  declarations  related  to  the  Russian  Federation  (in  one  case),  China, 
Iran, and Syria.  Bosnia  and Herzegovina should maintain and further improve its alignment 
rate to  signal  its commitment to  the EU path.  Bosnia and Herzegovina aligned with  the EU 
position in the United Nations General Assembly on Russia’s aggression against Ukraine and 
its humanitarian impact, and voted to suspend Russia from the UN Human Rights Council. 

Bosnia  and  Herzegovina  ratified  the  Rome  Statute  of  the  International  Criminal  Court 
(ICC)  in  2002;  the  ratification  of  the  Kampala  amendments  is  pending.  There  were  no 
procedures  requiring  cooperation  with  the  Court  during  the  reporting  period.  The  country 
maintains  a  bilateral  immunity  agreement  with  the  United  States,  granting  US  citizens 
exemptions from the jurisdiction of the International Criminal Court. In doing so, the country 
does  not  comply  with  the  EU  common  positions  on  the  integrity  of  the  Rome  Statute  or 
related  EU  guiding  principles  on  bilateral  immunity  agreements.  Alignment  with  the  EU 
position is therefore needed. 

Bosnia and Herzegovina supports all EU measures and instruments for  conflict prevention, 
acts in accordance with the principles of the UN Charter and rules of international law, and 
fully supports the EU programme for the prevention of violent conflicts.  

116 

 
 
On  non-proliferation,  Bosnia  and  Herzegovina  is  yet  to  join  international  control  regimes 
such  as  the  Wassenaar  Arrangement,  the  Australia  Group,  the  Missile  Technology  Control 
Regime and the Nuclear Suppliers Group.  

With  regard  to  trade  in  conventional  weapons,  military  equipment  and  dual-use  items,  the 
country’s  overall  legal  and  institutional  framework  is  broadly  in  line  with  the  EU  acquis. 
Further improvements are required regarding the monitoring regime of WMEs produced and 
traded within the country.  

Bosnia  and  Herzegovina  is  party  to  the  Chemical  Weapons  Convention.  Legislation  on  the 
implementation  of  the  Convention  on  the  Prohibition  of  the  Development,  Production, 
Stockpiling and use of Chemicals and on their Destruction is in place, together with a state-
level coordination body.  

Bosnia  and  Herzegovina  remained  actively  engaged  in  the  implementation  of  the  2018 
Regional Roadmap for a sustainable solution to the illegal possession, misuse and trafficking 
of small arms and light weapons and their ammunition in the Western Balkans. The country 
should  demonstrate  progress  on  implementing  the  2021-2024  strategy  and  action  plan  for 
control  of  small  arms  and  light  weapons  (SALW).  All  weapons  of  the  country’s  security 
forces are to be marked and registered into a single registry to ensure adequate traceability of 
small arms and light weapons in the country. The marking and registration of the 62 000 small 
arms  and  light  weapons  held  by  the  Armed  Forces  of  Bosnia  and  Herzegovina  is  now 
complete.  Bosnia  and  Herzegovina  is  to  develop  post-manufacture  marking  and  record-
keeping  requirements  for  seized  and  confiscated  weapons,  and  weapons  earmarked  for 
deactivation.  

Regarding  cooperation  with  international  organisations,  Bosnia  and  Herzegovina  is  a 
member  of,  and  actively  participates  in  the  work  of  major  international  organisations, 
including the United Nations, the Council of Europe, and OSCE. Bosnia and Herzegovina has 
been  participating  in  NATO’s  Membership  Action  Plan  (MAP)  since  2019.  Bosnia  and 
Herzegovina  was  elected  as  a  member  of  the  Council  of  Administration  of  the  Universal 
Postal Union in August 2021, while its four-year membership (2017-2021)  in the UNESCO 
World Heritage Committee ended in 2021. 

In  terms  of  security  measures,  Bosnia  and  Herzegovina  continued  to  implement  the 
agreement on security procedures for the exchange of classified information between the EU 
and Bosnia and Herzegovina, in force since 2006.  

The lack of funding and a centralised  and dysfunctional  procurement  system for the Armed 
Forces  also  critically  affect  their  demining  battalion,  which  is  an  essential  partner  for  the 
success  of  the  mine  action  strategy  2018-2025.  The  European  Peace  Facility  supports  the 
demining  battalion  in  purchasing  new  vehicles  and  metal  detectors.  The  mine  action 
authorities (Demining Commission and BH Mine Action Centre) need to develop and adopt 
the bylaws and standard operating procedures required by the new land release method. 

Regarding  the  common  security  and  defence  policy  (CSDP),  Bosnia  and  Herzegovina 
established  a  framework  with  the  EU  for  the  country's  participation  in  both  civilian  and 
military crisis management missions and operations. Three members of the Armed Forces of 
Bosnia and Herzegovina were deployed in the EU Training Mission (EUTM) in the Central 
African Republic until July 2022. Bosnia and Herzegovina also took part in UN missions in 
the Democratic Republic of Congo and in Mali. 

On hybrid threats, the EU has offered the hybrid risk survey to Bosnia and Herzegovina to 
identify key vulnerabilities and address them through EU assistance; so far, the government 
has not expressed interest in participation. The country does not have an overall assessment 

117 

 
 
regarding hybrid threats, nor a policy framework for addressing hybrid threats. Banja Luka-
based  provider  M-tel  continued  to  carry  the  signal  of  the  RT  and  Sputnik  channels,  despite 
Bosnia and Herzegovina’s alignment with EU sanctions on Russia prohibiting the broadcast 
of content from these Russian state-sponsored media outlets. 

118 

 
 
 
ANNEX I – Implementation of the 14 key priorities 

Opinion key priorities 

Implementation 

Municipal elections held in Mostar in December 
2020.  

First SAPC held in 2021 following adoption of 
rules of procedure, although without adoption of 
recommendation. No SAPC held in 2022. 

National war crimes processing strategy adopted 
in September 2020  

(1) Ensure that elections are conducted in line with European 
standards by implementing OSCE/ODIHR and relevant 
Venice Commission recommendations, ensuring 
transparency of political party financing, and holding 
municipal elections in Mostar. 

(2) Ensure a track record in the functioning at all levels of 
the coordination mechanism on EU matters including 
by developing and adopting a national programme for 
the adoption of the EU acquis. 

(3) Ensure the proper functioning of the Stabilisation and 

Association Parliamentary Committee. 

(4) Fundamentally improve the institutional framework, 

including at constitutional level, in order to: 

  Ensure legal certainty on the distribution of 
competences across levels of government; 

 

Introduce a substitution clause to allow the 
State upon accession to temporarily exercise 
competences of other levels of government to 
prevent and remedy breaches of EU law; 

  Guarantee the independence of the judiciary, 
including its self-governance institution 
(HJPC); 

  Reform the Constitutional Court, including 

addressing the issue of international judges, and 
ensure enforcement of its decisions; 

  Guarantee legal certainty, including by 

establishing a judicial body entrusted with 
ensuring the consistent interpretation of the law 
throughout Bosnia and Herzegovina; 

  Ensure equality and non-discrimination of 

citizens, notably by addressing the Sejdić-Finci 
ECtHR case law; 

  Ensure that all administrative bodies entrusted 

with implementing the acquis are based only 
upon professionalism and eliminate veto rights 
in their decision-making, in compliance with 
the acquis.  

(5) Take concrete steps to promote an environment 

conducive to reconciliation in order to overcome the 
legacies of the war. 

(6) Improve the functioning of the judiciary by adopting 
new legislation on the High Judicial and Prosecutorial 
Council and of the Courts of Bosnia and Herzegovina in 
line with European standards. 

(7) Strengthen the prevention and fight against corruption 
and organised crime, including money laundering and 
terrorism, notably by: 

119 

 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 

 

 

 

adopting and implementing legislation on 
conflict of interest and whistle-blowers’ 
protection; 

ensuring the effective functioning and 
coordination of anti-corruption bodies;  

align the legislation and strengthen capacities 
on public procurement;  

Legislative amendments on public procurement 
adopted in August 2022.  

ensuring effective cooperation among law 
enforcement bodies and with prosecutors’ 
offices; 

demonstrating progress towards establishing a 
track record of proactive investigations, 
confirmed indictments, prosecutions and final 
convictions against organised crime and 
corruption, including at high-level; 

de-politicising and restructuring public 
enterprises and ensuring transparency of 
privatisation processes. 

(8) Ensuring effective coordination, at all levels, of border 
management and migration management capacity, as 
well as ensuring the functioning of the asylum system. 

(9) Strengthen the protection of the rights of all citizens, 

notably by ensuring the implementation of the legislation 
on non-discrimination and on gender equality. 

(10) 

Ensure the right to life and prohibition of torture, 

notably by  

(a) abolishing the reference to death penalty in the 
Constitution of the Republika Srpska entity and 

(b) designate a national preventive mechanism 
against torture and ill-treatment. 

(11) 

Ensure an enabling environment for civil society, 

notably by upholding European standards on freedom of 
association and freedom of assembly. 

(12) 

Guarantee freedom of expression and of the 
media and the protection of journalists, notably by: 

(a) ensuring the appropriate judicial follow-up to 
cases of threats and violence against journalists 
and media workers, and  

(b) ensuring the financial sustainability of the 
public broadcasting system. 

(13) 

Improve the protection and inclusion of 

vulnerable groups, in particular persons with 
disabilities, children, LGBTIQ persons, members of the 
Roma community, detainees, migrants and asylum 
seekers, as well as displaced persons and refugees in line 
with the objective of closure of Annex VII of the Dayton 
Peace Agreement. 

Improvement of migration management  

In October 2019 the Constitutional Court 
repealed the reference to death penalty in the 
Republika Srpska entity constitution. 

Pride marches held regularly since 2020, action 
plan on rights of LGBTIQ persons adopted in 
July 2022, action plan on the social inclusion of 
the Roma adopted in May 2022. 

(14) 

Complete essential steps in public administration 
reform towards improving the overall functioning of the 
public administration by ensuring a professional and de-

All levels of government adopted the action plan 
on public administration reform, a 
comprehensive and countrywide public finance 

120 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
politicised civil service and a coordinated countrywide 
approach to policy making.  

management strategy, and individual strategies 
on public financial management. 

121 

 
 
 
 
 
ANNEX II – RELATIONS BETWEEN THE EU AND BOSNIA AND HERZEGOVINA 

The Stabilisation and Association Agreement (SAA) entered into force in June 2015. Policy 
dialogue in the joint bodies under the agreement was blocked throughout the reporting period. 
The  country  also  participates  in  Economic  and  Financial  Dialogue  between  the  EU  and  the 
Western Balkans and Türkiye, where joint recommendations are adopted at ministerial level. 

The  SAA  and  its  Interim  Agreement,  applied  since  2008,  have  allowed  progressive  trade 
liberalisation  and  mutual  duty-free  access  for  most  goods.  Since  2000  Bosnia  and 
Herzegovina  has  also  been  benefiting  from  autonomous  trade  measures.  The  country  joined 
the Central  European Free Trade Agreement (CEFTA) in  2007. The EU is  the main trading 
partner of Bosnia and Herzegovina, accounting for 64% of the country’s trade in goods (73% 
of exports and 59% of imports), for a total trade volume of EUR 11.8 billion in 2021.  

report.  The  Opinion 

In  February  2016  Bosnia  and  Herzegovina  applied  for  EU  membership  and  in  September 
2016,  the  European  Council  invited  the  Commission  to  submit  its  opinion  on  the  country’s 
application.  In  May  2019  the  Commission  adopted  its  Opinion  (Avis)  and  accompanying 
analytical 
the  areas  of 
democracy/functionality,  rule  of  law,  fundamental  rights,  and  public  administration  reform 
that  Bosnia  and  Herzegovina  needs  to  fulfil  in  order  to  be  recommended  for  opening  EU 
accession negotiations. In December 2019, the EU Council welcomed the Opinion and invited 
the Commission to focus its annual reports on Bosnia and Herzegovina, starting with the one 
in 2020, on the implementation of the key priorities. 

identified  14  key  priorities 

in 

Visa  liberalisation  for  citizens  of  Bosnia  and  Herzegovina  travelling  to  the  Schengen  area 
has  been  in  force  since  December  2010.  A  readmission  agreement  has  been  in  force  since 
2008. The Commission’s fourth report under the visa suspension mechanism in August 2021 
concluded that Bosnia and Herzegovina continues to meet the visa liberalisation benchmarks.  

The  EU  continued  to  deploy  considerable  resources  in  Bosnia  and  Herzegovina  under  the 
common  foreign  and  security  policy  and  the  common  security  and  defence  policy.  The 
enhanced  presence  of  the  combined  Office  of  the  EU  Special  Representative  and  the  EU 
Delegation  in  Bosnia  and  Herzegovina  continued  to  be  instrumental  in  communicating  EU 
priorities to citizens and in implementing the objectives of the EU agenda in key areas. The 
EUFOR  Althea  military  operation  remained  deployed  in  the  country,  retaining  deterrence 
capacity  to  support  a  safe  and  secure  environment.  The  troops  deployed  almost  doubled  in 
February 2022. The UN Security Council extended EUFOR’s mandate until November 2022.  

The  EU  is  the  main  provider  of  financial  assistance  to  Bosnia  and  Herzegovina,  notably 
under  the  Instrument  for  Pre-accession  Assistance  (IPA)  with  a  total  allocation  of  EUR 
565.77 million under IPA II in 2014-2020.  Under the Instrument for Pre-accession Assistance 
2021 – 2027 (IPA III) a first financing decision of EUR 73 million was adopted at the end of 
2021,  providing  support  for  migration  and  border  management,  electoral  process,  energy, 
transport,  employment  and  social  protection,  as  well  as  private  sector  and  regional 
development. The assistance is implemented under direct management by the EU Delegation 
in Sarajevo.   

This  first  set  of  programmes,  complemented  by  a  significant  package  of  multi-country 
programmes,  provides  a  significant  contribution  to  kick-start  the  implementation  of  the 
Economic and Investment Plan for the Western Balkans and the Green Agenda.  

The new activities will add to the on-going programmes under IPA II (2014-2020), which are 
still providing significant support for the social and economic development of the country and 

122 

 
 
 
contribute to advance on the path of reforms. With specific focus on the fundamental sectors, 
progress was made with the finalisation of digitalisation process of fully automatized. Public 
Internal Financial Control reporting, which will support high level decision making processes, 
and the finalisation of IDDEEA’s accreditation process for digital signatures.  

EU  funds  have  continued  to  help  the  country  to  deliver  on  key  sectors  such  as  the  justice 
reform,  migration  management,  employment,  agriculture,  environment  and  private  sector 
development.  Bosnia  and  Herzegovina  benefits  from  a  portfolio  of EUR  394.5  million of 
ongoing/active bilateral IPA funds.  

Bosnia  and  Herzegovina  also  benefits  from  investments  through  the  Western  Balkans 
Investment Framework (WBIF). WBIF has provided close to EUR 284.3 million of grants 
to Bosnia and Herzegovina since 2009, leveraging investments estimated at EUR 3.6 billion. 
The  current  WBIF  portfolio  (including  regional  actions)  amounts  to  EUR  1.077  billion  of 
investments (including EUR 242 million of grants). 

Adopting  countrywide  sector  strategies  remains  a  key  requirement  for  Bosnia  and 
Herzegovina to benefit fully from IPA funding in the future. Bosnia and Herzegovina benefits 
from  the  IPA  multi-country  and  regional  programmes  and  participates  in  three  cross-border 
cooperation programmes, as well as in transnational cooperation programmes.  

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  adopt  the 
required measures.  

The  Commission  set  aside  EUR  70  million  in  grants  from  IPA  II  for  the  Western  Balkan 
partners to reimburse the Member States for the resale of doses they obtained under the EU 
Advance  Purchase  Agreements  with  COVID-19  vaccine  producers,  of  which  Bosnia  and 
Herzegovina received EUR 13.77 million. Bosnia and Herzegovina received over 2.5 million 
doses of COVID-19 vaccines from the EU and its Member States – the highest amount among 
the Western Balkans. This includes 2 234 390 doses from EU Member States in re-sales and 
donations, as well as 332 640 doses via COVAX, which is significantly supported by the EU.  

Bosnia  and  Herzegovina  participates  also 
in  cross-border  cooperation  programmes, 
transnational  cooperation  programmes  and  union  programmes,  such  as  Horizon  2020, 
Creative  Europe,  Fiscalis  2020,  Customs  2020,  Europe  for  Citizens,  Erasmus+,  Third 
Programme for the Union's action in the field of health, and the COSME programme.  

123 

 
 
 
 
 
STATISTICAL DATA (as of 01.09.2022) 

Bosnia and Herzegovina 

Basic data 

Population (thousand) 

Total area of the country (km²) 

National accounts 

Gross domestic product (GDP) (million national currency) 

Gross domestic product (GDP) (million euro) 

GDP (euro per capita) 

GDP per capita (in purchasing power standards (PPS)) 

GDP per capita (in PPS), relative to the EU average (EU-27 = 100) 

Real GDP growth rate: change on previous year of GDP volume (%) 

Employment growth (national accounts data), relative to the previous year (%) 

Labour productivity growth: growth in GDP (in volume) per person employed, relative to the 
previous year (%) 

Unit labour cost growth, relative to the previous year (%) 

**3 year change (T/T-3) in the nominal unit labour cost growth index (2015 = 100) 

Labour productivity per person employed: GDP (in PPS) per person employed relative to EU 
average (EU-27 = 100) 

Gross value added by main sectors 

Agriculture, forestry and fisheries (%) 

Industry (%) 

Construction (%) 

Services (%) 

Final consumption expenditure, as a share of GDP (%) 

Gross fixed capital formation, as a share of GDP (%) 

Changes in inventories, as a share of GDP (%) 

Exports of goods and services, relative to GDP (%) 

Note 

2009 

2016 

2017 

2018 

2019 

3 844 s 

3 516 s 

3 510 s 

3 500 s 

3 492 ps 

2020 

: 

1) 

51 209 w 

51 209 w 

51 209 w 

51 209 w 

51 209 w 

51 209 w 

Note 

2009 

24 799 

12 679 

2016 

29 905 

15 290 

2017 

31 376 

16 042 

2018 

33 444 

17 100 

2019 

35 296 

18 046 

2020 

34 255 

17 514 

3 298 s 

4 349 s 

4 571 s 

4 885 s 

5 168 ps 

: 

7 300 

30.0 s 

-  3.0 

9 000 

30.9 s 

3.1 

9 200 

30.8 s 

3.2 

9 800 

31.6 s 

3.7 

10 400 

32.5 s 

2.8 

10 100 

33.0 s 

-  3.1 

: 

: 

: 

: 

: 

8.3 

20.5 

6.2 

65.0 s 

107.9 

23.7 

-  0.1 

25.0 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

7.5 

22.6 

4.7 

6.6 

23.3 

4.8 

6.9 

23.9 

4.8 

6.6 

23.1 

5.0 

7.0 

23.0 

5.4 

65.1 s 

65.3 s 

64.4 s 

65.3 s 

64.5 s 

99.1 

20.7 

2.3 

36.3 

96.7 

21.9 

3.0 

40.9 

94.3 

22.8 

2.0 

42.6 

93.0 

23.0 

2.2 

40.6 

94.0 

22.4 

1.0 

34.5 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Imports of goods and services, relative to GDP (%) 

Gross fixed capital formation by the general government sector, as a percentage of GDP (%) 

Business 

Industrial production volume index (2015 = 100) 

Number of active enterprises (number) 

Note 

Birth rate: number of enterprise births in the reference period (t) divided by the number of 
enterprises active in t (%) 

Death rate: number of enterprise deaths in the reference period (t) divided by the number of 
enterprises active in t (%) 

People employed in SMEs as a share of all persons employed (within the non-financial 
business economy) (%) 

Value added by SMEs (in the non-financial business economy) (EUR million) 

Total value added (in the non-financial business economy) (EUR million) 

48.7 

: 

2009 

89.9 

: 

: 

: 

: 

: 

: 

53.0 

: 

2016 

104.4 

57.1 

: 

2017 

107.7 

57.3 

: 

2018 

109.5 

55.2 

: 

2019 

103.5 

48.5 

: 

2020 

96.7 

67 205 e 

68 761 b 

68 085 

67 981 

66 873 pw 

: 

: 

11.5 p 

11.1 p 

10.4 p 

9.5 p 

10.3 p 

3.8 p 

72.0 sw 

69.5 bsw 

69.1 sw 

69.1 sw 

5 043 sw 

4 845 bsw 

5 269 sw 

5 780 sw 

: 

: 

: 

: 

7 594 e 

7 681 b 

8 393 

9 040 

8 944 pw 

Inflation rate and house prices 

Note 

2009 

2016 

Consumer price index (CPI), change relative to the previous year (%) 

2) 

-  0.4 w 

-  1.6 w 

**Annual change in the deflated house price index (2015 = 100) 

: 

: 

2017 

0.8 w 

: 

2018 

1.4 w 

: 

2019 

0.6 w 

: 

2020 

-  1.1 w 

: 

Balance of payments 

Note 

2009 

2016 

2017 

2018 

2019 

2020 

Balance of payments: current account total (million euro) 

Balance of payments current account: trade balance (million euro) 

Balance of payments current account: net services (million euro) 

Balance of payments current account: net balance for primary income (million euro) 

Balance of payments current account: net balance for secondary income (million euro) 

Net balance for primary and secondary income: of which government transfers (million euro) 

**3 year backward moving average of the current account balance relative to GDP (%) 

**Five year change in share of world exports of goods and services (%) 

: 

: 

: 

: 

: 

: 

: 

: 

-  727.9 

-  777.3 

-  559.3 

-  503.5 

-  657.5 

- 3 624.6 

- 3 792.2 

- 3 845.5 

- 4 072.6 

- 3 216.3 

1 082.7 

1 191.0 

1 335.6 

1 428.0 

771.9 

20.7 

-  134.6 

-  99.6 

-  59.0 

-  151.2 

1 793.3 

1 958.5 

2 050.2 

2 200.0 

1 938.2 

20.8 

-  5.7 

10.6 

35.9 

-  4.9 

31.5 

15.1 

-  4.3 

30.8 

51.2 

-  3.6 

25.3 

39.6 

-  3.3 

13.8 

Net balance (inward - outward) of foreign direct investment (FDI) (million euro) 

3) 

176.0 w 

281.3 w 

366.8 w 

491.0 w 

277.8 w 

296.8 w 

Foreign direct investment (FDI) abroad (million euro) 

4) 3) 

-  68.5 w 

2.6 w 

88.4 w 

16.4 w 

110.6 w 

67.6 w 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
of which FDI of the reporting economy in the EU-27 countries (million euro) 

Foreign direct investment (FDI) in the reporting economy (million euro) 

of which FDI of the EU-27 countries in the reporting economy (million euro) 

**Net international investment position, relative to GDP (%) 

Year on year rate of change in gross inflow of remittances (in national currency) from migrant 
workers (%) 

5) 

4) 3) 

3) 5) 

4) 

4) 

: 

37.0 w 

59.4 w 

-  14.4 w 

-  25.7 w 

22.7 w 

107.5 w 

283.9 w 

455.2 w 

507.4 w 

388.4 w 

364.4 w 

153.6 w 

229.2 w 

292.7 w 

290.8 w 

109.7 w 

230.5 w 

-  52.3 w 

-  51.1 w 

-  46.4 w 

-  42.2 w 

-  36.6 w 

-  34.6 w 

8.1 sw 

8.2 s 

8.4 s 

8.5 s 

8.5 s 

7.4 s 

Public finance 

General government deficit / surplus, relative to GDP (%) 

General government gross debt relative to GDP (%) 

Total  government revenues, as a percentage of GDP (%) 

Total government expenditure, as a percentage of GDP (%) 

Note 

2009 

-  4.3 w 

25.2 w 

41.7 w 

46.1 w 

6) 

6) 

6) 

2016 

1.2 w 

40.5 w 

42.7 w 

41.5 w 

2017 

2.6 w 

36.1 w 

43.0 w 

40.4 w 

2018 

2.3 w 

34.1 w 

43.0 w 

40.8 w 

2019 

1.9 w 

32.7 w 

42.5 w 

40.6 w 

2020 

-  5.3 w 

36.6 w 

42.1 w 

47.4 w 

Financial indicators 

Note 

2009 

2016 

2017 

2018 

2019 

2020 

Gross external debt of the whole economy, relative to GDP (%) 

4) 

72.1 sw 

71.2 sw 

66.8 sw 

66.0 sw 

63.6 sw 

64.9 sw 

Gross external debt of the whole economy, relative to total exports (%) 

288.5 w 

195.9 w 

163.4 w 

153.9 w 

155.6 w 

186.3 w 

Money supply: M1 (banknotes, coins, overnight deposits, million euro) 

7) 8) 

2 835.5 w 

4 755.5 w 

5 405.6 w 

6 209.7 w 

6 775.2 w 

7 697.6 w 

Money supply: M2 (M1 plus deposits with maturity up to two years, million euro) 

7) 9) 

6 498.1 w 

10 326.9 w 

11 307.9 w 

12 368.7 w 

13 463.7 w 

14 443.5 w 

Money supply: M3 (M2 plus marketable instruments, million euro) 

: 

: 

: 

: 

: 

: 

Total credit by monetary financial institutions to residents (consolidated) (million euro) 

**Annual change in financial sector liabilities (%) 

**Private credit flow, consolidated, relative to GDP (%) 

**Private debt, consolidated, relative to GDP (%) 

Interest rates: day-to-day money rate, per annum (%) 

Lending interest rate (one year), per annum (%) 

Deposit interest rate (one year), per annum (%) 

7) 
10) 

11) 
12) 
13) 

11) 

11) 

14) 
15) 

16) 
17) 

6 996.9 w 

8 794.8 w 

9 419.2 w 

9 962.9 w 

10 620.9 w 

10 403.5 w 

-  2.6 w 

5.5 w 

8.3 w 

9.1 w 

8.0 w 

3.7 w 

-  3.8 w 

63 w 

: 

1.7 w 

58 w 

: 

3.4 w 

58 w 

: 

3.3 w 

58 w 

: 

3.8 w 

59 w 

: 

-  1.2 w 

59 w 

: 

7.93 w 

5.20 w 

4.38 w 

3.79 w 

3.29 w 

3.05 w 

0.28 w 

0.09 w 

0.07 w 

0.05 w 

0.06 w 

0.07 w 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Euro exchange rates: average of period (1 euro = … national currency) 

1.956 

1.956 

1.956 

1.956 

1.956 

1.956 

Trade-weighted effective exchange rate index, 42 countries (2015 = 100) 

**3 year change (T/T-3) in the trade-weighted effective exchange rate index, 42 countries 
(2015 = 100) 

18) 

18) 

98.67 w 

100.87 w 

101.58 w 

103.27 w 

103.35 w 

105.08 w 

0.02 sw 

0.01 sw 

0.00 sw 

0.03 sw 

0.02 sw 

0.03 sw 

Value of reserve assets (including gold) (million euro) 

4) 

3 176.2 w 

4 873.2 w 

5 427.0 w 

5 944.1 w 

6 441.1 w 

7 091.0 w 

External trade in goods 

Value of imports: all goods, all partners (million euro) 

Value of exports: all goods, all partners (million euro) 

Trade balance: all goods, all partners (million euro) 

Note 

2009 

6 317 

2 828 

2016 

8 263 

4 815 

2017 

9 298 

5 653 

2018 

9 855 

6 085 

2019 

9 969 

5 876 

2020 

8 634 

5 379 

- 3 489 

- 3 448 

- 3 646 

- 3 770 

- 4 093 

- 3 254 

Terms of trade (export price index / import price index * 100) (number) 

19) 

: 

101.6 sw 

101.3 sw 

102.7 sw 

102.3 sw 

105.6 sw 

Share of exports to EU-27 countries in value of total exports (%) 

Share of imports from EU-27 countries in value of total imports (%) 

Demography 

Note 

Crude rate of natural change of population (natural growth rate): number of births minus 
deaths (per thousand inhabitants) 

Infant mortality rate deaths of children under one year of age (per thousand live births) 

Life expectancy at birth: male (years) 

Life expectancy at birth: female (years) 

70.6 s 

63.3 s 

2009 

-  0.1 

6.5 

: 

: 

71.0 s 

61.1 s 

2016 

-  1.8 

: 

: 

: 

70.4 s 

60.0 s 

2017 

-  2.0 

: 

: 

: 

72.2 s 

59.7 s 

2018 

-  2.4 p 

: 

: 

: 

72.3 s 

61.1 s 

72.4 s 

60.8 s 

2019 

2020 

: 

: 

: 

: 

: 

: 

: 

: 

Labour market 

Note 

2009 

2016 

2017 

2018 

2019 

2020 

Economic activity rate for persons aged 20–64: proportion of the population aged 20–64 that 
is economically active (%) 

*Employment rate for persons aged 20–64: proportion of the population aged 20–64 that are 
in employment (%) 

Male employment rate for persons aged 20–64 (%) 

Female employment rate for persons aged 20–64 (%) 

Employment rate for persons aged 55–64: proportion of the population aged 55–64 that are 
in employment (%) 

Employment by main sectors 

20) 

57.7 w 

58.8 w 

58.4 w 

58.4 w 

59.0 w 

62.3 bw 

20) 

44.2 w 

44.2 w 

46.6 w 

47.7 w 

49.7 w 

52.5 bw 

20) 

20) 

20) 

56.5 w 

32.3 w 

26.5 w 

56.4 w 

32.0 w 

29.7 w 

58.1 w 

35.1 w 

32.5 w 

59.5 w 

35.8 w 

32.6 w 

61.6 w 

38.0 w 

36.2 w 

64.9 bw 

40.0 bw 

35.4 bw 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agriculture, forestry and fisheries (%) 

Industry (%) 

Construction (%) 

Services (%) 

People employed in the public sector as a share of total employment, persons aged 20–64 
(%) 

People employed in the private sector as a share of total employment, persons aged 20–64 
(%) 

Unemployment rate: proportion of the labour force that is unemployed (%) 

Male unemployment rate (%) 

Female unemployment rate (%) 

20) 

20) 

20) 

20) 

20) 
21) 
22) 

20) 
21) 
22) 

20) 

20) 

20) 

Youth unemployment rate: proportion of the labour force aged 15–24 that is unemployed (%) 

20) 

Long-term unemployment rate: proportion of the labour force that has been unemployed for 
12 months or more (%) 

20) 

: 

: 

: 

: 

17.2 w 

18.0 w 

22.7 w 

8.6 w 

50.8 w 

17.8 w 

18.9 w 

22.2 w 

7.3 w 

51.6 w 

18.4 w 

15.7 w 

23.5 w 

8.7 w 

52.1 w 

18.4 w 

18.0 w 

23.8 w 

7.9 w 

50.3 w 

17.2 w 

12.0 bw 

33.4 bw 

9.4 bw 

45.3 bw 

19.1 bw 

82.8 w 

82.2 w 

81.6 w 

81.6 w 

82.8 w 

80.9 bw 

24.1 w 

23.2 w 

25.7 w 

48.7 w 

20.1 w 

25.5 w 

22.6 w 

30.2 w 

54.3 w 

21.7 w 

20.7 w 

19.0 w 

23.3 w 

45.8 w 

17.0 w 

18.5 w 

17.3 w 

20.5 w 

38.8 w 

15.2 w 

15.9 w 

13.8 w 

19.0 w 

33.8 w 

12.1 w 

15.9 bw 

14.2 bw 

18.6 bw 

36.6 bw 

11.9 bw 

Unemployment rate for persons (aged 25–64) having completed at most lower secondary 
education (ISCED levels 0-2) (%) 

Unemployment rate for persons (aged 25–64) having completed tertiary education (ISCED 
levels 5-8) (%) 

20) 

26.5 w 

26.2 w 

19.5 w 

19.1 w 

: 

19.5 bw 

20) 

9.1 w 

18.9 w 

14.6 w 

13.9 w 

10.9 w 

10.9 bw 

Social cohesion 

Average nominal monthly wages and salaries (national currency) 

Index of real wages and salaries (index of nominal wages and salaries divided by the 
inflation index) (2016 = 100) 

GINI coefficient 

Poverty gap 

Note 

2009 

23) 

790 w 

2016 

838 w 

2017 

851 w 

2018 

879 w 

2019 

921 w 

2020 

956 w 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

: 

*Early leavers from education and training: proportion of the population aged 18–24 with at 
most lower secondary education who are not in further education or training (%) 

20) 

7.4 w 

4.9 w 

5.1 w 

5.4 w 

3.8 w 

4.7 w 

Standard of living 

Note 

2009 

2016 

2017 

2018 

2019 

2020 

Number of passenger cars relative to population size (number per thousand population) 

24) 

180.5 sw 

245.0 sw 

252.0 sw 

263.1 sw 

269.5 psw 

: 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of mobile phone subscriptions relative to population size (number per thousand 
population) 

830.7 ew 

981.1 w 

981.7 w 

989.9 w 

1 075.5 w 

1 010.0 w 

Mobile broadband penetration (per 100 inhabitants) 

Fixed broadband penetration (per 100 inhabitants) 

: 

: 

40.4 w 

43.4 w 

52.7 w 

44.7 w 

46.7 w 

19 w 

19 w 

20 w 

21 w 

22 w 

Infrastructure 

Note 

2009 

2016 

2017 

2018 

2019 

2020 

Density of railway network (lines in operation per thousand km²) 

1) 

19.9 sw 

19.9 sw 

19.9 sw 

19.9 sw 

19.9 sw 

19.9 sw 

Length of motorways (kilometres) 

35 w 

163 w 

172 

198 

208 

218 

Innovation and research 

Note 

2009 

Public expenditure on education relative to GDP (%) 

*Gross domestic expenditure on R&D relative to GDP (%) 

Government budget appropriations or outlays on R&D (GBAORD), as a percentage of GDP 
(%) 

Percentage of households who have internet access at home (%) 

: 

: 

: 

: 

2016 

4.3 sw 

2017 

4.1 sw 

2018 

3.9 sw 

0.24 sw 

0.20 sw 

0.19 sw 

0.04 

0.04 

: 

: 

2019 

4.0 sw 

0.19 

0.09 

72.0 

2019 

: 

2020 

: 

: 

0.09 

73.0 

2020 

: 

0.06 

69.0 

2018 

: 

Environment 

*Index of greenhouse gas emissions,  CO2 equivalent (1990 = 100) 

Energy intensity of the economy (kg of oil equivalent per 1 000 euro GDP at 2015 constant 
prices) 

Electricity generated from renewable sources relative to gross electricity consumption (%) 

Road share of inland freight transport (based on tonne-km) (%) 

25) 

Note 

2009 

69.4 w 

2016 

: 

2017 

: 

: 

448.8 

434.2 

463.4 

435.7 

442.5 

38.9 

: 

40.8 

39.6 

41.5 

45.5 

: 

76.6 w 

78.9 w 

78.7 w 

77.4 w 

78.8 w 

Energy 

Note 

2009 

Primary production of all energy products (thousand TOE) 

Primary production of crude oil (thousand TOE) 

Primary production of solid fuels (thousand TOE) 

Primary production of gas (thousand TOE) 

Net imports of all energy products (thousand TOE) 

Gross inland energy consumption (thousand TOE) 

: 

: 

: 

: 

: 

: 

2016 

4 742 

0 

2017 

4 624 

0 

2018 

5 672 

0 

2019 

5 405 

0 

2020 

5 237 

0 

3 520 

3 612 

3 659 

3 403 

3 329 

0 

0 

0 

0 

0 

2 133 s 

2 299 s 

1 814 s 

1 979 s 

1 806 s 

6 767 

6 754 

7 478 

7 230 

7 109 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross electricity generation (GWh) 

: 

17 767 

16 438 

19 160 

17 493 

16 874 

Agriculture 

Note 

2009 

Agricultural production volume index of goods and services (at producer prices) (2010 = 100) 

: 

2016 

: 

2017 

: 

2018 

: 

2019 

: 

Utilised agricultural area (thousand hectares) 

1 734.5 e 

1 778.8 e 

1 762.0 e 

1 779.6 e 

1 806.3 e 

2020 

: 

: 

Livestock numbers: live bovine animals (thousand heads, end of period) 

Livestock numbers: live swine (thousand heads, end of period) 

Livestock numbers: live sheep and live goats (thousand heads, end of period) 

Raw milk available on farms (thousand tonnes) 

: 

: 

: 

: 

455.0 e 

445.0 e 

438.0 

430.0 e 

427.0 e 

545.0 e 

548.0 e 

542.0 e 

543.0 e 

547.0 e 

1 091.0 s 

1 090.0 s 

1 085.0 s 

1 085.0 s 

1 085.0 s 

: 

: 

: 

: 

: 

Harvested crop production: cereals (including rice) (thousand tonnes) 

1 407.9 e 

1 677.5 e 

1 176.9 e 

1 764.1 e 

1 685.6 e 

1 966.8 e 

Harvested crop production: sugar beet (thousand tonnes) 

0.0 

0.0 

0.0 

0.0 

0.0 

0.0 

Harvested crop production: vegetables (thousand tonnes) 

271.0 e 

361.4 e 

291.5 e 

298.7 e 

298.8 e 

323.7 e 

Source: Eurostat and the statistical authorities in Bosnia and Herzegovina 

: = not available 

  b = break in series 

  e = estimated value 

  p = provisional 

s = Eurostat estimate 

  w= data supplied by and under the responsibility of the national statistical authority and published on an "as is" basis and without any assurance as regards 

their quality and adherence to EU statistical methodology 

* = Europe 2020 indicator 

** = Macroeconomic Imbalance Procedure (MIP) indicator 

  Footnotes: 

1) 

Inland waters estimated at 210 km². 

2)  Consumer price inflation 

3)  Based on IMF balance of payments manual, Asset - Liability Approach 

4)  Based on IMF balance of payments manual, sixth edition. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5)  Based on IMF balance of payments manual, sixth edition and OECD Benchmark Definition of Foreign Direct Investment - 4th edition 

6)  End of year (31 December). 

7)  Based on IMF Monetary and Financial Statistics Manual, 2000. 

8)  M1 money supply comprises cash outside banks and transferable deposit in domestic currency of all domestic sectors (except central government deposits). 

9)  M2 money supply is comprised of money supplies, M1 money and QM quasi money. QM money supplies covers other deposits in domestic currency, 

transferable and other deposits in foreign currency of all domestic sectors (except the deposits of the central government). 

10) 

In accordance with the Decision on Credit Risk Management and Determination of Expected Credit Losses, from supervisory body, since January 1, 2020, 
commercial banks have re-recorded some of the bank's balance sheet receivables on of balance sheet records, which caused a decrease in loan of 
approximately 400 million KM in private enterprises and household sectors. 

11)  Data for monetary financial institutions. 

12)  The Central Bank of Bosnia and Herzegovina started with other financial corporation statistics from 2006. 

13) 

Includes data for the central bank and other banks for the end of December 2018, while data for other financial institutions are given for the end of June 
2018. 

14)  Short-term lending rates in national currency to non-financial corporations (weighted average). 

15)  Data are revised due to correction at few banks. 

16)  Demand deposit rates in national currency of households (weighted average). 

17)  Data for December 2018. 

18)  Revision: NEER base period 2010=100 

19)  Paasche export and import unit value indices 

20)  Since January 2020, the Labour Force Survey in Bosnia and Herzegovina has been conducted continuously, throughout the year, with quarterly data 
release. Also, from 2020 the procedure of weight calibration according to population estimates by five-year age groups and sex is carried out. 

21)  The public sector includes NACE Rev. 1.1 Sections L, M and N while the private sector includes other NACE Sections. 

22)  The public sector includes NACE Rev. 2 Sections O, P and Q while the private sector includes other NACE Sections. 

23)  Net earnings. 

24)  Excluding Brcko District. 

25)  Data not collected on inland waterways. Road share of inland freight transport based on road and rail transport.