COMMISSION STAFF WORKING DOCUMENT Bosnia and Herzegovina 2023 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 2023 Communication on EU Enlargement policy
Date: 2023-11-08
Institutions: Directorate-General for Neighbourhood and Enlargement Negotiations, European Commission
Subjects: Bosnia and Herzegovina, accession criteria, accession negotiations, pre-accession strategy, regional cooperation

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 8.11.2023  SWD(2023) 691 final  COMMISSION STAFF WORKING DOCUMENT Bosnia and Herzegovina 2023 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 2023 Communication on EU Enlargement policy                   {COM(2023) 690 final} - {SWD(2023) 690 final} - {SWD(2023) 692 final} - {SWD(2023) 693 final} - {SWD(2023) 694 final} - {SWD(2023) 695 final} - {SWD(2023) 696 final} - {SWD(2023) 697 final} - {SWD(2023) 698 final} - {SWD(2023) 699 final}  
 
 
Table of Contents 

1. 

INTRODUCTION ............................................................................................................................................. 3 

CONTEXT ......................................................................................................................................................... 3 
SUMMARY OF THE REPORT .................................................................................................................................. 4 

1.1. 
1.2. 
1.3 ASSESSMENT OF THE IMPLEMENTATION OF THE 14 KEY PRIORITIES FOR OPENING EU ACCESSION NEGOTIATIONS AND OF THE 
STEPS SPECIFIED IN THE COMMISSION RECOMMENDATION FOR CANDIDATE STATUS ..................................................................... 9 

2. 

CLUSTER 1: THE FUNDAMENTALS OF THE ACCESSION PROCESS .................................................................. 13 

2.1. 

2.2.  

2.2.1 
2.2.2 

FUNCTIONING OF DEMOCRATIC INSTITUTIONS AND PUBLIC ADMINISTRATION REFORM ................................................... 13 
2.1.1  
Democracy ........................................................................................................................................ 13 
2.1.2. Public administration reform .................................................................................................................... 19 
RULE OF LAW AND FUNDAMENTAL RIGHTS............................................................................................................ 24 
Chapter 23: Judiciary and fundamental rights ................................................................................. 24 
Chapter 24: Justice, freedom and security ........................................................................................ 47 
2.3. ECONOMIC CRITERIA .............................................................................................................................................. 63 
2.3.1. The existence of a functioning market economy ........................................................................................ 63 
2.3.2. The capacity to cope with competitive pressure and market forces within the Union .............................. 70 
2.4. PUBLIC PROCUREMENT, STATISTICS AND FINANCIAL CONTROL ......................................................................................... 73 
Chapter 5: – Public procurement ....................................................................................................................... 73 
Chapter 18: Statistics .......................................................................................................................................... 75 
Chapter 32: Financial control ............................................................................................................................ 77 

3.  GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION .............................................................. 81 

4.  ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP ........................................................................... 83 

CLUSTER 2: INTERNAL MARKET ....................................................................................................................................... 83 
Chapter 1: Free movement of goods ................................................................................................................... 83 
Chapter 2: Freedom of movements for workers.................................................................................................. 85 
Chapter 3: Right of establishment and freedom to provide services................................................................... 86 
Chapter 4: Free movement of capital ................................................................................................................. 87 
Chapter 6: Company law .................................................................................................................................... 88 
Chapter 7: Intellectual property law................................................................................................................... 89 
Chapter 8: Competition policy ............................................................................................................................ 90 
Chapter 9: Financial services ............................................................................................................................. 92 
Chapter 28: Consumer and health protection .................................................................................................... 94 
CLUSTER 3: COMPETITIVENESS AND INCLUSIVE GROWTH ...................................................................................................... 97 
Chapter 10: Digital transformation and media .................................................................................................. 97 
Chapter 16: Taxation .......................................................................................................................................... 99 
Chapter 17: Economic and monetary policy .................................................................................................... 100 
Chapter 19: Social policy and employment ...................................................................................................... 101 
Chapter 20: Enterprise and industrial policy ................................................................................................... 105 
Chapter 25: Science and research .................................................................................................................... 107 
Chapter 26: Education and culture .................................................................................................................. 108 
Chapter 29: Customs union .............................................................................................................................. 110 
CLUSTER 4: THE GREEN AGENDA AND SUSTAINABLE CONNECTIVITY...................................................................................... 111 
Chapter 14: Transport policy ........................................................................................................................... 111 

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Chapter 15: Energy .......................................................................................................................................... 114 
Chapter 21: Trans-European Networks ............................................................................................................ 116 
Chapter 27: Environment and climate change ................................................................................................. 118 
CLUSTER 5: RESOURCES, AGRICULTURE AND COHESION ...................................................................................................... 121 
Chapter 11: Agriculture and rural development............................................................................................... 122 
Chapter 12: Food safety, veterinary and phytosanitary policy ......................................................................... 123 
Chapter 13: Fisheries and aquaculture ............................................................................................................ 125 
Chapter 22: Regional policy and coordination of structural instruments ........................................................ 126 
Chapter 33: Financial and budgetary provisions ............................................................................................. 127 
CLUSTER 6: EXTERNAL RELATIONS.................................................................................................................................. 128 
Chapter 30: External relations ......................................................................................................................... 128 
Chapter 31: Foreign, security and defence policy ............................................................................................ 129 
ANNEX I – RELATIONS BETWEEN THE EU AND BOSNIA AND HERZEGOVINA ............................................................................ 133 

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1. 

INTRODUCTION   

1.1.  CONTEXT 

Following  its  application  for  EU  membership  in  February  2016,  Bosnia  and  Herzegovina 
must fulfil 14 key priorities as set out in the Commission's Opinion1 of May 2019 covering 
democracy/functionality,  the  rule  of  law,  fundamental  rights,  and  public  administration 
reform.  Once  the  Commission  assesses  that  Bosnia  and  Herzegovina  has  achieved  the 
necessary  degree  of  compliance  with  the  membership  criteria  and  in  particular  has  met  the 
key priorities, the Commission will recommend opening EU accession negotiations. On the 
basis  of  the  December  2019  conclusions  of  the  Council  of  the  European  Union2,  the 
Commission focuses its annual reports on Bosnia and Herzegovina’s implementation of the 
14 key priorities.  
On  the  basis  of  a  recommendation  by  the  Commission3,  in  December  2022  the  European 
Council  granted  Bosnia  and  Herzegovina  the  status  of  candidate  country4.  The  positive 
momentum that followed the granting of candidate status resulted in limited progress on the 
Opinion’s  key  priorities.  Positive  developments  at  state  level  were  in  stark  contrast  to 
negative developments at the level of the Republika Srpska entity, impacting the country as a 
whole.    

Following the October 2022 elections, state and entity-level legislative and executive bodies 
were  set  up  by  May  2023.  The  Commissioner  and  the  Chairwoman  of  the  Council  of 
Ministers  co-chaired  a  High-Level  Political  Forum  in  Sarajevo  on  17  May  to  monitor  the 
implementation of the steps in the recommendation, report on further progress on the ground 
and  discuss  reform  efforts  along  the  EU  path.  At  the  Political  Forum  the  authorities 
reconfirmed their commitment to the strategic goal of EU accession.  

Following the granting of candidate status, the public commitment of political parties to the 
strategic  goal  of  European  integration  brought  positive  results.  Important  steps  and 
commitments  were  made  towards  the  fulfilment  of  the  key  priorities,  despite  negative 
legislative developments at entity level. The formation of a state-level coalition government 
at record speed is an important proof of a new political dynamism and will.  

To address the steps specified in the Commission recommendation for candidate status, in the 
reporting  period  Bosnia  and  Herzegovina  took  the  following  actions.  The  Council  of 
Ministers adopted strategies to counter organised crime, made an updated risk assessment and 
an  accompanying  action  plan  on  anti-money  laundering  and  combating  the  financing  of 
terrorism, adopted strategies and action plans on migration and on terrorism, and appointed a 
supervisory body for the implementation of the national war crimes processing strategy. The 
contact point with Europol finally started operations in June 2023. The Council of Ministers 
endorsed  a  set  of  draft  laws,  notably  on:  integrity  in  the  judiciary;  torture  prevention 
(designating the Ombudsman as national preventive mechanism); foreigners; and freedom of 
access to information. These were adopted by Parliament in August and September 2023.    

The  Council  of  Ministers  also  endorsed  the  legal  basis  for  conducting  negotiations  on  the 
southern and eastern gas interconnections, and the cooperation agreement with Eurojust. The 
Council  of  Ministers  also  endorsed  the  organisation  of  the  Digital  Summit  of  the  Western 

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/ 
3 COM(2022) 528 final, p. 38-39. 
4 https://www.consilium.europa.eu/media/60872/2022-12-15-euco-conclusions-en.pdf 

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Balkans,  held  in  Sarajevo  in  October  2023,  the  establishment  of  the  Computer  Emergency 
Response Team (CERT), and the procurement of helicopters for the Ministry of Defence and 
the Armed Forces. A state budget for 2023 was adopted in March. Bosnia and Herzegovina 
has launched ratification of two regional mobility agreements and needs to do the same for 
the agreement on free travel with identity card.  

Recent  developments,  mainly  in  the  Republika Srpska entity, are going  against the positive 
momentum. Notably,  the entity  called  for constitutional  judges to  resign and adopted a law 
decreeing  that  Constitutional  Court  decisions  would  not  be  implemented,  calling  into 
question  the  authority,  integrity  and  the  unimpeded  functioning  of  the  Constitutional  Court 
and breaching the constitutional and legal order of the country. The entity also reintroduced 
criminal  penalties  for  defamation,  which  severely  impact  the  environment  for  civil  society 
and restrict freedom of expression and media freedom, representing a major step backwards 
in the protection of fundamental rights. A draft law targeting civil society groups as ‘foreign 
agents’  was  adopted  in  the  first  reading  by  the  entity  assembly.  If  finally  adopted,  this  law 
would  further  undermine  the  effective  functioning  of  democracy  and  would  mark  another 
regrettable and undeniable major step backwards. 

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.  Continued  protectionist  measures  are,  however,  a  cause  of  increasing  and  serious 
concern regarding implementation of the SAA. 

Policy dialogue under the SAA was restored after political blockage in 2021 and early 2022. 
The  cycle  of  sectoral  subcommittees  opened  in  2020  was  completed  in  June  2023.  A 
Stabilisation and Association Council took place in July 2023.  

Bosnia  and  Herzegovina  received  the  first  90%  of  the  EUR 70  million  energy  support 
package  in  May  2023.  The  Council  of  Ministers  needs  to  urgently  appoint  a  National  IPA 
Coordinator (NIPAC) for IPA III. 

1.2. 

SUMMARY OF THE REPORT5  

As regards political criteria, elections took place in October 2022. The High Representative 
intervened multiple times in electoral matters,  including on the evening of the election day, 
which according to OSCE/ODIHR challenged legal certainty.  

All state and entity-level legislative and executive bodies were set up by May 2023. A new 
state-level  Council  of  Ministers  took  office  in  late  January,  supported  by  a  ruling  coalition 
including  SNSD,  HDZ  BiH,  and  the  ‘trojka’  (SDP,  NiP,  Naša  Stranka).  A  state  budget  for 
2023 was adopted in March. The new Council of Ministers took significant steps to adopt EU 
reforms following the granting of candidate status: it adopted the strategy on organised crime, 
an  updated  risk  assessment  and  accompanying  action  plan  on  anti-money  laundering  and 
combating terrorism financing, as well as the strategies and action plans on migration and on 
terrorism. It also appointed a supervisory body for implementation of the national war crimes 

5  This  report  covers  the  period  from  June  2022  to  June  2023.  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.  It  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  scale  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, interim steps have also been used. 

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processing strategy. The contact point with Europol finally started operations in June 2023. 
The  Council  of  Ministers  also  endorsed  a  set  of  draft  laws,  notably  on:  integrity  in  the 
judiciary; 
the  Ombudsman  as  national  preventive 
mechanism);  foreigners;  and  freedom  of  access  to  information.  These  were  adopted  by 
Parliament in August and September 2023.    

torture  prevention  (designating 

A number of Constitutional Court decisions have yet to be fully enforced, including on state 
property. The Constitutional  Court suspended or quashed several  legal  and political  acts  by 
the  Republika  Srpska  entity.  The  entity  leadership  determined  to  enforce  such  laws 
nevertheless,  endangering  legal  certainty.  The  entity  assembly  called  on  state-level 
constitutional judges to resign, and in June 2023 it legalised the non-publication of decisions 
of  the  High  Representative  and  the  non-implementation  of  the  rulings  of the  Constitutional 
Court,  calling  into  question  the  authority  and  integrity  of  the  Constitutional  Court  and 
breaching the constitutional and legal order of the country. Both entities’ assemblies should 
appoint  judges  swiftly  to  the  vacant  judges’  seats  and  ensure  the  full  composition  of  the 
Constitutional Court. 

Constitutional and electoral  reforms  are still needed to  bring the Constitution  into line with 
the European Convention on Human Rights, complying with the Sejdić-Finci case law.  

No  steps  were  taken  to  develop  socio-economic  reforms  in  line  with  Commission 
recommendations and with the joint conclusions of the economic and financial dialogue. The 
continued protectionist measures are a matter of concern in the implementation of the SAA. 
Policy dialogue under the SAA was restored after its political blockage in 2021-2022. Bosnia 
and  Herzegovina  has  not  yet  developed  a  national  plan  for  the  adoption  of  the  EU  acquis 
(NPAA), as required by the SAA. 

Some  progress  was  made  on  the  alignment  with  the  common  foreign  and  security  policy 
(CFSP).  Bosnia  and  Herzegovina  significantly  improved  its  alignment  with  EU  foreign 
policy.  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.  Bosnia  and 
Herzegovina has launched ratification of two regional mobility agreements and needs to do 
the same for the agreement on free travel with identity cards. Bosnia and Herzegovina is at an 
early stage of preparation and made some progress on public administration reform (PAR). 
Some positive steps were taken by (i) adopting the PAR coordination arrangement (‘common 
platform’), including a political decision-making body; (ii) implementing comprehensive and 
countrywide public finance management,  (iii) improving capacity for public consultation  at 
state level and on regulatory impact assessment in the Republika Srpska entity, (iv) adopting 
a  strategy  on  human  resource  management  in  the  Federation  entity,  (v)  improving  the 
professional  development  and  performance  appraisal  in  the  Federation  entity  and  at  state 
level, and  (vi) adopting a Law on freedom of access to information, aimed at fostering pro-
active disclosure and transparency. Some five years after adoption, the PAR action plan has 
been implemented only  to  a limited extent. Civil service laws are still not harmonised with 
each other and merit principles are not enshrined in recruitment procedures. The monitoring 
of  human  resources  is  not  effective  in  detecting  irregularities.  A  political  decision-making 
body, included in the ‘common platform’, still needs to become operational to steer reforms 
effectively.  The  capacity  of  entity-level  PAR  coordinators  remains  weak.  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 policymaking.  

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Bosnia  and  Herzegovina  is  at  an  early  stage  of  preparation  as  regards  its  judiciary.  Some  
progress  was  made  in  this  area.  In  September  2023,  Bosnia  and  Herzegovina  amended  the 
Law  on  the  High  Judicial  and  Prosecutorial  Council  (HJPC)  with  the  aim  of  establishing  a 
system to verify the asset declarations of judges, prosecutors and HJPC members, albeit with 
changes  compared  to  the  version  on  which  the  Venice  Commission  was  consulted.  Such 
changes  hamper  the  effectiveness  of  the  asset-declaration  system  and  therefore  need  to  be 
amended.  The  Council  of  Ministers  also  appointed  a  new  supervisory  body  overseeing  the 
implementation of the national war crimes strategy. 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.  Persistent  and  evident  signs  of  deterioration  continue  to  require  urgent 
measures  to  strengthen  integrity  and  regain  the  public’s  trust  in  the  judiciary.  The  poor 
functioning of the judicial system continued to undermine citizens’ enjoyment of rights and 
the  fight  against  corruption  and  organised  crime.  The  Republika  Srspka  entity  assembly 
called on state-level constitutional judges to resign and legalised the the non-implementation 
of the rulings of the Constitutional Court, calling into question the authority and integrity of 
the Constitutional Court and breaching the constitutional and legal order of the country. 

Bosnia  and  Herzegovina  is  between  an  early  stage  and    some  level  of  preparation  in  the 
prevention of and fight against corruption and organised crime. No progress was made in 
the  fight  against  corruption.  Some  progress  was  made  in  the  fight  against  organised  crime.  
The Council of Ministers adopted a strategy on organised crime, a strategy and action plan on 
terrorism,  an  updated  risk  assessment  and  an  accompanying  action  plan  on  anti-money 
laundering and combating the financing of terrorism. The contact point for cooperation with 
Europol started operating in June 2023. The Ministry of Justice is yet to submit a draft state-
level  law  on  the  prevention  of  conflict  of  interest  in  line  with  European  standards  to  the 
Council of Ministers for adoption. Although there were some indictments pertaining to high-
level corruption, 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 
take  advantage  of  legal  and  administrative  loopholes.  The  police  is  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. Cooperation with Eurojust and the European Public Prosecutor’s 
Office  (EPPO)  still  needs  to  be  stepped  up.  Building  upon  some  operational  successes  in 
2023, Bosnia and Herzegovina needs to continue its efforts in the fight against terrorism and 
drug trafficking and must increase its capacity to do so. A new law on anti-money laundering 
and terrorism financing in line with the EU acquis urgently needs to be adopted.  

The  legislative  and  institutional  framework  on  fundamental  rights  is  largely  in  place.  In 
August 2023 the Parliament adopted a Law on freedom of access to information and amended 
the  Law  on  the  human  rights  Ombudsman  to  designate  it  as  the  national  preventive 
mechanism  against  torture  and  ill-treatment.  Significant  reforms  are  still  needed  to  ensure 
that  all  citizens  can  exercise  their  voting  rights  and  to  ensure  non-discriminatory,  inclusive 
and quality education for all, including by overcoming the practice of ‘two schools under one 
roof’. Pride marches have been held regularly since 2020, and an action plan on the rights of 
lesbian,  gay,  bisexual,  transgender,  intersex  and  queer  (LGBTIQ)  persons  was  adopted  in 
July 2022. The  gender action plan was adopted in October 2023. Gender-based violence, ill-

6 

 
 
treatment of detainees and inadequate protection of minorities, including the Roma6, continue 
to cause concern.  

There was backsliding in guaranteeing freedom  of expression and freedom of the media by 
protecting  journalists  from  threats  and  violence  and  ensuring  the  financial  sustainability  of 
the  public  broadcasting  system.  Criminal  penalties  for  defamation,  reintroduced  in  the 
Republika Srpska entity in July 2023, severely impact the environment for civil society and 
restrict  freedom  of  expression  and  of  the  media.  In  September  2023,  a  draft  law  targeting 
civil  society  groups  as  ‘foreign  agents’  was  also  adopted  in  first  reading  in  the  Republika 
Srpska  entity  assembly;  if  fully  adopted,  it  would  mark  another  regrettable  and  undeniable 
major step backwards.  

Bosnia and Herzegovina continued to take steps to improve migration management. Bosnia 
and Herzegovina adopted a new strategy and action plan on migration and asylum and now 
needs  to  implement  them.  A  Law  on  foreigners  was  adopted  in  September  2023.  Major 
weaknesses  still  undermine  the  provision  of  necessary  assistance.  Bosnia  and  Herzegovina 
needs  to  urgently  step  up  efforts  to  ensure  access  to  asylum  and  strengthen  border 
management.  Bosnia  and  Herzegovina  is  satisfactorily  implementing  the  integrated  border 
management strategy  and should adopt  in  good time the strategy and action plan for 2024-
2029.  

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,  adversely  affecting  the  business  environment.    Unemployment 
remains  very  high  and  labour  out-migration  persists.  The  country’s  economic  reform 
programme (ERP) continues to be of poor quality and implementation of reforms is limited. 
The  ERP  does  not  contain  sufficient  credible  countrywide  measures  to  address  the  major 
structural  economic  challenges  in  relation  to  the  business  environment,  the  informal 
economy,  public  enterprises,  the  green  and  digital  transitions  and  unemployment.  Overall, 
Bosnia  and  Herzegovina’s  economic  performance  remains  below 
its  potential,  as 
policymaking is hindered by political stalemate, an overly short-term  approach, and lack of 
focus on policy measures to build growth.  

Bosnia and Herzegovina is between an early stage and some level of preparation in terms of 
capacity  to  cope  with  competitive  pressure  and  market  forces  in  the  EU,  and  made 
limited  progress  in  this  area.  The  quality  of  education  has  remained  low  and  the  country 
continues to lag behind in the energy and digital transition. In response to changes in global 
demand,  some  structural  adjustment  took  place,  with  the  focus  of  value-added  moving 
towards services, such as trade, IT and tourism. Economic integration with the EU remains 
high, but overall trade is below potential. 

Bosnia  and  Herzegovina  is  in  between  an  early  stage  and  some  level  of  preparation  in  its 
ability  to  take  on  the  obligations  of  EU  membership.  It  needs  to  significantly  step  up 
alignment with the EU acquis and implement and enforce the necessary legislation. Limited 
to no progress was made on  most EU acquis chapters during the reporting period.  

Bosnia and Herzegovina has some level of preparation and made limited progress in the area 
of  public  procurement  with  the  adoption  of  certain  bylaws.  The  legislation  needs  to  be 
further aligned with the EU acquis, including in the area of concessions. There was limited 
progress  on  statistics;  preparations  for  the  next  census  have  hardly  progressed  and  the 

6  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. 

7 

 
 
 
production  of  macroeconomic  statistics  continues  to  deviate  from  the  EU  acquis.  Some 
progress  was  made  on  public  internal  financial  control  (PIFC)  in  terms  of  implementing 
PIFC strategies in the entities and at state level. 

Major steps are needed to align the legal framework across the country with the EU acquis on 
the internal market (free movement of goods, workers, services and capital, company law, 
intellectual property, competition policy, financial services, consumer and health protection) 
as well as to establish an internal market within the country. Bosnia and Herzegovina made 
no progress in this cluster. Procedures and legislation that differ between the entities create 
obstacles  to  competitiveness  and  growth  and  hinder  enforcement.  Bosnia  and  Herzegovina 
should  improve  coordination  among  the  relevant  authorities  in  all  areas  to  achieve  a 
countrywide approach and improve their enforcement record. It should abolish ethnic-based 
voting procedures in  the Competition  Council and State Aid Council and set  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, as well as 
for the country to benefit from the Economic and Investment Plan and the New Growth Plan 
for the Western Balkans. 

Bosnia  and  Herzegovina  made  limited  or  no  progress  in  the  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 customs). It 
showed  no  progress  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  economic 
reform  programme.  The  country  needs  to  introduce  socio-economic  reforms  to  address 
structural  weaknesses,  including  low  competitiveness  and  high  unemployment.  Bosnia  and 
Herzegovina  made  some  or  limited  progress  in  the  green  agenda  and  sustainable 
connectivity cluster, where it is at an early stage on energy, environment and climate change. 
It  has  some  level  of  preparation  in  the  areas  of  transport  and  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 Plan7 and the Green Agenda for the Western Balkans8 needs to be accelerated.  

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 acquaculture, and financial and budgetary provisions), where preparation 
is  mostly  at  an  early  stage.  It  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  capacity.  The  administrative 
capacity  of  laboratories  and  central  databases  has  yet  to  be  strengthened.  More  efforts  are 
also  needed  to  prepare  and  adopt  a  countrywide  strategy  on  fisheries  and  aquaculture  and 
harmonise  data  collection.  Bosnia  and  Herzegovina  should  start  preparing  a  countrywide 
regional development strategy. 

Bosnia and Herzegovina has some level of preparation in the cluster on  external relations. 
Its  alignment  with  the  EU  Common  Foreign  and  Security  Policy  (CFSP)  significantly 
improved,  notably  on  High  Representative  statements  on  behalf  of  the  EU  and  Council 

7 COM(2020) 641 final. 
8 SWD(2020) 223 final. 

8 

 
 
 
decisions  on  restrictive  measures  following  Russia’s  war  of  aggression  against  Ukraine, 
although the implementation of sanctions remains a challenge. Bosnia and Herzegovina again 
unilaterally introduced and continued  export  restrictions breaching  the terms of  the SAA, a 
matter  of  concern  for  trade  and  commercial  policy.  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 
in  regional 
cooperation and to maintain good neighbourly relations.  It needs to swiftly ratify the three 
regional mobility agreements.  

to  actively  participate 

In 2022, Bosnia and Herzegovina benefited from EUR 45.5 million under the Instrument for 
Pre-accession  Assistance  2021-2027  (IPA  III)9,  providing  support  for  programmes  in 
justice,  public  administration  reform,  public  finance  management,  EU 
integration, 
environment and climate change, employment and social protection. This set of programmes, 
complemented  by  a  package  of  multi-country  programmes,  significantly  contributes  to  the 
implementation  of  the  Economic  and  Investment  Plan  for  the  Western  Balkans  and  the 
Green Agenda.  

The  2023  annual  action  plan  consists  of  the  energy  support  package  for  the  Western 
Balkans and provides EUR 70 million to reduce the socio-economic impact of rising energy 
prices,  in  particular  on  small  and  medium-sized  enterprises  and  households,  and  to  support 
the transition to renewable energy sources, in line with the priorities of the EU’s Economic 
and Investment Plan for the Western Balkans.10  

Adopting  countrywide  sector  strategies  remains  a  key  requirement  for  Bosnia  and 
Herzegovina  to  benefit  fully  from  IPA  funding  in  the  future.  The  Council  of  Ministers 
urgently needs to appoint the National IPA Coordinator (NIPAC) for IPA III.   

1.3  ASSESSMENT  OF  THE  IMPLEMENTATION  OF  THE  14  KEY  PRIORITIES  FOR  OPENING  EU 
IN  THE  COMMISSION 
ACCESSION  NEGOTIATIONS  AND  OF  THE  STEPS  SPECIFIED 
RECOMMENDATION FOR CANDIDATE STATUS 

Key  priority  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. 

remains 

frameworks 

The  electoral 
to  be  aligned  with  European  standards  and 
recommendations.  The  High  Representative  imposed  several  changes  to  the  electoral 
framework, including on the evening of the election day (2 October 2022), which according 
to  OSCE/ODIHR  challenged  legal  certainty.  Municipal  elections  were  held  in  Mostar  in 
December 2020.  

Key  priority  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. 

Step: 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. 

9 C(2022) 9167 final. 
10 C(2022) 9158 final. 

9 

 
 
 
 
There was no action on this key priority and step. The Council of Ministers should improve 
the  functioning  and  make  effective  use  of  the  coordination  mechanism  (collegium  and 
ministerial  conferences),  and  develop  a  national  programme  for  the  adoption  of  the  EU 
acquis  (NPAA).  The  programme  for  EU  integration,  prepared  by  DEI  is  still  pending 
approval by the Council of Ministers. The Council of Ministers needs to urgently appoint the 
national IPA coordinator (NIPAC) for IPA III.  

Key  priority  3:  Ensure  the  proper  functioning  of  the  Stabilisation  and  Association 
Parliamentary Committee. 

The  Stabilisation  and  Association  Parliamentary  Committee  (SAPC)  adopted  its  rules  of 
procedure  in  2021.  Following  the  October  2022  elections,  delegates  to  the  SAPC  were 
appointed in May 2023. Bosnia and Herzegovina’s Parliament and the European Parliament 
held a full session of the SAPC in late October 2023. The key priority is completed.  

Key  priority  4:  Fundamentally 
constitutional level, in order to: 

improve 

the 

institutional 

framework, 

including  at 

a)  Ensure legal certainty on the distribution of competences across levels of government; 
b)  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; 
c)  Guarantee  the  independence  of  the  judiciary,  including  its  self-governance  institution 

(HJPC); 

d)  Reform the Constitutional Court, including addressing the issue of international judges, 

and ensure enforcement of its decisions; 

e)  Guarantee  legal  certainty,  including  by  establishing  a  judicial  body  entrusted  with 
ensuring the consistent interpretation of the law throughout Bosnia and Herzegovina; 
f)  Ensure  equality  and  non-discrimination  of  citizens,  notably  by  addressing  the  Sejdić-

Finci ECtHR case law; 

g)  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.  

NB: The June 2022 European Council called on the leaders of  Bosnia  and Herzegovina  to 
urgently  finalise  the  pending  constitutional  and electoral  reforms.  These  reforms  should  be 
advanced as an utmost priority. 

This  key priority requires fundamental  reforms,  including at  constitutional  level  to  improve 
the institutional framework of Bosnia and Herzegovina. In June 2023 the  Republika Srpska 
entity adopted a law on the non-application of decisions of the Constitutional Court, in breach 
of the constitutional and legal order, further hindering legal certainty.   

Key priority 5: Take concrete steps to promote an environment conducive to reconciliation in 
order to overcome the legacies of the war. 

The Council of Ministers appointed a supervisory body for the implementation of the national 
war  crimes  processing  strategy.  Some  positive  action  was  taken  at  local  level  (Mostar, 
Brčko).  Occasionally  political  leaders  continue  spreading  historical  revisionism  and 
glorifying  war  criminals,  incuding  by  denying  and  trivialising  genocide,  war  crimes,  and 
crimes  against  humanity.  Bosnia  and  Herzegovina  should  address  outstanding  issues 
concerning war crime trials, missing persons, redress of wartime victims of torture and sexual 
violence, and transitional justice. 

Key priority 6:  Improve  the functioning of  the  judiciary by adopting new legislation on the 

10 

 
 
High Judicial and Prosecutorial Council and of the Courts of Bosnia and Herzegovina in line 
with European standards.  

Step: adopt, as a matter of priority, integrity amendments in the existing law of High Judicial 
and Prosecutorial Council. 

The  Parliament  adopted  integrity  amendments  to  the  HJPC  Law  in  September  2023,  albeit 
with  changes  compared  to  the  version  on  which  the  Venice  Commission  was  consulted. 
These changes hamper the effectiveness of the asset declaration system and therefore need to 
be  amended.  Bosnia  and  Herzegovina  should  finalise  and  adopt  the  two  comprehensive 
judicial reform laws – the new Law on the HJPC and the new law on the Courts of Bosnia 
and Herzegovina – in line with the opinions of the Venice Commission.   

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

a)  adopting  and  implementing  legislation  on  conflict  of  interest  and  whistle-blowers’ 

protection; 

b)  ensuring the effective functioning and coordination of anti-corruption bodies;  
c)  align the legislation and strengthen capacities on public procurement;  
d)  ensuring  effective  cooperation  among  law  enforcement  bodies  and  with  prosecutors’ 

offices; 

e)  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; 

f)  de-politicising  and  restructuring  public  enterprises  and  ensuring  transparency  of 

privatisation processes. 

Step: adopt the Law on prevention of conflict of interest.  

Step:  take  decisive  steps  to  strengthen  the  prevention  and  fight  against  corruption  and 
organised crime. 

The Parliament amended the Law on public  procurement in  August 2022, and bylaws have 
been put in place. The Europol contact point started operating in June 2023, and Bosnia and 
Herzegovina  deployed  a  liaison  officer  to  The  Hague.  All  police  bodies  in  Bosnia  and 
Herzegovina can now exchange messages through the Secure Information Exchange Network 
Application (SIENA) system. The Council of Ministers  adopted strategies  on terrorism and 
on organised crime, and an updated risk assessment and accompanying action plan on anti-
money laundering and combating the financing of terrorism. These strategies and action plans 
need to be implemented at operational level. 

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

Step:  decisively  advance  work  to  ensure  effective  coordination,  at  all  levels,  of  border 
management and migration management capacity, as well as ensuring the functioning of the 
asylum system. 

Migration management has improved. The Council of Ministers adopted a migration strategy 
and  action  plan.  The  Parliament  adopted  a  Law  on  foreigners  in  August  2023.  Reception 
capacities  are  sufficient.  Readmission  agreements  and 
implementing  protocols  are 
implemented  overall  satisfactorily.  Bosnia  and  Herzegovina  needs  to  assign  an  appropriate 
budget  for  migration  management,  improve  the  procedures  for  the  return  of  persons  not  in 

11 

 
 
need of international protection and take further steps to ensure a functioning asylum system.  
Obstacles persist to ensuring effective access to asylum.  

Key priority 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 

Legislation  on  gender  equality  and  on  anti-discrimination  is  not  harmonised  across  the 
country or effectively enforced. The Council of Ministers adopted a new gender action plan 
in  October  2023;  a  new  action  plan  on  women,  peace  and  security  remains  to  be  adopted. 
Cases of femicide sparked public protests and exposed systemic shortcomings of response to 
gender-based and domestic violence, including in the legislative alignment with the Istanbul 
convention.  

Key priority 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.  

Step: ensure prohibition of torture, notably by establishing a national preventive mechanism 
against torture and ill-treatment. 

In  October  2019  the  Constitutional  Court  repealed  the  reference  to  death  penalty  in  the 
Constitution of the Republika Srpska entity. In August 2023 the Parliament amended the Law 
on  the  human  rights  Ombudsman  to  designate  it  as  national  preventive  mechanism  against 
torture  and  ill-treatment  –  an  international  obligation  of  the  country.  The  key  priority  is 
completed.  

Key  priority  11:  Ensure  an  enabling  environment  for  civil  society,  notably  by  upholding 
European standards on freedom of association and freedom of assembly. 

While  the  overall  legal  and  regulatory  framework  is  broadly  in  line  with  the  EU  acquis, 
recently  the  Republika  Srpska  entity  adopted  in  the  first  reading  a  draft  law  targeting  civil 
society actors as ‘foreign agents’ which, if fully adopted, would mark another regrettable and 
undeniable major step backwards.   

Key  priority  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.  

Step:  guarantee  freedom  of  expression  and  of  the  media  and  the  protection  of  journalists, 
notably  by  ensuring  the  appropriate  judicial  follow-up  to  cases  of  threats  and  violence 
against journalists and media workers. 

There  continue  to  be  concerns  about  political  pressure,  intimidation  and  threats  against 
journalists.  In  July  2023  the  Republika  Srpska  entity  re-introduced  criminal  penalties  for 
defamation, with disproportionate restrictions that severely impact freedom of expression and 
of  the  media  and  representing  a  major  step  backwards.  No  action  was  taken  to  ensure  the 
financial sustainability of the public broadcasting system.  

Key  priority  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. 

12 

 
 
Pride marches have been held regularly since 2020. An action plan on the rights of LGBTIQ 
persons  was  adopted  in  July  2022  and  remains  to  be  implemented.  The  protection  and 
inclusion of persons in vulnerable situation should be further addressed.   

Key priority 14: Complete essential steps in public administration reform towards improving 
the  overall  functioning  of  the  public  administration  by  ensuring  a  professional  and  de-
politicised civil service and a coordinated countrywide approach to policy making. 

All  levels  of  government  have  been  implementing  the  action  plan  on  public  administration 
reform (PAR), the comprehensive and countrywide public finance management strategy, and 
their  own  individual  strategies  on  public  financial  management.  In  August  2023  the 
Parliament adopted a Law on freedom of access to information, intended to improve the pro-
active  disclosure  of  information  and  the  transparency  of  state-level  institutions.  A 
professional  and  de-politicised  civil  service  remains  to  be  achieved,  notably  by  amending 
civil  service  laws.  A  coordinated  countrywide  approach  to  policy  making  remains  to  be 
ensured. 

2. 

CLUSTER 1: THE FUNDAMENTALS OF THE ACCESSION PROCESS  

FUNCTIONING  OF  DEMOCRATIC  INSTITUTIONS  AND  PUBLIC  ADMINISTRATION 

2.1. 
REFORM   

2.1.1.   Democracy  

General elections took place in October 2022. Ahead of the vote and even directly after the 
closure of the polls, the High Representative intervened multiple times in electoral  matters, 
including  on  budget  and  rules.  State  and  entity-level  legislative  assemblies  were  swiftly 
formed by March, and executive bodies by May. The ruling coalition includes SNSD, HDZ 
BiH,  and  the  ‘trojka’  (SDP,  NiP,  Naša  Stranka)  while  excluding  SDA  from  these  levels  of 
government.  The  Presidency  took  office  in  November,  and  for  the  first  time  since  1995 
includes  a  woman,  Željka  Cvijanović  (SNSD),  also  as  first  female  chair.  A  new  state-level 
Council of Ministers was swiftly set up after the vote and took office in late January, chaired 
for  the  first  time  by  a  woman,  Borjana  Krišto  (HDZ  BiH).  A  new  government  of  the 
Federation entity was appointed in late April, headed by SDP leader Nermin Nikšić, after the 
High Representative suspended the Federation entity constitution to enable this.  

Following the granting of candidate status, the public commitment of political parties to the 
strategic  goal  of  European  integration  has  brought  positive  results.  Important  steps  and 
commitments  towards  the  fulfilment  of  the  key  priorities  were  taken,  despite  negative 
legislative developments at entity level. The formation of a state-level coalition government 
at  record  speed  is  an  important  proof  of  a  new  political  dynamism  and  will.  The  positive 
momentum  which  followed  the  granting  of  candidate  status  resulted  in  limited  progress  on 
the key priorities during the reporting period.  

Recent  developments,  mainly  in  the  Republika Srpska entity, are going  against the positive 
momentum.  Notably,  the  entity  adopted  a  law  not  to  implement  Constitutional  Court 
decisions and criminalised defamation, severely restricting media freedom and representing a 
major  step  backwards  in  the  protection  of  fundamental  rights.  A  draft  law  targeting  civil 
society as ‘foreign agents’ is also pending adoption in the entity. If adopted, this law would 
further undermine the effective functioning of democracy and would mark another regrettable 
and undeniable major step backwards. These developments have a severe negative impact on 

13 

 
 
 
progress on key priority 4 on the improvement of the institutional framework, including at the 
constitutional  level;  key  priority  12  on  the  guarantees  of  freedom  of  expression  and  the 
media; and key priority 11 on ensuring an enabling environment for civil society. 

The Constitutional Court suspended and then quashed several legal and political acts adopted 
by  the  Republika  Srpska  entity  that  were  in  breach  of  the  constitutional  and  legal  order, 
including twice on state property matters, which the High Representative had previously also 
suspended.  In  June  2023,  the  Republika  Srpska  entity  legalised  the  non-publication  of  a 
decisions of the High Representative and decreed that the rulings of the Constitutional Court 
would  not  be  implemented,  in  breach  of  the  constitutional  and  legal  order.  The  High 
Representative  annulled  these  laws  in  July.  Entity  authorities  determined  to  enforce  them 
anyway, thereby calling into question the authority and integrity of the Constitutional Court 
and to breach the constitutional and legal order of the country. 

In  April  2023,  the  Republika  Srpska  entity  assembly  called  on  state-level  constitutional 
judges to resign. This is of concern. Entity parliaments should instead swiftly appoint judges 
to the vacant seats to ensure the unimpeded functioning of the Constitutional Court of Bosnia 
and Herzegovina. 

To  swiftly  respond  to  unconstitutional  initiatives  by  the  Republika  Srpska  entity,  the 
Constitutional  Court  needs  to  reform  its  own  rules  of  procedures,  including  to  be  able  to 
suspend unconstitutional legislation before its entry into force.  

Elections  

Neither before nor after the October 2022 elections did the Parliament amend the election law 
to  address  outstanding  recommendations  by  OSCE/ODIHR  and  GRECO  on  electoral 
standards, including as regards transparency of political party financing (Opinion key priority 
1). The High Representative imposed several changes to the electoral framework, including 
on  the  evening  of  the  election  day,  which  according  to  OSCE/ODIHR  challenged  legal 
certainty. Overall, elections were competitive and well organised, but marked by mistrust in 
public  institutions  and  ethnically  divisive  rhetoric.  The  Parliament  needs  to  address 
OSCE/ODIHR and GRECO recommendations to improve the integrity of and public trust in 
the electoral process, ahead of the 2024 local elections.  

No  steps  were  taken  by  the  Parliament  to  harmonise  the  legislation  on  the  registration  of 
political  parties  across  the  country,  nor  to  remove  from  the  Constitution  any  ethnic  and 
residence-based discrimination in voting rights, in line with European Court of Human Rights 
(ECtHR) rulings. The country needs urgently finalise the pending constitutional and electoral 
reforms. These reforms should be advanced as an utmost priority. 

General  elections  took  place  on  2 October  2022  following  interventions  by  the  High 
Representative in June and July to ensure the appropriate budget and with the stated aim of 
improving the integrity and transparency of the electoral process and strengthening the role of 
the  Central  Election  Commission.  According  to  OSCE/ODIHR,  elections  were  competitive 
and well organised overall, but were marked by mistrust in public institutions and ethnically 
divisive rhetoric.  

On the evening  of  election day, following  the closure of the polls, the High  Representative 
imposed significant amendments to the election law and to the constitution of the Federation 
entity,  including  for  the  appointment  of  cantonal  delegates  to  the  entity  House  of  Peoples. 
According to OSCE/ODIHR this challenged legal certainty, as the full impact of the cantonal 
assembly  vote  was  not  foreseeable  by  electoral  contestants  and  voters.  The  Constitutional 

14 

 
 
Court  in  March  2023  established  that  the  electoral  changes  imposed  did  not  breach  the 
Constitution. An application on the matter is pending at the ECtHR. 

Appeals against alleged irregularities in the vote caused delays in the publication of results. 
The Central Election Commission (CEC) ordered a control count of all votes for the President 
of the Republika Srpska  entity,  finally confirming the political  results.  The CEC  confirmed 
all  electoral  results  30  days  after  the  vote.  The  judicial  prosecution  of  reported  cases  of 
electoral  frauds  has  been  weak.  The  CEC  needs  to  strengthen  its  audit  capacity  to  monitor 
compliance on political party financing. Political parties should respect its independence and 
refrain from threatening to dismiss CEC members.  

Despite  the  appointment  of  two  women,  as  Chairs  of  the  Council  of  Ministers  and  of  the 
Presidency,  the  October  2022  elections  led  to  a  decrease  in  the  participation  of  women  in 
politics. The country needs to further harmonise its legislation with the gender equality law, 
implement measures to reduce verbal violence against women in politics, increase visibility 
of women candidates and improve party cultures to secure equal participation of women. 

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.  

Early  mayoral  elections  took  place  in  six  municipalities  in  February  2023,  with  very  low 
turnouts and multiple reports of incidents, including voter fraud and family voting.  

Parliament 

Following  the  October  2022  elections,  new  legislative  assemblies  were  formed  by  March 
2023. Parliamentary oversight over the executives remains weak. No improvement was made 
on  the  registration  and  financing  of  political  parties.  The  Stabilisation  and  Association 
Parliamentary Committee held a full session in October 2023 (Opinion key priority 3).  

The  Parliamentary  Assembly  went  into  pre-electoral  recess  from  August  until  December 
2022, which resulted in a very poor legislative output, despite the outstanding backlog, as in 
the previous period. The outgoing Parliament adopted only a law on  trial within reasonable 
time and the 2022 budget and four sets of amendments (including on public procurement in 
August 2022), of which  two in  urgent  procedure (28%).  The new Parliament adopted three 
laws  (2023  budget;  wine  market;  freedom  of  access  to  information)  and  six  sets  of 
amendments (on basics road safety; foreigners, integrity in the judiciary, torture prevention). 
The  2023  budget  and  the  laws  on  VAT  and  foreigners  were  adopted  in  urgent  procedure 
(33%).  The  2023  budget  was  adopted  in  late  March,  after  a  first  quarter  under  temporary 
financing.  

Parliamentary  oversight  of  the  executive  was  very  weak.  No  follow-up  was  given  to  the 
findings  and  recommendations  of  the  interim  investigative  committee  of  the  House  of 
Representatives  on  the  state  of  the  judiciary,  published  in  June  2022.  The  House  of 
Representatives  established  a  standing  committee  for  the  fight  against  corruption  and  the 
kleptocracy. There is no parliamentary monitoring of compliance with the recommendations 
of independent institutions or of their annual reports.  

Despite legislation laying down a 40% gender quota for candidates, after the 2022 elections 
women account only for 24% of the members of the House of Representatives (10 out of 42, 
down from 11) and 13% of the members of the House of Peoples (2 out of 15, down from 3). 
Rules of procedure requiring gender balance are largely ignored, and there are no measures to 
promote the political representation of disadvantaged women. At entity level, the Republika 
Srpska assembly includes only 12 women among 83 MPs (14.5%, down from 18 MPs), and 

15 

 
 
the Federation House of Representatives has 27 women out of 98 MPs (27%, down from 30 
MPs). 

The  delegates  to  the  Stabilisation  and  Association  Parliamentary  Committee  (SAPC)  were 
appointed  in  May  2023,  and  the  Parliamentary  Committee  held  a  full  session  in  October 
2023. Bosnia and Herzegovina should continue ensuring the proper functioning of the SAPC, 
notably with the adoption of recommendations, in line with Opinion key priority 3.  

Entity parliaments met regularly, making considerable use of urgent procedures. In 2022, the 
Parliament of the Federation entity adopted 6 laws by urgent and 19 by shortened procedure, 
out  of 38 (66%). In 2022, the assembly  of the  Republika Srpska entity  adopted 65 laws, of 
which 25 (38.5%, down from 62%) by fast-track procedures, including the 2023 budget. The 
Brčko  District  Assembly  adopted  46  laws,  of  which  only  one  (2%,  down  from  16%)  by 
urgent procedure.  

There  are  9  party  groups  in  the  state-level  House  of  Representatives,  10  in  the  Federation 
entity House of Representatives, and 11 in the Republika Srpska National Assembly.  

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.   

By the end of 2022, the terms of office of two judges of the state-level Constitutional Court 
expired due to age limits. The entity assemblies have not yet replaced them, thus impairing 
the  Court’s  decision-making.  Both  entity  assemblies  should  complete  appointment 
procedures and ensure the full composition of the Constitutional Court. 

In  October  and  November  2022,  the  Federation  House  of  Peoples  finally  appointed  four 
entity-level constitutional judges to the vacant judgeships. Since 2019, the Federation entity’s 
constitutional court had operated with only five judges out of nine, which seriously impaired 
its decision-making. The appointment restored the functioning of the court’s panel on ‘vital 
national interest’. The House of Representatives of the Federation entity has failed to replace 
a  constitutional  judge  whose  term  expired  in  August  2022;  he  will  continue  to  serve  until 
replaced.  

The  Federation  Parliament  has  not  filled  the  vacancies  on  the  steering  board  of  the  public 
broadcaster FTV, nor has it appointed a director of FTV since 2013.  

Governance  

New executive bodies took office in early 2023 after the October elections. The Council of 
Ministers took swift action to bring forward the reforms required to address the Opinion key 
priorities,  notably  by  adopting  several  strategies  and  draft  laws,  which  now  need  to  be 
approved in Parliament. The Presidency was marred by continued lack of consensus on key 
issues, including foreign policy and regional cooperation. The executives have little capacity 
for coordination and policy planning. Coordination of EU matters needs to be strengthened, 
including  the  role  of  the  Directorate  for  European  Integration  (DEI).  The  Council  of 
Ministers  still  needs  to  improve  the  functioning  of  the  coordination  mechanism  and  to 
develop  and  adopt  a  national  programme  for  the  adoption  of  the  EU  acquis  (Opinion  key 
priority 2). The Council of Ministers needs to urgently appoint the National IPA Coordinator 
(NIPAC) under IPA III. 

The  new  Presidency  took  office  in  November.  For  the  first  time  since  1995  it  included  a 
woman, who served as its chair for the first 8 months. Presidency members continued to take 

16 

 
 
opposite  stances,  most  notably  on  foreign  policy,  thus  failing  to  provide  a  clear  political 
direction.  In  June  2023,  the  Presidency  Chairwoman  raised  a  vital  entity  interest  veto  on 
Bosnia and Herzegovina joining the three regional mobility agreements.  

The outgoing Council of Ministers had a minimal legislative output, adopting only three draft 
laws and three strategic documents by end 2022.  

The new Council of Ministers, appointed in late January, took some significant steps to adopt 
EU reforms following the granting of candidate status. A state budget for 2023 was adopted 
in  March. The Council of Ministers adopted a strategy on organised crime, an updated risk 
assessment  and  accompanying  action  plan  on  anti-money  laundering  and  combating  the 
financing  of  terrorism,  as  well  as  the  strategies  and  action  plans  on  migration  and  on 
terrorism.  It  also  appointed  a  supervisory  body  for  the  implementation  of  the  national  war 
crimes processing strategy. The contact point with Europol finally started operations in June 
2023, after a 5-years long delay. The Council of Ministers also endorsed a set of draft laws, 
notably  on  integrity  in  the  judiciary;  torture  prevention  (designating  the  Ombudsman  as 
national preventive mechanism); on foreigners, and freedom of access to information. These 
laws  were  adopted  by  Parliament  in  August  and  September  2023.  Besides  the  political 
criteria,  the  Council  of  Ministers  also  adopted  draft  amendments  on  service  in  the  armed 
forces  and  a  strategy  on  climate  change,  and  appointed  the  directors  of  several  institutions 
and  bodies  (Intelligence  and  security  agency,  Service  for  foreigners,  Railway  regulatory 
board); other vacancies remain pending, including for the boards of the Central Bank and of 
the Communication Regulatory Agency. The Council of Ministers urgently needs to appoint 
the National IPA Coordinator (NIPAC). 

Besides  the  chairwoman,  there  is  only  one  woman  out  of  nine  ministers  in  the  Council  of 
Ministers, in charge of civil affairs (previously two, in charge of foreign affairs and defence). 

Entity and cantonal governments worked regularly, adopting their own budgets.  

The Federation government completed the whole 2018-2022 mandate in a caretaker capacity; 
in early April the outgoing prime minister was convicted in first instance for abuse of office. 
There were further delays in the appointment of a new Federation entity government after the 
October 2022 elections and the electoral changes imposed by the High Representative. In late 
April,  the  High  Representative  intervened  once  again  by  suspending  the  Federation  entity 
constitution to ensure the appointment of a new government, supported by the same parties as 
the state-level ruling coalition.  

The  new  Federation  government  includes  4  women  ministers  out  of  17,  with  portfolios 
covering  traditionally  soft  policy  areas  (education  and  science;  culture  and  sport;  transport 
and  communications;  environment  and  tourism).  The  2015-2023  Federation  government 
included 3 women ministers, including the deputy prime minister in charge of finance.  

The new government of the Republika Srpska entity, in office since December 2022, adopted 
legislative  initiatives  aimed  at  restricting  fundamental  freedoms  and  the  space  for  civil 
society, including amendments to re-criminalise defamation and a draft law targeting NGOs 
as foreign agents. The entity government again proposed legislation on immovable property, 
defying constitutional jurisprudence that had clarified that it had no competence to do so, and 
legalised the non-implementation of the rulings of the Constitutional Court in the entity. 

Following  the  October  election,  eight  cantons  out  of  ten  appointed  new  governments.  The 
Brčko District assembly reshuffled its government in March 2023.  

No  steps  were  taken  to  develop  and  implement  a  common  action  plan  of  socio-economic 

17 

 
 
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.  

The  policy  dialogue  with  the  EU  resumed  during  the  reporting  period:  the  sixth  cycle  of 
sectoral  subcommittees  under  the  SAA,  opened  in  2020,  was  completed  by  the  SA 
Committee  in  June  2023  and  SA  Council  in  July  2023.  The  Council  of  Ministers  should 
urgently  take  measures  to  facilitate  policy  dialogue  within  the  SAA  bodies,  including  by 
simplifying  procedures,  empowering  the  Directorate  for  European  Integration  (DEI)  to 
submit preparatory documents to the Commission without unnecessary and lengthy political 
adoption, and appointing  permanent  delegates to  sectoral  subcommittees.  No action has yet 
been  taken  on  the  recommendations  which  the  European  Commission  addressed  to  the 
Council of Ministers at an extraordinary meeting of the SA Committee in May 2022. 

The Council of Ministers and the DEI should step up their coordinating role in EU matters, 
including by providing comprehensive assessment of the countrywide level of alignment with 
the  EU  acquis  and  by  ensuring  proactive  follow-up  to  the  Commission’s  recommendations 
with  the  competent  authorities,  including  at  political  level  where  needed,  ensuring 
accountability in case of non-performance. This is key to improving the quality of input for 
policy dialogue, including in view of the Commission’s annual enlargement package. 

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  the  effective  use  of  applicable  legislation  on 
coordination  of  EU  matters  and  commitment  of  the  coordination  mechanism  structures  at 
political level (collegium and ministerial conferences).  

As a key priority and outstanding obligation under the SAA, Bosnia and Herzegovina needs 
to develop and agree with the Commission a national plan for the adoption of the acquis 
(NPAA)  that  reflects  the  role  that  all  levels  of  government  play  in  aligning  with  and 
enforcing  the  EU  acquis.  The  programme  for    EU  integration,  prepared  by  DEI  and  still 
pending  approval  by  the  Council  of  Ministers,  is  only  a  first  step  towards  the  necessary 
NPAA. The action plan on the 14 key priorities is also still pending agreement by the Council 
of Ministers.   

Bosnia and Herzegovina adopted a number of protectionist measures that are in violation of 
SAA obligations, commitments and procedures, including a wood export bans and cantonal 
lists of medicines, and failed to  address  long  outstanding breaches, e.g. on excise duties on 
beer. These actions marked a clear step backwards in the implementation of the SAA. 

For the second year in a row, Bosnia and Herzegovina also submitted its  economic reform 
programme (ERP) with a 2-month delay.   

Authorities  across  the  country  have  little  capacity  for  coordination  and  policy  planning, 
including  on  EU  matters.  The  Republika  Srpska  entity  adopted  a  strategy  on  local  self-
government in February 2023; such a strategy remains pending in the Federation entity. 

Civil society  

The  Opinion’s  key  priority  11  on  ensuring  an  enabling  environment  for  civil  society  still 
needs to  be addressed, notably by upholding European standards on freedom  of association 
and  freedom  of  assembly.  Meaningful  and  systematic  consultations  with  civil  society  have 
yet  to  be  ensured  as  part  of  an  inclusive  policy  dialogue.  A  framework  for  the  transparent 
funding of civil society organisations still needs to be adopted. The reintroduction of criminal 

18 

 
 
penalties for defamation in the Republika Srpska entity, which entered into force in August 
2023,  severely  impacts  the  environment  for  civil  society.  Legislative  initiatives  in 
parliamentary procedure in the Republika Srpska entity to target civil society organisations as 
foreign agents, if adopted, would mark a regrettable and undeniable major step backwards.  

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  the  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.  The  space  for  civil  society  is  particularly 
under threat in the Republika Srpska entity, due to continued attacks by the political leaders, 
which  have  led  to  instances  of  physical  assault,  as  in  March  2023  in  Banja  Luka.  The 
Republika Srpska entity also reintroduced criminal penalties for defamation in July 2023. The 
legislative initiative targeting civil society organisations as foreign agents, if adopted, would 
severely curtail civil liberties in the entity. (See also Chapter 23 – Fundamental Rights) 

The  legislation  on  public  consultations  is  uneven  across  the  country,  and  meaningful  and 
systematic  consultations  must  be  ensured.  The  e-consultation  web  platform  is  underutilised 
and  is  not  in  use  at  entity  or  cantonal  level,  where  most  legislation  of  public  interest  is 
developed and adopted. Some six years after its adoption in 2017, the Council of Ministers 
still needs to enact its charter on cooperation with civil society organisations.   

Grassroot  civil  society  organisations  proactively  advocate  for  policy  changes.  Activists 
dealing  with  issues  perceived  as  sensitive  (anti-corruption,  women’s  rights,  rights  of 
LGBTIQ  persons,  migrants,  the  environment)  continued  to  be  subject  to  threats,  abuse  and 
physical attacks. A framework for the transparent and impartial distribution of public funds to 
associations is needed across the country. Civil society organisations that provide services to 
disadvantaged  groups,  in  place  of  public  authorities,  should  receive  appropriate  public 
funding.  Women’s  associations  in  particular  play  a  key  role  in  reaching  out  to  the  most 
vulnerable, including victims and survivors of domestic and gender-based violence. In some 
instances, the authorities abused the tax framework to intimidate civil society groups. There 
is  no  state-level  legal  framework  on  volunteering,  which  is  regulated  by  the  entities  and 
Brčko District.  

Civilian oversight of the security and intelligence sector 

The  Parliamentary  Assembly’s  joint  committee  on  defence  and  security  held  3  sessions  in 
2022  (6  in  2021,  10  in  2020).  The  joint  committee  for  the  oversight  of  the  Intelligence-
Security  Agency  (OSA)  did  not  meet  in  2022.  A  new  OSA  director  was  appointed  in 
February  2023.  The  legislation  on  the  OSA  has  not  yet  been  amended  to  address  the 
procedural  shortcomings  identified  by  the  Constitutional  Court  in  June  2017,  6  years  ago. 
The Military Commissioner, who oversees the protection of the human rights and freedoms 
of defence personnel, opened 62 proceedings in 2022, completing 55 of them.  

2.1.2. Public administration reform  
Bosnia and Herzegovina is at an early stage of preparation and made some progress in public 
administration  reform  (PAR).  Some  positive  steps  were  taken  by  (i)  adopting  the  PAR 
coordination arrangement (‘common platform’), including a political decision-making body; (ii)  
implementing  the  comprehensive  and  countrywide  public  finance  management  strategy,  (iii) 
improving capacity for public consultation at state level and on regulatory impact assessment in 
the  Republika  Srpska  entity,  (iv)  adopting  a  strategy  on  human  resource  management  in  the 

19 

 
 
Federation entity, (v) improving the professional development and performance appraisal in the 
Federation entity and at state level, and (vi) adopting a Law on freedom of access to information, 
aimed  at  fostering  pro-active  disclosure  and  transparency.  Some  five  years  after  adoption,  the 
PAR action plan has been implemented only to a limited extent. Civil service laws are still not 
harmonised with each other and merit principles are not enshrined in recruitment procedures. The 
monitoring of human resources is not effective in detecting irregularities. The political decision-
making  body  included  in  the  ‘common  platform’  still  needs  to  become  operational  to  steer 
reforms  effectively.  The  capacity  of  entity-level  PAR  coordinators  remains  weak.  In  line  with 
key priority 14 of the Commission Opinion, 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  policymaking.  Last 
year’s recommendations were partially implemented.  

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

→  adopt and start implementing the revised action plan on the PAR strategic framework 2023-
2027 at each government level, while prioritising activities on digitalisation of services and 
adopting the outstanding legal framework for sectoral strategic planning at state level; 

→  establish  a  functioning  coordination  structure  with  a  political  decision-making  body  and 
upgrade  the  staffing  and  skills  of  PAR  coordinators  to  steer  the  implementation  of  public 
administration reforms across all levels of government;   

→  ensure a professional civil service system by amending state and entities’ civil service laws in 
line  with  merit  principles  and  establishing  performance-based  monitoring  for  transparent 
human-resource management at all levels of government to detect irregularities. 

Strategic framework for public administration reform 

The 2018-2022 strategic framework on public administration reform and the related 2020-
2022 PAR action plan were extended. However, the action plan still needs to be revised and 
made more credible and realistic in its costing and in achieving tangible results, in particular 
on digital services. Some 5 years after its adoption in 2018, a first monitoring report showed 
that  only  14%  of  the  overall  PAR  action  plan  activities  were  implemented.  Insufficient 
political support  and weak PAR coordinator’s capacities at entities level continue to hinder 
effective  steer  of  reforms.  The  political  decision-making  body  foreseen  in  the  ‘common 
platform’  still  needs  to  become  operational  to  steer  the  agenda  on  public  administration 
reform. The financial sustainability of the reform is not guaranteed, and recent action plans 
on PAR remained donor-driven with very limited domestic budgetary contributions.  

Policy development and coordination  

The  policy-making  system  in  Bosnia  and  Herzegovina  continues  to  be  fragmented.  The 
legislative framework on medium-term policy planning is unevenly developed and regulated 
through different laws. The Council of Ministers needs to expedite as matter of urgency the 
adoption  of  a  valid  regulatory  framework  on  strategic  planning  based  on  the  concept  note 
developed  by  the  Department  of  Economic  Planning.  There  was  no  progress  in  developing 
methodological  guidance  for  country-wide  sectoral  strategic  planning  at  state  level.  The 
quality control functions at all centre of governments needs to be strengthened and capacities 
improved to  coordinate  policy-planning processes in  the annual  and medium term.  Sectoral 
costs are not always reflected in strategies and no progress has been made in linking these to 
a medium-term budgetary framework. Some quality criteria for sectoral policies are in place, 
but they do not contain information on progress and objectives. Bosnia and Herzegovina has 

20 

 
 
not yet developed its first national programme for the adoption of the acquis (NPAA), as 
required by the SAA, for which the proposed programme of EU integration is only a start. 

The legal framework for inclusive and evidence-based policy development is in place but is 
implemented inconsistently. Some progress was noted in this area in Republika Srpska entity, 
by  introducing  regulatory  impact  assessment  to  be  conducted  also  for  draft  secondary 
legislation.  However,  regulatory  impact  assessments  are  not  used  to  prioritise  policy 
proposals  and  are  not  used  as  planning  tool.  Collection  and  use  of  administrative  data  for 
policymaking  are  not  ensured.  The  legal  framework  on  public  consultations  needs  to  be 
consistently  applied  at  all  levels  of  government.  The  Republika  Srpska  entity  government 
adopted  new  guidelines  for  consultations  in  order  to  improve  transparency  early  in  the 
legislative planning. 

State level government undertook some efforts to improve capacities of various public bodies 
in using the e-consultation platform. However, entities’ line ministries need to upgrade those 
and improve the oversight function to ensure their quality.  

The  regulatory  framework  for  standards  for  monitoring  and  reporting  on  key  government 
planning  documents  at  all  levels  is  in  place.  Some  efforts  were  undertaken  to  improve 
sectoral  monitoring  by  adopting  a  new  Decision  on  annual  work  planning  and  method  of 
monitoring and reporting at state level. However, regular sectoral monitoring reports remain 
unpublished,  as  is  also  the  case  for  implementation  reports  of  government  annual  working 
plans. All of this hampers public scrutiny of government work.  

Public financial management  

All levels of government in Bosnia and Herzegovina started implementing the comprehensive 
strategy  for  the  reform  of  public  financial  management  (PFM),  progressing  with  40%  of 
activities planned at each level. PFM monitoring reports for 2022 have been adopted at state 
and entities’ level and a comprehensive 2022 PFM monitoring report is pending adoption. A 
functional  and  regular  budget  planning  cycle  needs  to  be  in  place  for  an  effective  public 
finance system. The credibility of the medium-term budget frameworks needs to be enhanced 
by (i) improving the links between annual strategic planning and annual budget process and 
(ii) strengthening capacities and regulation to improve public investment management at all 
levels  of  government.  All  levels  of  governance  should  establish  the  necessary  IT  pre-
conditions in order to implement the law on programme budgeting and medium-term budget 
planning  and  adopt  similar  legislation  at  state  level  and  in  the  Republika  Srpska  entity. 
Institutions  at  all  levels  need  to  improve  the  public  internal  financial  control,  and  public 
procurement  process  as  well  as  monitoring  of  fiscal  risks  related  to  public  companies. 
Particularly, publicly available registers of public companies need to be established for better 
transparency. 

Bosnia and Herzegovina has not  yet  achieved sufficient  budget transparency. The lack of 
harmonisation  of the charts of accounts at  state and entity  level  makes it difficult  to  access 
consolidated  data.  In-year  reporting  still  needs  to  improve  at  all  levels  of  government. 
Available budgetary information is still incomplete and assessing the overall budgetary and 
fiscal policy is difficult.  

Public service and human resources management 

The  merit-based  recruitment,  promotion  and  dismissal  of  civil  servants  using  objective 
criteria is  not  fully  ensured, particularly in  the entities and the Brčko District.  Civil  service 
laws have not yet been amended to provide a clear and comparable scope of the civil service 
across the government levels. The laws do not clarify which institutions are included in the 

21 

 
 
civil  service,  which  positions  belong  to  civil  servants,  and  what  the  senior  and  middle 
management categories are. These differences undermine the mobility of civil servants across 
government levels. Suitable coordination mechanism for human resources and civil service is 
needed to support that cooperation, and particularly so between the Federation and cantonal 
level government. 

The  recruitment  process  needs  to  become  more  transparent  and  better  ensure  the 
professionalisation of the civil service. The digitalisation of state-level recruitment is ongoing 
and  e-application  is  being  applied.  The  procedures  for  staff  transfers  in  the  case  of 
competencies  transfer  to  the  State-level  institutions  have  improved,  with  better  specified. 
However, entity-level laws on civil service leave excessive discretion and do not require the 
best  candidate  to  be  appointed,  allowing  political  appointees  to  influence  recruitment, 
particularly for senior positions. As a result, at cantonal level, the final selection may depend 
on ethnic background rather than merit. Additionally, excessive use of acting positions should 
be constrained, especially in Republika Srpska entity. State-level senior managers should not 
remain in their posts after their mandate comes to an end, and regular open recruitments for 
such  positions  need  to  be  organised.  The  system  needs  to  offer  the  right  incentives  so  that 
more professional candidates apply for public sector positions. Selection commissions should 
be  free  from  political  influence  in  order  to  guarantee  that  the  best  qualified  candidates  are 
recruited.  Constitutional  rules  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  of  civil  servants’  complaints  and  need  to  improve  capacities.    All  levels  of 
government  need  to  improve  the  collection  of  data  on  gender  equality  in  public 
administration  and  systematically  promote  the  adoption  of  institutional  policies  on  gender 
equality and sexual harassment. 

Human  resources  management  (HRM)  remains  highly  fragmented.  Pursuant  to  the 
common HRM  policy framework, the Federation entity  adopted the 2022-2027 strategy  for 
the  development  of  HRM  in  the  civil  service  structures,  including  cooperation  with  the 
cantonal level. State level government and Republika Srpska entity need to do so as well, in 
coordination  with  each  other.  Transparent  monitoring  of  HRM  performance  and  related 
capacity and data on HRM are weak across all levels of government and there is a consistent 
lack of data. 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 throughout the civil service. All levels of government should publish 
HRM monitoring reports and ensure interoperability of HRMIS with payroll databases. 

Civil  servant  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,  all  of  which  hinder  fairness. 
Furthermore,  criteria  to  award  salary  supplements  are  unclear,  and  there  is  no  information 
published  at  any  level  of  government  on  average  salary  levels  by  job  category.  The  state 
budget adopted in March 2023 provides for some improvement and an increase in the salary 
base of state-level civil servants.  

Civil service agencies need more resources for training and professional development. Some 
progress was made, as the Federation entity established the new online training management 
system that is now interoperable with the Human Resource Management Information System 
22 

 
 
for civil service. Overall, although a performance appraisal system is in place, it is not used 
properly  and  systematically  to  justify  promotions  or  to  distinguish  good  from  bad 
performance. 

There  is  no  systemic  and  consolidated  data  on  the  integrity  of  civil  servants.  Measures  to 
promote  integrity  in  the  public  service  are  only  partially  in  place  and  are  not  applied 
systematically.  Additionally,  there  has  been  no  legislative  development  at  Federation  level 
with regard to whistle-blower protection, and declaration of assets at Republika Srpska entity. 

Accountability of administration  

No progress was made on setting out in legislation the different functions of administrative 
bodies at  all levels  of government  or the conditions for  establishing,  merging  or abolishing 
them. There is still no clear supervision or reporting lines between ministries and subordinate 
institutions and delegation of decision-making to senior civil servants or middle management 
is lacking.  

The  level  of  parliamentary  scrutiny  varies  across  levels  of  government.  No  progress  was 
made  in  improving  the  uptake  of  recommendations  from  oversight  mechanisms  such  as 
parliamentary  scrutiny  and  from  independent  institutions  –  such  as  Ombudsmans  and  State 
Audit  Institutions,  in  the  public  administration,  compromising  citizens’  rights  to  good 
administration.  

Legislation  on  the  right  to  access  information  remains  fragmented.  In  August  2023  the 
Parliament adopted a Law on freedom of access to information, intended to improve the pro-
active  disclosure  of  information  and  the  transparency  of  state-level  institutions.  The 
independence  of  the  appeal  process  still  needs  to  be  brought  in  line  with  international  and 
European standards. Rules on data protection and access to information are still interpreted in 
a  way  that  protects  private  rather  than  public  interests  and  such  rights  are  inconsistently 
ensured across government levels.  The number of Ombudsman recommendations on access 
to information have slightly increased in 2022 compared to 2021.  

The  varying  efficiency  of  courts  across  the  country  make  citizens’  rights  to  administrative 
justice  uneven.  No  progress  was  made  in  putting  in  place  effective  remedies  for  the 
protection of rights to judgment within a reasonable time at any level of government and the 
situation remains particularly problematic in the Federation entity. 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.  

Service delivery to citizens and businesses  

The  legal  framework  for  a  user-oriented  administration  varies  substantially  across  the 
country.  A  comprehensive  countrywide  policy  on  service  delivery  and  clear  institutional 
functions  at  any  level  of  government  together  with  a  catalogue  on  e-service  are  lacking. 
There is a need to establish an inventory on administrative burden in service provision, while 
simplifying  procedures  and  aligning  sectoral  laws  with  the  Law  on  general  administrative 
procedures.  The  lack  of  electronic  signature  infrastructure  for  citizens,  impedes  further 
digitalisation.  Digitalisation  has  only  advanced  in  taxes  and  customs,  although  slowly.  
Encouraging  a user-oriented administration, including through the completion of a coherent 
legal  framework,  would  enable  an  interoperable  e-signature  system  across  the  country  and 
facilitate the creation of a single digital market.  

23 

 
 
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.  Limited  progress  was 
made  during  the  reporting  period  to  address  the  related  Opinion  key  priorities  and  the 
findings of the Expert Report on rule of law issues (‘Priebe Report’)11.  

Functioning of the judiciary 

Bosnia and Herzegovina is in between an early stage and some level of preparation in the 
area of the judiciary. Some progress was made in addressing Opinion key priority 6 on the 
functioning of the judiciary. Persistent and evident signs of deterioration continue to require 
urgent  measures  to  strengthen  integrity  and  regain  public  trust  in  the  judiciary.  The  poor 
functioning of the judicial system continued to undermine citizens’ enjoyment of rights and 
the fight against corruption.  

In September 2023, Bosnia and Herzegovina amended the Law on the HJPC with the aim of 
establishing  a  system  to  verify  the  asset  declarations  of  judges,  prosecutors  and  HJPC 
members.  Compared  to  the  version  on  which  the  Venice  Commission  were  consulted,  the 
system of verification of assets provided for by the amendments that were adopted has been 
weakened as regards the right of the HJPC to request additional information from natural and 
legal  persons.  In  addition,  under  the  adopted  amendments  external  experts  tasked  with 
monitoring the functioning and enforcement of the asset declaration system are not allowed 
to  access  personal  data  contained  in  asset  declarations  and  supporting  documents.  These 
provisions hamper the effectiveness of the asset-declaration system and therefore need to be 
amended,  to  ensure  that  the  HJPC  and  the  external  experts  can  effectively  access  all 
information  that  is  necessary  to  exercise  the  functions  provided  for  them  in  the  law.  All 
institutions in the country must now cooperate constructively and in good faith with the HJPC 
to  fully  implement  the  law  and  ensure  the  effectiveness  of  the  integrity checks.  Any  issues 
that may impede the implementation of the law need to be addressed at the latest in the new 
comprehensive  Law  on  the  HJPC.  The  Council  of  Ministers  also  appointed  a  supervisory 
body to oversee the implementation of the national war crimes strategy. 

The Constitutional Court suspended and then quashed several legal and political acts adopted 
by the Republika Srpska entity. By the end of 2022, the terms of office of two judges of the 
state-level Constitutional Court expired due to age limits. The entity assemblies have not yet 
proceeded  to  replace  them,  thus  impairing  the  Court’s  decision  making.  The  Republika 
Srspka entity assembly called on state-level constitutional judges to resign and legalised the 
the  non-implementation  of  the  rulings  of  the  Constitutional  Court,  in  breach  of  the 
constitutional  and  legal  framework  of  the  country.  While  the  High  Representative  annulled 
these laws, Republika Srpska entity authorities determined to enforce them anyway.  

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

→  urgently appoint constitutional judges from both entities to all vacant positions and thus 

11 http://europa.ba/wp-content/uploads/2019/12/ExpertReportonRuleofLawissuesinBosniaandHerzegovina.pdf 
24 

 
 
 
ensure the full composition and functioning of the Constitutional Court; and for the courts 
in  general,  consistently  appoint  judges  based  on  merit,  without  prevalence  of  ethnic 
criteria, and appraise the performance of judges based on quality criteria; 

→  revise and implement the integrity-related provisions of the Law on the HJPC to ensure 
the  effectiveness  of  integrity  checks  in  line  with  European  standards,  including  by 
enabling  the  HJPC  and  external  experts  to  access  all  information  that  is  necessary  to 
properly  perform  their  functions;  finalise  and  adopt  the  new  Law  on  the  HJPC  and  the 
new law on the Courts of Bosnia and Herzegovina, in line with the Opinion of the Venice 
Commission;  

→  adopt  a new justice sector reform  strategy and increase efforts to  effectively  implement 

the revised national war crimes strategy; 

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,  in  the  Experts’  Report  on 
Rule  of  Law  issues  in  Bosnia  and  Herzegovina  (‘Priebe  Report’),  and,  where  relevant,  the 
activities  included  in  the  2021-2023  HJPC  reform  programme  and  beyond.  The  strategy 
should  be  supported  by  sufficient  budgetary  allocations  and  an  efficient  mechanism  of 
governance,  monitoring  and  reporting  on  its  performance,  with  the  possibility  to  adopt 
corrective actions.  

Management body 

The  High  Judicial  and  Prosecutorial  Council  (HJPC)  is  the  single  judicial  self-governance 
body. In the reporting period, it appointed the state-level Chief Prosecutor and the President 
of  the  Court  of  Bosnia  and  Herzegovina.  The  Council  still  struggles  to  regain  public  trust, 
including  in  the  professional  community,  as  it  continued  to  adopt  inconsistent  and 
inadequately  reasoned  decisions  on  appointment  decisions.  The  2021-2023  HJPC  reform 
programme has had little impact on merit-based appointments, accountability, efficiency and 
transparency, in the absence of an efficient monitoring mechanism and of a set of qualitative 
and  quantitative  indicators  to  monitor  trends  in  organised  crime  and  corruption  cases.  The 
HJPC has to step up its oversight role and assume responsibility for substantial reforms. More 
tangible results are expected, notably in the area of fighting corruption and nepotism in the 
judiciary.  The  HJPC  should  increase  its  own  accountability  by  providing  thorough  and 
transparent reasoning of its final decisions, especially on appointments, in line with European 
standards.  The  HJPC  has  a  communication  strategy,  its  action  plan,  and  a  communication 
plan  on  ethics,  integrity  and  prevention  of  conflict  of  interest.  Training  sessions  for 
representatives  of  the  media  and  the  judiciary  were  organised  by  the  HJPC  in  November 
2022.  

The HJPC should implement a smaller but better targeted number of result-driven activities 
to  improve  the  quality  of  justice.  Its  secretariat  has  been  further  strengthened  with  more 
permanent staff. The HJPC must urgently improve its monitoring of the judicial management 
structures and ensure the accountability of court presidents and chief prosecutors in cases of 
poor performance. 

Independence and impartiality 

The  independence  and  impartiality  of  the  judiciary  did  not  improve,  despite  the  newly 
introduced amendments  to  the HJPC rules  of procedure aiming  at  improving  appointments. 
Executive and legislative authorities failed to adopt additional safeguards. The HJPC, as well 

25 

 
 
as all courts and prosecutor’s offices, should undertake more efforts to restore public trust in 
the independence of the judiciary.  

The HJPC strived to improve its appointment policies, most notably by amending the relevant 
rules  of  procedure  to  ensure  that  appointments  are  based  on  pre-determined,  objective  and 
accessible  criteria.  These  amendments  have  yet  to  have  a  tangible  impact.  The  duration  of 
appointment  procedures  remains  too  long  (8  to  10  months).  The  re-opening  of  vacancies, 
often  without  good  reasons,  can  extend  this  period  further.  The  amendments  provide  for 
obligatory  processing  of  applications  online,  which  has  the  potential  to  shorten  procedures. 
However, rules on appointments, disciplinary responsibility, career advancement and conflict 
of  interest  of  judges  and  prosecutors  continue,  in  practice,  to  be  applied  inconsistently  and 
with  overly  broad  discretion.  The  adopted  integrity-related  amendments  to  the  Law  on  the 
HJPC should be applied effectively so as to contribute to improvements in this regard. 

A  new  comprehensive  Law  on  the  HJPC  should  provide  for  a  single  annual  entry 
examination to join the judiciary, 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.  

The adopted integrity-related amendments to the Law on the HJPC introduce binding rules on 
conflict of interest for the entire judiciary and the HJPC. 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 reallocation 
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  reallocating  cases  manually.  Undue  external  pressures  have 
increased,  especially  by  political  leaders  who  publicly  target  certain  judicial  office  holders 
and their decisions, notably the prosecutors in the case Novalić et al. on public procurement 
fraud  of  COVID-19  medical  equipment.  The  threat  reporting  mechanism  and  subsequent 
public reactions of the HJPC must be reviewed to ensure consistency.  

The Constitutional Court suspended and then quashed several legal and political acts adopted 
by the Republika Srpska entity. In June 2023, the Republika Srpska entity legalised the non-
publication of decision of the High Representative and the non-implementation of the rulings 
of  the  Constitutional  Court,  in  breach  of  the  constitutional  and  legal  framework.  The  High 
Representative  annulled  such  laws  in  July.  Entity  authorities  determined  to  enforce  them 
anyway.  By  the  end  of  2022,  the  terms  of  office  of  two  judges  of  the  state-level 
Constitutional  Court expired due to age limits.  The entity  assemblies have not  yet  replaced 
them, thus impairing the Court’s decision-making. 

Accountability 

In September 2023, Bosnia and Herzegovina amended the Law on the HJPC with the aim of 
establishing  a  system  to  verify  the  asset  declarations  of  judges,  prosecutors  and  HJPC 
members.  Compared  to  the  version  on  which  the  Venice  Commission  were  consulted,  the 
system of verification of assets provided for by the amendments that were adopted has been 
weakened as regards the right of the HJPC to request additional information from natural and 
legal  persons.  In  addition,  under  the  adopted  amendments  external  experts  tasked  with 
monitoring the functioning and enforcement of the asset declaration system are not allowed 
to  access  personal  data  contained  in  asset  declarations  and  supporting  documents.  These 
26 

 
 
provisions hamper the effectiveness of the asset-declaration system and therefore need to be 
amended,  to  ensure  that  the  HJPC  and  the  external  experts  can  effectively  access  all 
information  that  is  necessary  to  exercise  the  functions  provided  for  them  in  the  law.  All 
institutions in the country must now cooperate constructively and in good faith with the HJPC 
to fully implement the law and ensure the effectiveness of the integrity checks, which shall be 
under close external supervision. Any issues that may impede the implementation of the law 
need  to  be  addressed  at  the  latest  in  the  new  comprehensive  Law  on  the  HJPC.  The  HJPC 
should  ensure  the  security  for  documents  and  correspondence  of  the  special  verification 
department  within  the  HJPC  Secretariat.  In  2022,  only  16%  of  all  judicial  office  holders 
published  their  asset  declarations  voluntarily  (221  declarations),  including  31%  of  all 
managers (30 declarations from court presidents and chief and deputy chief prosecutors). The 
adopted amendments now oblige all judicial office holders to publish their asset declarations. 

Integrity  plans  are  in  place  in  almost  all  courts  and  prosecutor’s  offices,  yet  with  limited 
results. An improved and comprehensive ethics and integrity training is needed, including for 
newly appointed judges and prosecutors. In April 2023, the HJPC introduced a new system to 
evaluate  candidates,  notably  for  promotions,  taking  into  account  their  disciplinary  records. 
This system must be applied consistently.   

Disciplinary procedures continue to have little dissuasive effect, despite their number being 
high  compared  to  the  European  average.  In  2022  the  Office  of  the  Disciplinary  Counsel 
(ODC)  registered  840  complaints  (9.2%  less  than  registered  in  2021),  of  which  76  were 
initiated  ex  officio  against  judicial  office  holders  (7%  more  than  in  2021)  and  filed  41 
disciplinary charges, including six against chief prosecutors and court presidents. The HJPC 
disciplinary  commissions  completed  a  total  of  48  disciplinary  proceedings  (of  which  24 
registered  in  2022).  A  total  of  33  procedures  led  to  disciplinary  measures,  including  seven 
against  managerial  judicial  office  holders  (court  presidents,  chief  prosecutors),  resulting  in 
two demotions, 23 cases of salary reduction and six temporary suspensions. 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 end, the HJPC has to 
apply consistently the criteria of suitability of candidates for judicial posts laid down in the 
newly  amended  rules  of  procedure,  and  in  line  with  Commission  recommendations. 
Disciplinary hearings and decisions need to reach the wider public more effectively.  

There  has  been  no  progress  in  addressing  the  shortcomings  concerning  composition  and 
potential conflict  of interest  in  the formation of  disciplinary panels  in  the HJPC. Rules and 
training  on  evidence  gathering  before  disciplinary  panels  should  be  improved  in  line  with 
Commission recommendations, as should the evaluation of ethical standards. Introducing an 
inspectorate  service  or  vesting  an  existing  body  with  similar  functions  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 as to fairness. This was again evident in a 
March-April 2023 appointment to the Republika Srpska entity Prosecutor’s Office, where the 
HJPC  appointed  a  candidate  ranked  last,  on  the  pretext  of  ethnic  balance.  Trust  in  the 
appointment system is at its lowest, including within the professional community. In addition, 
there  is  a  concern  with  continued  delays  in  appointments,  which  results  in  courts  being 
unable to appoint panels for cases, endangering the effective delivery of justice, especially in 

27 

 
 
cases of recusal. This further affects the courts’ performance. The HJPC must urgently find 
methods  to  curtail  delayed  vacancy  procedures,  which  are  detrimental  to  its  main  function, 
namely, the merit-based, transparent, and timely appointment of judges and prosecutors.   

While awaiting legislative reforms to introduce judicial review of HJPC decisions, the HJPC 
should provide clear reasoning for each appointment, strictly abiding by the amended rules of 
procedure and online application system. 

Performance  appraisals  require  reform  to  balance  quality  and  quantity  criteria,  which 
should apply equally to all judges and prosecutors. Once the legislation allows for it, quality-
based performance appraisal should be reintroduced as it is a European standard.  

Quality of justice 

Training for judges and prosecutors is handled by the entity-level judicial and prosecutorial 
training  centres,  which  are  coordinated  by  the  HJPC.  The  respective  responsibilities  of  the 
HJPC  and  of  the  entity  training  centres  remain  unclear,  leading  to  inconsistencies.  The 
provisions  on  establishing  training  centres  and  their  operation  need  to  be  clarified  and  the 
coordination role of the HJPC needs to be strengthened. Educating judges and prosecutors is 
crucial  for  the  quality  of  the  justice  system.  Selecting  competent  trainers,  devising  training 
programmes,  assessing  trainers  and  evaluating  the  impact  of  trainings  conducted  should  be 
closely  monitored  and  improved  where  needed.  The  total  budget  for  training  in  2022  was 
EUR 767 710 (EUR 645 616 in 2021), a 19% increase compared to 2021. 

The  national  case  management  system  (CMS)  produces  reliable,  detailed  statistics  and 
reports at different levels (judges, courts, national) including on case flow, human resources, 
and  duration  of  the  pending  cases.  However,  the  information  generated  from  this  system  is 
not  being  fully  utilised  for  decision-making  by  the  HJPC,  court  presidents  and  chief 
prosecutors. 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 (3.0 for civil or commercial cases, 3.5 for  administrative cases, and 3.0 for 
criminal cases). Bosnia and Herzegovina delivers good quality and reliable judicial data in a 
timely manner to the CEPEJ Dashboard Western Balkans project. The HJPC needs to step up 
its oversight and management on the basis of reliable statistical data on the performance of 
the judicial system, including on case reallocations. In 2022, the cases reallocated  manually 
by  heads  of  courts  and  prosecution  offices  in  courts  in  2022  were  496 828  (91%  of  those 
unresolved  cases  were  reallocated  for  “other  reasons”).  One  chief  prosecutor  has  been 
subjected to a disciplinary procedure for potential misuse, one has been  removed from their 
managerial post and another one is subject to an ongoing disciplinary procedure. 

The  appraisal  system  needs  specific  indicators  aligned  with  clear  goals,  targets  and 
benchmarks. To address this issue, the HJPC needs to establish clear protocols and guidelines 
for  decision  making  within  the  judiciary,  and  to  regularly  monitor  performance  data  and 
crucial  areas  (anti-corruption,  organised  crime  and  electoral  fraud).  The  quota  system  for 
courts has helped to reduce the cases backlog in courts by more than 50% since the start of its 
usage.  Introducing  an  automatic  case-weighing  system  and  time  limits  as  performance 
measures should also be considered, in order to improve the system. Furthermore, developing 
a fully inclusive and efficient justice sector monitoring mechanism with EU assistance will be 
key to ensuring effective implementation of the justice reform. 

The  justice  system  still  lacks  transparency,  but  some  efforts  for  improvement  were 
undertaken.  The  HJPC  started  to  improve  the  communication  of  judicial  institutions  with 
media  and  citizens,  notably  through  media  and  web  toolkits,  a  media  action  plan,  and 

28 

 
 
guidelines  on  social  media  for  judicial  office  holders,  whose  effect  should  be  closely 
monitored.  Appropriate  training  on  public  outreach  and  communications  for  courts  and 
prosecutors’ offices remains necessary.  

Regarding the harmonisation of jurisprudence, the case-law portal created in 2021 by the 
HJPC in coordination with the four highest judicial instances in Bosnia and Herzegovina now 
allows access  to over 10 540 judicial stances,  court decisions  and legal  interpretations. The 
issues  as  regards  legal  status  and  effectiveness  of  judicial  harmonisation  panels  remain 
unresolved. Ultimately, as noted in the Opinion key priorities, 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  2022  budget  for  the  judiciary,  including  the  HJPC,  is  EUR  156.3  million  (0.67%  of 
GDP), slightly above 2021 (EUR 135.6 million). In 2022, EUR 118.7 million was allocated 
to courts and EUR 34.3 million to prosecutors' offices (compared to EUR 103.9 million and 
EUR  29.1  million  in  2021).  The  budget  is  now  the  same  as  the  Western  Balkans’  median. 
The funds remain insufficient to cover investments and to improve the judicial infrastructure, 
as  only  1.7%  of  the  budget  was  spent  on  this  line  and  over  81.5%  on  salaries  and 
compensations.  The  highly  complex  system  of  financing  judicial  institutions  is  fragmented 
with significant budget inequalities. It requires interaction with all levels of government and 
difficulties in the process of preparing the budget persist.  While the budget of the judiciary 
has  continuously  increased  over  the  last  few  years,  the  coordination  of  its  implementation 
between  the  HJPC  and  certain  levels  of  government  still  needs  to  be  harmonised,  with  the 
HJPC taking a more active role in ensuring sufficient funds among judicial institutions. The 
budgeting  system  for  prioritising  prosecutorial  resources  was  digitalised.  The  HJPC  budget 
planning  and  fund  allocation  competences  for  all  courts  and  prosecutors’  offices  in  the 
country should be strengthened.  

In 2022, Bosnia and Herzegovina had 1 000 full-time judges (23 per 100 000 inhabitants) and 
358  full-time  prosecutors  (11  per  100  000),  including  79  court  presidents  and  18  chief 
prosecutors.  According  to  CEPEJ,  the  European  averages  are  22.2  judges  and  11.8 
prosecutors per 100 000 inhabitants. A total  of  61% of judges and prosecutors  and 56% of 
managers are women.  

Efficiency  

The  length  of  court  proceedings  in  first-instance  cases  (not  for  utility  bills)  further 
decreased to 378 days in 2022 (409 in 2021, 434 in 2020), but is still high. The clearance rate 
increased  to  104%  in  2021  (99%  in  2021).  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  yet  to  be  introduced  in  the  Federation 
entity. Civil and criminal procedural  codes have to be revised to make judicial proceedings 
more efficient. Court presidents and chief prosecutors continue to manage poorly procedural 
discipline  for  trials,  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 million pending court cases, of which some 1.7 million are cases 
of unpaid utility bills, which continue to hinder efficiency. The backlog of non-utility cases 
decreased  slightly  by  5%  compared  to  2021.  Relevant  authorities  still  did  not  follow  the 
Commission’s recommendations to transfer the enforcement of small and uncontested claims 
from courts to professional bailiffs. Entity and cantonal governments did not secure sufficient 
funds  for  enforcement  departments  in  courts  or  for  access  to  information  on  debtor’s 
29 

 
 
properties. Entity-level laws and regulations on enforcement have to be amended urgently to 
increase efficiency.  

The changes to the prosecutorial quota did not deliver positive outcomes and the performance 
of the prosecutorial  system  has not  been satisfactory. Specifically, according  to  HJPC data, 
there has been an 8% decrease in  the number of indictments  in  2022 as compared to  2021. 
The HJPC needs to assess the impact of the previously amended prosecutorial quota on the 
overall  number  of  indictments  and  convictions  compared  to  dismissals  and  revise 
prosecutorial quotas accordingly.  

Domestic handling of war crime cases 

the  International  Residual 
Bosnia  and  Herzegovina  cooperates  constructively  with 
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  2022,  40%  of  all  requests  for  assistance  from  the  region  to  the  Mechanism’s 
Prosecutor  came  from  Bosnia  and  Herzegovina  (90%  in  2021).  The  number  of  indictments 
for war crimes increased in 2022, with 38 indictments against 90 defendants (21 against 56 in 
2021). 

War crime convictions by the International Criminal Tribunal for the former Yugoslavia and 
its successors are still not entered into domestic criminal records. To this end, the Ministry of 
Justice should maintain close cooperation with the IRMCT-Mechanism Registry.  

The revised National War Crime Strategy (NWCS) continued to be implemented effectively. 
The  HJPC,  within  its  mandate,  monitored  the  work  of  prosecutors  and  judges  to  that  end, 
until March 2023, when the Council of Ministers finally appointed a new supervisory body to 
oversee implementation of the strategy.  

Regional  judicial  cooperation  in  processing  war  crime  cases  has  improved  slightly.  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  must  still  be 
used  systematically.  Cooperation  with  Serbia  continued  to  improve,  with  6  indictments 
transferred  to  Serbia,  resulting  in  2  convictions  so  far  (one  each  in  2018  and  2020).  The 
prosecutor’s  offices  of  the  two  countries  have  signed  a  cooperation  agreement  to  provide 
support  for  war  crimes  witnesses,  injured  parties  and  victims.  Cooperation  with  Croatia 
continues to  face a number of impediments  on judicial  assistance;  two indictments  and one 
investigation  were  transferred  to  Croatia,  while  other  investigations  have  not  yet  led  to 
indictments.  The  protocol  with  Montenegro  is  enhancing  cooperation,  with  investigations 
conducted using transferred evidence.  

Out  of  237  cases  by  the  end  of  2022  (including  103  in  main  trial  phase),  91  proceedings 
(against  99  individuals)  are  pending  as  the  indicted  persons  are  not  available.  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  unanswered.  Similarly, 
Duško  Kornjača  –  indicted  for  crimes  against  humanity  in  2015  –  and  Tomislav  Kovač  – 

30 

 
 
indicted for genocide in 2018 – are freely residing in Serbia. Sakib Mahmuljin fled to Türkiye 
after a final sentence for command responsibility in war crimes; Türkiye has not responded to 
Bosnia and Herzegovina’s March 2023 request for extradition.  

The backlog in war crime cases continues to diminish; however, it is likely that the revised 
deadline  to  complete  their  processing  by  the  end  of  2023  will  not  be  met.  The  new 
supervisory body has to propose updated realistic deadlines. From an estimated 1 210 cases 
in July 2013, unresolved war crime cases have been reduced to 395 (-67.5%) by the end of 
2022;  around  261  of  these  are  complex  cases  (66%).  An  estimated  152  cases  against  357 
individuals (38.5% of the backlog) are pending as the suspects are not available. Reinforced 
regional cooperation is key to addressing the latter issue. In 2021, the number of confirmed 
indictments  increased  slightly,  but  conviction  rates  decreased  in  the  entities  and  the  Brčko 
District  with  16  indictments  confirmed  (13  in  2021)  and  a  67%  conviction  rate  (85%  in 
2021).  At  state  level,  there  is  some  progress  with  22  indictments  confirmed  (15  in  2021), 
although with a decrease of the conviction rate to 57% (86% in 2021). An additional 12 less 
complex  cases  were  transferred  to  entities  and  the  Brčko  District  in  2022  (25  in  2021), 
completing this process. The Prosecutor’s Office may now focus only on the most complex 
cases, improving the quality of investigations and indictments leading to convictions. 

Fight against corruption  

Bosnia and Herzegovina is in between an early stage and some level of preparation in the 
fight  against  corruption.  No  progress  was  made  in  addressing  Opinion  key  priority  7,  the 
2022  recommendations,  and  the  findings  of  the  Expert  Report  on  Rule  of  Law  issues.  The 
Ministry  of  Justice  is  yet  to  submit  a  draft  state-level  law  on  the  prevention  of  conflict  of 
interest  in  line  with  European  standards  to  the  Council  of  Ministers  for  adoption.  Selective 
and non-transparent judicial follow-up in corruption cases of public resonance is a cause of 
significant concern, alongside pressure and intimidation. Legislation is not harmonised across 
the  country.  Some  indictments  for  high-level  corruption  were  raised  during  the  reporting 
period.  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  there was a lack 
of efficient follow-up by the prosecution and judiciary. An efficient application of conflicts of 
interest  rules  and  verification  of  asset  declarations  is  only  present  in  the  Sarajevo  Canton. 
Targeted  risk  assessments  and  dedicated  measures  to  address  corruption  are  needed,  in 
particular in the most vulnerable sectors. Recommendations of the previous year have largely 
not been implemented and remain therefore valid.  

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

→  adopt  the Law on the prevention of conflict  of interest  in  state-level  institutions, in line 
with European standards, and harmonise the legislation of entities and Brčko District with 
international  standards  and  best  European  practices;  complete  the  legal  framework  and 
step up implementation on the protection of whistle-blowers;  

→  demonstrate  progress  towards  establishing  a  track  record  on  preventing  and  repressing 
high-level  corruption;  improve  cooperation  between  the  police  and  the  prosecutors’ 
offices; 

→  prepare and adopt a new state-level anti-corruption strategy and action plan. 

Track record 

Efforts  remain  insufficient  to  establish  a  track  record  on  proactive  investigations, 
31 

 
 
prosecutions  and  final  convictions  for  corruption.  In  particular,  progress  in  tackling  high-
level corruption remains insignificant and needs  to be seriously stepped up. It is imperative 
for the law enforcement agencies and the judiciary in Bosnia and Herzegovina to take a more 
proactive stance in combating organised crime and corruption. 

In high-level corruption cases, in 2022 there were 23 ordered investigations (15 in 2021), 11 
suspended investigations (6 in 2021), 18 filed indictments (12 in 2021), 5 final verdicts (3 in 
2021),  3  convictions  and  2  acquittal.  This  trend  shows  that  there  continues  to  be  an 
alarmingly low number of final convictions in high-profile cases.  

In 2022, the State Investigation and Protection Agency (SIPA) initiated 100 investigations 
(34 ex officio and 66 by order of the competent Prosecutor’s Office) into cases of corruption, 
of which 52 were finalised (193 initiated and 20 finalised in 2022). Thirty-five reports against 
57 individuals were sent to the competent prosecutors’ offices. The trend at state level shows 
that only a few investigations have been finalised.  

In  2022,  Prosecutors’  offices  issued  314  orders  to  conduct  investigations  into  corruption, 
leading  to  188  indictments  countrywide  (317  and  229  in  2021);  175  indictments  were 
confirmed (211 in 2021), including indictments from the previous period, while the number 
of convictions was 192 (143 in 2021), of which 132 were suspended sentences (98 in 2021). 
A total of 119 persons were convicted based on a plea bargain (134 in 2021). Sanctions are 
not  sufficiently  effective,  dissuasive  or  proportionate.  Plea  bargain  agreements  are  frequent 
and  lenient  sanctions  are  too  often  applied  without  sufficient  justification.  Prison  sentences 
are  often  suspended  or  even  converted  into  fines  with  little  dissuasive  effect.  Reduced 
sentences are frequent in cases in which the severity of the violation of the protected property 
significantly exceeds the minimum amount necessary for the existence of a criminal offence. 
Most of the convictions were for abuse of office or authority. The prosecution does not use 
effectively the available mechanisms to confiscate criminal proceeds. Financial investigations 
are rare and indictments frequently fail to include relevant information or evidence related to 
the illegal gain. 

The  state-level  commission  on  conflicts  of  interest  established  in  July  2020  remains 
ineffective:  it  held  a  single  session  in  2022,  and  has  only  dealt  with  a  few  cases.  The 
commission  received  2  reports  and  acted  ex  officio  in  8  cases.  It  determined  that  5  public 
officials  were  in  conflict  of  interest  (3  in  2021).  All  cases  concerned  incompatible 
involvement  of  close  family  members  in  public companies  or  private  companies  benefiting 
from the public budget. In 2 cases, the commission imposed temporary salary reductions as a 
sanction, while in the other 3 it confirmed conflict of interest but did not impose a sanction as 
persons  were  no  longer  officials.  As  regards  asset  declarations,  about  600  state-level 
officials are required to submit their financial reports for verification, out of whom only 212 
submitted their financial reports in 2022 (291 in 2021). In 2022, no proceedings for failure to 
submit declarations or inaccuracies were initiated, no reports were checked and no sanctions 
were  imposed.  The  mandate  of  the  state-level  commission  expired  in  October  2022  and 
following the elections,  a new commission  was  appointed in  March 2023. In the  Republika 
Srpska  entity,  around  4 000  office  holders  are  obliged  to  submit  financial  reports,  out  of 
whom  only  129  submitted  financial  reports  in  2022  (990  in  2021).  The  Republika  Srpska 
entity  commission  established  conflict  of  interest  in  13  cases,  but  did  not  impose  any 
sanction.  There  is  a  dual  system  of  asset  declarations  at  state  level.  Elected  officials, 
executive  officeholders  and  advisors  must  submit  regular  financial  statements  and  disclose 
their  assets  and  interests  to  the  commission  on  conflict  of  interest.  In  addition,  elected 
officials  at  all  levels  must  submit  declarations  of  their  assets  to  the  Central  Election 
Commission.  Asset  declarations  of  elected  officials  are  made  public  through  its  website, 
32 

 
 
although the CEC has no obligation or means to check their accuracy. Rules on conflicts of 
interest are still 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. In 2022 it established conflict of interest in 36 
cases,  set  up  public  databases  for  asset  declarations,  and  initiated  11  proceedings  for 
inaccurate or incomplete data over 156 asset declarations received.  In the Sarajevo Canton, 
office holders’ asset declarations are published on the cantonal anti-corruption office website. 
Other cantons should introduce similar measures.  

In  the  Sarajevo  Canton,  the  positive  trend  continued.  The  cantonal  Law  on  prevention  of 
corruption  entered  into  force  in  January  2023.  In  2022,  1 194  asset  declarations  were 
submitted  to  the  cantonal  anti-corruption  office  (1 380  in  2021)  and  47  office  holders  who 
failed to  submit declarations  were sanctioned with  misdemeanour fines, of which 16 orders 
were  appealed  in  court.  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.  

The Agency for Prevention of Corruption and Coordination of the Fight against Corruption 
(APIK) granted administrative protection to whistle-blowers in one case out of two requests 
in  2022,  compared  with  two  in  2021  In  the  Republika  Srpska  entity,  three  requests  for 
protection to whistle-blowers were filed in 2022 (zero in 2021, one in 2020), granted in one 
case with two cases ongoing. There is still no legislation on whistle-blower protection in the 
Federation entity. A new law on whistle-blower protection, entered into force in the Sarajevo 
Canton  in  January  2023.    In  the  first  quarter  of  2023,  the  cantonal  anti-corruption  office 
received six requests and granted protection in all six cases. In 2022, the Brčko District anti-
corruption office received four requests and granted protection in all four cases 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 in ensuring its independence, including in 
the  selection  of  its  management.  APIK  should  play  a  much  more  proactive  role  in 
implementing GRECO recommendations and aligning with international standards. The new 
parliamentary  commission  supervising  the  work  of  APIK  was  appointed  in  March  2023. 
APIK  must  exercise  its  legal  competence  as  the  main  coordination  body  for  corruption 
prevention and as the central point for anti-corruption activities in Bosnia and Herzegovina.  

The  independence  of  corruption  prevention  bodies  at  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 2022, the office processed 753 reports of corruption, most related 
to  corruption  in  employment,  of  which  531  were  sent  on  to  the  competent  authorities  for 
further  investigation  and  action  (919  and  83  in  2021,  respectively)  and  47  reports  were 
referred  to  the  Prosecutor’s  Office  of  the  Sarajevo  Canton.  In  two  cases,  the  Prosecutor’s 
Office filed an indictment. In 6 cases, there was a decision not to conduct or to suspend the 
investigation.  The  cantonal  anti-corruption  office  continued 
transparency 
standards, establishing in 2022 a register of vacancies in the public sector and an interactive 
map of building construction and forest cutting in the  Sarajevo Canton.  The anti-corruption 
office of Tuzla Canton started work in July 2022 with a director and two employees; it started 

increasing 

33 

 
 
collecting asset declarations of public officials, but has not yet made them public.  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. 
Canton 10 adopted a decree establishing an anti-corruption Office in October 2022. 

Bosnia  and  Herzegovina  needs  to  introduce  a  comprehensive  and  effective  system  for 
electronic  public  procurement  to  improve  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 

The criminal justice policy and the institutional and legislative frameworks across the country 
are largely ineffective and inadequate for the fight against corruption. This is in part due to 
insufficient law-enforcement capacity to investigate, and to penalties that do not sufficiently 
ensure deterrence. Deep legal fragmentation and frequent conflicts of jurisdiction leading to 
transfers of cases slow down proceedings and reduce efficiency. The police is not proactive 
in launching investigations and investigations are slow. In 2022, no law enforcement agency, 
including SIPA, submitted any report on high level corruption to the Prosecutor’s Office of 
Bosnia and Herzegovina. The highly formalistic manner in which SIPA is enforcing actions 
aimed  at  obtaining  evidence,  including  in  high-level  corruption  cases,  is  a  cause  of  serious 
concern. Systemic shortcomings in the operational cooperation of law-enforcement agencies 
and the 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 take place, including at state level. Pressure, interference and verbal 
attacks on judicial office holders, especially in high-level cases, continued without a systemic 
and efficient response by the HJPC and remain a major concern.  

In  the  reporting  period,  the  limited  cooperation  of  law-enforcement  agencies  with 
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  state  level,  to  cooperate  with  prosecutor’s  offices, 
notably  in  high-level  corruption  cases,  is  a  cause  of  serious  concern,  calling  into  question 
their  independence  and  professionalism.  Following  the  investigations  of  the  Prosecutor’s 
Office of Bosnia and Herzegovina, 15 employees of police and security agencies, including a 
judge  and  a  lawyer,  have  been  in  custody  and  are  being  prosecuted,  mainly  for  corrupt 
activities  and  aiding  organised  criminal  groups.  Diverging  views  regarding  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. The 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 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 
34 

 
 
been set up.  

After  very  poor  management  of  the  trial,  resulting  in  extensive  and  unjustified  delays,  in 
April  2023  the  Court  of  Bosnia  and  Herzegovina  reached  a  first-instance  sentence  in  the 
Novalić  et  al.  case  related  to  public  procurement  fraud,  finding  three  of  the  four  accused, 
including  the  then-acting  Prime  Minister  of  the  Federation  entity,  guilty  of  abuse  of  office 
and forging of documents, with sentences from 4 to 6 years.  

The  Prosecutor’s  Office  of  Bosnia  and  Herzegovina  initiated  two  additional  high-level 
corruption  investigations,  and  the  Sarajevo  Canton  Prosecutor’s  Office  initiated  one  related 
case.  In  May  2023,  the  former  mayor  of  Sarajevo  was  arrested  and  charged  with  criminal 
offences, including  abuse of office and counterfeiting official documents. 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.   

The  Prosecutor’s  Office  of  Bosnia  and  Herzegovina  made  good  progress  in  efficiently 
investigating SKY ECC related cases, establishing a team of 12 prosecutors to cover them.  It 
is  conducting  eight  investigations,  with  four  indictments  submitted  and  three  confirmed  by 
the  court.  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.   

With regard to transparency in the health sector, the Zenica Cantonal Hospital has been the 
first  health  care  institution  in  the  country  to  introduce  the  automatic  creation  and  public 
disclosure  of  patient  waiting  lists,  and  new  anti-corruption  internal  acts  in  the  segments  of 
public  procurement,  conflict  of  interest,  human  resources  management  and  financial 
management.  In  addition,  15  health  institutions  throughout  the  country  adopted  new 
rulebooks introducing anti-corruption internal acts in the areas of public procurement in the 
health sector, conflict of interest, human resources management and financial management. 

Legal framework 

The  lack  of  harmonisation  of  legislation  across  the  country  continued  to  hamper  the  fight 
against corruption. After a draft law on conflict of interest was rejected in Parliament in May 
2022, the Ministry of Justice of Bosnia and Herzegovina is yet to submit a draft state-level 
law on the prevention of conflict of interest in line with European standards to the Council of 
Ministers  for  adoption.  The  Federation  entity  Parliament  needs  to  adopt  legislation  on 
conflict of interest and on the effective protection of whistle-blowers that was adopted by the 
entity government in August 2022. In August 2022, the Sarajevo Canton adopted a Law on 
prevention,  suppression  and  the  fight  against  corruption.  This  is  another  step  towards 
establishing a comprehensive legal anti-corruption framework at cantonal level in the absence 
of  a  uniform  regulation  at  entity  level.  The  Brčko  District  needs  to  maintain  efforts  to 
implement effectively the law on the prevention of conflict of interest adopted in March 2021 
and  further  align  with  best  European  practices.  The  Republika  Srpska  entity  also  needs  to 
align  its  conflict  of  interest  legislation  with  international  standards.  Rules  on  conflicts  of 
interest are still not enforced in the Federation entity. 

Both  entities  are  implementing  the  strategies  adopted  in  2021  to  develop  internal  financial 
controls  in  the  public  sector.  Lack  of  transparency  seriously  hinders  the  fight  against 
corruption.  The  legislation  on  political  party  financing  urgently  needs  to  be  aligned  with 

35 

 
 
international standards, particularly with pending GRECO recommendations. In August 2023 
the Parliament adopted a Law on freedom of access to information to improve the pro-active 
disclosure of information and the transparency of state-level institutions; the independence of 
the appeal process remains to be ensured. 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, 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.  Barely  1  of  15  GRECO  recommendations  has  been  satisfactorily 
implemented  in  the  4th  evaluation  round.  The  authorities  need  to  ensure  appropriate 
legislative and institutional follow-up to fulfil the outstanding recommendations, notably on 
political party financing and conflict of interest.  

Strategic framework 

The  state-level  strategy  on  anti-corruption  expired  at  the  end  of  2019  and  the  Council  of 
Ministers  has  not  adopted  a  new  strategy  since,  further  hampering  a  harmonised  strategic 
approach across the country. This should be remedied as a priority. The Council of Ministers 
did  not  adopt  the  strategy  for  the  2022-2024  period,  which  had  been  drafted  as  an  interim 
solution  by the Agency  for Prevention of Corruption and Coordination of the  Fight against 
Corruption  (APIK)  and  instructed  APIK  to  draft  a  new  strategic  document  for  2024-2028. 
New  strategic  documents  need  be  adopted  and  harmonised  across  the  country,  and  their 
implementation should start without delay. Sufficient funding should be provided and strong 
monitoring mechanisms set up to ensure their implementation.  

Fundamental rights  

The legislative and institutional framework on fundamental rights is largely in place. Limited 
efforts  were  made  to  address  Opinion  key  priorities  5  and  9-13  on  fundamental  rights.  In 
August 2023 the Parliament amended the Law on the human rights Ombudsman, designating 
the institution as national preventive mechanism against torture and ill-treatment. There was 
backsliding in guaranteeing freedom of expression. The reintroduction of criminal penalties 
for defamation in the Republika Srpska entity in July 2023 severely impacts the environment 
for civil  society, restricting  freedom  of expression and of the media and represents  a major 
step  backwards  in  the  protection  of  fundamental  rights.  In  September  2023,  the  entity 
assembly adopted in first reading a draft law targeting civil society groups as foreign agents; 
if  fully  adopted,  would  mark  another  regrettable  and  undeniable  major  step  backwards. 
Freedom  of assembly  remains restricted in  large parts of the country.  The country needs  to 
urgently  finalise  the  pending  constitutional  and  electoral  reforms.  These  reforms  should  be 
advanced as an utmost priority. Significant reforms are needed to ensure that all citizens are 
able to effectively exercise their active and passive voting 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  insufficient  protection  of 
minorities,  including  the  Roma,  continue  to  cause  concern.  The  gender  action  plan  was 
adopted in October 2023. The action plan on women, peace and security needs to be finalised 
and  adopted.  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 have not been implemented and remain valid.                                                                                                                                               

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

36 

 
 
→  implement court rulings to end divided education; 
→  ensure  full  respect,  protection  and  promotion  of  freedom  of  assembly,  association  and 

expression, and refrain from further actions that adversely impact their exercise; 

→  harmonise  and  improve  legislation  against  domestic  and  gender-based  violence  to  meet 
international standards and align laws across the country to the Gender Equality Law to 
increase the public and political participation of women.  

Bosnia  and  Herzegovina  has  ratified  all  major  European  and  international  human  rights 
instruments,  most  of  which  are  included  in  its  Constitution.  No  significant  progress  was 
made  towards  addressing  most  of  the  204  accepted  recommendations  from  the  November 
2019 Universal  Periodic Review. Despite not  having  expressed interest  in seeking  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  nine 
judgments  that  Bosnia  and  Herzegovina  had  violated  rights  guaranteed  by  the  European 
Convention on Human Rights (ECHR) in six cases (10 in 2022). These violations concerned 
the  right  to  a  fair  trial,  the  protection  of  property,  and  the  general  prohibition  of 
discrimination.  In  the  reporting  period,  there  were  303  new  applications  allocated  to  a 
decision  body  of  the  ECtHR,  bringing  the  total  number  of  applications  pending  before  the 
Court  to  130.  There  are  five  cases  under  enhanced  supervision  by  the  Committee  of 
Ministers.  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.  The  August  2023  ECtHR 
ruling in the Kovačević case further extends the Sejdić-Finci case law to cover active voting 
rights  too.  Bosnia  and  Herzegovina  lodged  an  appeal  in  September  2023  to  the  European 
Court of Human Rights against the verdict in the Kovačević case. 

Bosnia and Herzegovina still lacks 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.  

The  tripartite  composition  and  consensual  decision-making  of  the  Ombudsman  institution 
needs to be revised in the mid-term to ensure its effective functioning. Its independence needs 
to be strengthened and it should continue its efforts to act more proactively. The Ombudsman 
registered  2 850  complaints  in  2022,  a  similar  number  to  previous  years,  and  issued  359 
recommendations,  of  which  only  129  were  fully  implemented.  The  follow-up  to  these 
recommendations  needs  to  be  prioritised  as  there  is  often  no  reaction  from  the  respondent 
authority.  The  Ombudsman  has  not  opened  any  minor  offence  proceedings  for  non-
compliance with its recommendations in the past 8 years, despite having the power to do so, 
nor has it initiated or intervened in administrative or judicial proceedings.  

As  regards  torture  and  ill-treatment,  Bosnia  and  Herzegovina  still  needs  to  ensure 
compliance  with  Article  17  of  the  Optional  Protocol  to  the  Convention  Against  Torture 
(OPCAT).  In  August  2023,  the  Parliament  amended  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 country needs to ensure the effective handling of reports of ill-
treatment.  So  far,  only  a  few  officers  have  been sanctioned.  Following  its  September  2021 
visit,  the  Council  of  Europe’s  Committee  for  the  Prevention  of  Torture  reported  numerous 
allegations of physical ill-treatment of detained persons by police officers and notes a lack of 

37 

 
 
effective  action  and  progress  in  addressing  previous  recommendations.  In  2022,  the 
Ombudsman made 10 visits to the places of detention and deprivation of liberty and issued 
one recommendation. 

No  progress  was  made  towards  adopting  a  state-level  framework  law  clearly  defining 
countrywide criteria on the rights of civilian victims of wartime torture to meet Bosnia and 
Herzegovina’s  pending  obligations  under  the  Convention  against  Torture.  Entity-level  laws 
on  victims  of  wartime  torture  needs  to  be  improved.  No  substantial  steps  were  taken  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,  including  by  providing  compensation  and  issuing  a  formal  apology  to  the  victim. 
The Republika Srpska entity government has not yet taken measures to waive court fees for 
victims  of  wartime  torture  to  which  statutes  of  limitations  were  applied  in  the  past:  as  a 
consequence, victims continue to  face  repossession of property for defaulting  on payments, 
which is worrying.  

The  continued  absence  of  a  countrywide  strategy  on  the  prison  system  and  the  lack  of 
progress  in  improving  detention  conditions  is  a  concern.  The  laws  need  to  be  harmonised 
across  the  country  and  brought  in  line  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 still 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 
detention  facilities  in  the  country  remain  in  need  of  infrastructural  improvement.  Prison 
regimes  also  require  modernisation.  The  Ombudsman  received  77  complaints  from  persons 
deprived of liberty in 2022 (91 in 2021).  

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 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. No indictments have been 
made since the entry into force of the law criminalising denial of genocide and glorification 
of  war  criminals,  imposed  by  the  former  High  Representative  Inzko  in  July  2021.  The 
criminal  designation  in  the  Republika  Srpska  legislation  for  describing  the  entity  or  its 
peoples  as  aggressor  or  as  genocidal  continues  to  have  a  chilling  effect  on  freedom  of 
expression in the entity. 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).  Positive  steps  were  taken  at  local  level.  The  Brčko  District 
unveiled  a  joint  memorial  for  all  civilian  war  victims  in  February  2023,  the  second  in  the 
country. In May 2023 the city of Mostar renamed six streets to remove references to officials 
from the Ustasha regime.  

The continued unresolved issue of missing persons is a matter of concern. 7 600 persons are 
still missing as of June 2023 as a result of the 1990s conflict, of which 111 were identified in 
2022,  and  44  more  in  the  first  half  of  2023.  However,  the  Missing  Persons  Institute  and 
Prosecutors’  Offices  at  all  levels  assisted  by  the  International  Commission  on  Missing 
Persons  are  making  steady  progress  in  identifying  the  remaining  7 600  missing  persons.  In 
2022,  the  authorities  conducted  109  exhumations  and  over  1  500  terrain  reconnaissance 
38 

 
 
operations.  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  forensic  capacity  at 
state level.  

No progress was made in aligning legislation with the EU acquis on data protection, notably 
the  General  Data  Protection  Regulation  (GDPR).  Protocol  223  to  the  Council  of  Europe 
Convention  on  the  automatic  processing  of  personal  data  was  ratified  in  August  2022.  No 
steps were taken to increase the independence and the human and financial resources of the 
Personal  Data  Protection  Agency.  The  Agency  needs  to  better  balance  the  protection  of 
privacy with  the general public interest,  notably media freedom,  electoral integrity, and the 
fight against corruption. The exceptions are being exploited by public institutions in order not 
to disclose documents. The Agency conducted 95 procedures ex officio in 2022 (84 in 2021). 
It  received  206  complaints,  conducted  75  inspections  and  issued  14  minor  offence  orders 
(respectively, 183, 79 and 9 in 2021). The administrative proceedings against decisions of the 
Agency pending before the Court of Bosnia and Herzegovina were 15 (19 in 2021). 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 but cases of 
discrimination,  hate  speech  and  hate  crimes  on  religious  grounds  continue  to  occur.  The 
Serbian  Orthodox  Church  left  the  Inter-Religious  Council  in  February  2023.  The  Islamic 
Community of Bosnia and Herzegovina still does not have an agreement (concordat) with the 
state.  Incidents  targeting  religious  sites  also  continue,  particularly  in  minority  and  returnee 
areas,  as  highlighted  by  incidents  involving  Bosniak  returnees  to  Višegrad  in  March  and 
April 2023, and Serb returnees to the Mostar area. The partisan memorial cemetery in Mostar 
suffered large-scale vandalism in June 2022 and again in May 2023. Bosnia and Herzegovina 
is  encouraged  to  promote  Holocaust  remembrance,  education  and  research,  in  cooperation 
with the local Jewish community, in order to fight against antisemitism.  

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

Freedom of expression  

There  is  some  level  of  preparation  on  freedom  of  expression.  There  was  backsliding  in 
addressing Opinion key priority 12 to guarantee freedom of expression and of the media and 
the  protection  of  journalists.  This  key  priority  requires  ensuring  the  appropriate  judicial 
follow-up  to  threats  and  violence  against  journalists,  including  cases  involving  women 
journalists  and  media  workers,  and  also  ensuring  the  financial  sustainability  of  the  public 
broadcasting  system.  Political  pressure,  intimidation  and  harassment  towards  journalists, 
including physical and verbal attacks, continued during the reporting period, and there was no 
appropriate  institutional  follow-up.  No  steps  were  taken  to  align  the  legislative  framework 
with  European  and  international  standards  or  to  fully  enforce  it.  Political  influence  over 
public broadcasters persists, and their financial sustainability remains in  question. The Law 
on the public broadcasting system remains unimplemented and entity-level legislation is still 
not harmonised with this law. The reintroduction of criminal penalties for defamation in the 
Republika  Srpska  entity,  adopted  by  law  in  July  2023,  severely  impacts  freedom  of 
expression  and  of  the  media  and  represents  a  major  step  backwards  in  the  protection  of 
fundamental  rights.  The  Sarajevo  Canton  government  endorsed  a  draft  law  that  would 
introduce  sanctions  for  online  ‘fake  news’;  if  adopted,  it  could  be  abused  to  restrict  online 
communications  and  intimidate  reporters.  Any  such  norms  must  fully  respect  freedom  of 
expression  standards.  Last  year’s  recommendations  were  not  implemented  and  thus  remain 

39 

 
 
valid.  

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

→  ensure the protection of  journalists and systematic institutional  follow-up  of 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 for public advertising.  

Intimidation of journalists  

There  continue  to  be  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 with no 
public  statements  on  these  issues,  and  institutional  follow-up  is  weak.  No  official 
countrywide  data  is  collected  on  threats  and  attacks  against  journalists  and  media  workers 
and their judicial follow-up. These statistics should also be disaggregated by sex. 

The  BH  Novinari  journalists’  association  recorded  73  cases  of  journalists’  rights  being 
violated  in  2022  (70  in  2021,  69  in  2020).  31  cases  of  attacks  (including  two  physical 
attacks), threats and intimidation of journalists were reported on the SafeJournalists platform, 
40% more than in 2021. In 2022, the Ombudsman received 12 complaints (9 in 2021, 11 in 
2019)  and  issued  one  recommendation,  which  was  not  implemented.  In  2022,  the  Online 
Media  and  Press  Council  received  101  complaints  about  hate  speech  against  journalists, 
compared  to  509  in  2021.  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  had  been  decriminalised  since  2002,  politicians  and  public  officials 
continue  to  use  civil  lawsuits  to  intimidate  journalists.  The  reintroduction  of  criminal 
penalties  for  defamation  in  the  Republika  Srpska  entity,  adopted  by  law  in  July  2023, 
severely  impacts  free  speech  and  freedom  of  expression  and  of  the  media.  To  prevent  an 
environment that forces journalists into self-censorship, courts should step up their efforts to 
ensure  expedient  processing  of  defamation  cases  and  consistency  of  case-law  on  damages 
awarded. Legislation on  free access  to  information and hate speech  remains fragmented.  In 
August 2023, the Parliament adopted a Law on freedom of access to information applying to 
the State-level institutions, intended to improve the pro-active disclosure of information and 
the transparency of state-level institutions. The independence of the appeal process still needs 
to be brought in line with international and European standards. 

Implementation of legislation/institutions  

The  Communications  Regulatory  Agency  (CRA)  still  lacks  full  political  and  financial 
independence.  The  procedure  to  appoint  its  management  does  not  guarantee  pluralistic 
representation of interested stakeholders and full independence from the regulated sector and 
from  political  influence.  It  must  be  amended  to  improve  the  public’s  perception  of  it  as  a 
neutral and independent body. The mandate of the CRA Board expired at the end of 2017; the 
Parliament has not appointed a new board for the whole 2018-2022 term. Legal provisions on 

40 

 
 
data  protection  and  access  to  information  are  still  interpreted  in  a  way  that  protects  private 
rather than public interests. 

Public service broadcaster  

The  state-level  public  service  broadcaster  Radiotelevizija  Bosne  i  Hercegovine  (BHRT) 
remains in serious danger of shutting down, following years of deprivation of stable funding 
as a result of the non-enforcement of the 2003 Law on the public broadcasting system and of 
lengthy  litigation  in  entity  courts  over  the  substantial  debts  of  Radio  Televizija  Republike 
Srpske (RTRS) to BHRT (over EUR 31.5 million). These issues pose a serious threat to the 
financial  independence  and  sustainability  of  the  public  broadcasting  system.  Bosnia  and 
Herzegovina  risks  become  the  only  country  in  Europe  without  a  state-level  public  service 
broadcaster. 

State  and  entity  public  broadcasters  remain  exposed  to  political  influence,  in  particular 
through  politically  controlled  steering  boards.  There  is  a  continued  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  on  the  steering  board  of  the  public 
broadcaster  FTV  nor  appointed  a  director  of  FTV  since  2013.  Republika  Srpska’s  RTRS 
public channel 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  the  broadcasting  of 
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  of 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  high  number  of  strategic  lawsuits  against  public 
participation  (SLAPP) further fuels  self-censorship.  Two such cases were reported in  2021, 
with extremely high compensation claims threatening the financial survival of the media.  

Internet  

Online  platforms  are  used  to  spread  hate  speech  and  disinformation,  as  self-regulation  of 
online  media  has  a  limited  effect.  However,  the  trend  is  declining.  The  Press  and  Online 
Media Council received 566 complaints in 2022 (1 073 in 2021), almost all related to online 
content. Criminal prosecution is limited to the incitement of religious and ethnic hatred on the 
internet  or  social  networks.  In  April  2023,  the  government  of  Sarajevo  Canton  endorsed  a 
draft  law  defining  the  internet  as  a  public  space  and  introducing  disproportionate  sanctions 
for  the  online  dissemination  of  undefined  ‘fake  news’;  if  adopted,  this  provision  could  be 
abused  to  restrict  online  communications  and  intimidate  reporters.  Any  such  norms  must 
fully respect freedom of expression standards. 

Professional organisations and working conditions  

Journalism in Bosnia and Herzegovina remains a precarious profession, with low wages and 
little  job  security.  Labour  rights  are  barely  respected,  unionisation  is  low,  and  there  are  no 
branch  collective  agreements  for  media  workers.  Consequently,  many  journalists  receive  a 

41 

 
 
salary significantly lower than average while also working overtime. Women journalists find 
themselves in a worse situation than men. The Press and Online Media Council’s media code 
remains the basis of self-regulation, but compliance is inconsistent.  

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. For 
instance, in June 2023 the entity broadcaster RTRS withdrew support to the National Theatre 
of Republika Srpska due to its cooperation with Sarajevo’s SARTR theatre. 

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

Laws on freedom of assembly are still not harmonised across the country and are not in line 
with European standards, in particular as regards 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  fourth  Sarajevo 
Pride march took place without incidents in June 2023. The exercise of freedom of assembly 
remains  restricted  in  the  Republika  Srpska  entity,  where  in  March  2023  the  local  police 
banned an LGBTIQ event.  

Freedom  of  association  continues  to  be  generally  respected.  However,  human  rights 
defenders  dealing  with  issues  perceived  as  sensitive  (e.g.  anti-corruption,  women’s  rights, 
LGBTIQ  persons’  rights,  migrants,  the  environment)  continue  to  be  subject  to  threats, 
harassment, verbal abuse and even physical attacks. The authorities have failed to promptly 
and  systematically  condemn  and  properly  investigate  such  attacks.  In  September  2023,  the 
Republika  Srpska  entity  adopted  in  first  reading a  legislative  initiative  on  a  special  registry 
and  transparency  of  work  of  non-profit  organisations,  which  would  impose  excessive  and 
unwarranted restrictions on civil society organisations and targeting them as ‘foreign agents’. 
If  fully  adopted,  this  draft  law  would  adversely  affect  civil  society,  including  in  engaging 
with stakeholders without fear of repercussions. This draft law should be abandoned, in line 
with  the  joint  opinion  of  ODIHR  and  Venice  Commission.  Additionally,  civil  society 
organisations  in  the  Herzegovina-Neretva  Canton  face  continuous  pressure  from  the 
authorities with repetitive and excessive inspections. 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.   

As regards property rights, the apportionment of property between the State and other levels 
of government remains one of the open issues under the ‘5+2’ agenda for the closure of the 
Office of the High Representative. This requires the adoption of a state-level law, in line with 
jurisprudence of the Constitutional Court. Entities and cantons have legislation which is not 
in  line  with  the  constitutional  and  legal  framework.  There  are  no  strategic  documents  that 
address this issue. No steps were taken to update and interconnect the entity-level cadastral 
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. There 
is  no  legislative  framework  on  restitution  claims,  which  are  handled  case  by  case.  The 
Federation  entity  needs  to  amend  its  legislation,  in  line  with  several  ECtHR  cases  on 
occupancy  rights  over  military  apartments,  which  are  still  pending  implementation  (Đokić, 
Mago, Alekšić cases). 

42 

 
 
Concerning  non-discrimination,  there  was  no  progress  towards  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  due  to  a  number  of  problems,  including  insufficient  use  of  available  legal 
remedies  such  as  collective  lawsuits,  divergent  court  practice,  excessive  length  of 
proceedings,  and  lack  of  a  unified  data  collection  system  on  discrimination  cases.  In  2022, 
the courts received 979 discrimination cases; 455 cases were completed.   

Discrimination  continues  to  be  under-reported,  particularly  at  the  workplace,  and  judicial 
practice has shown lack of uniform application of burden of proof, excessive length and non-
enforcement  of  final  decisions.  The  Ombudsman  registered  208  cases  of  discrimination  in 
2022 (173 in 2021, 288 in 2020), of which the most frequent concerned discrimination at the 
workplace,  ethnic  discrimination  and  discrimination  on  the  basis  of  social  position  and 
gender. The Ombudsman issued 75 recommendations for these cases in 2022, compared to 26 
in  2021.  Disputes  over  education  continue,  while  systemic  solutions  for  ensuring  inclusive 
and  non-discriminatory  education  are  not  in  place.  The  common  core  curriculum  is  not 
completed,  nor  is  it  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  2014  and  2021  rulings  by  the 
Federation entity Supreme Court concerning the Herzegovina-Neretva and the Central Bosnia 
Canton. Despite Constitutional Court decisions, the name of the Bosnian language is still not 
recognised in schools in the Republika Srpska entity, leading to recurrent school boycotts.  

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 make it difficult to establish intent, leading to 
few  indictments  and  convictions.  157  ethnic-related  hate  incidents  were  recorded  in  2022, 
and  six  convictions  were  handed  down  in  2022  (134  and  eight  in  2021,  119  and  three  in 
2020). 15 trials  are ongoing.  The case-law on hate crimes is  not  consistent.  The authorities 
have  not  taken  any  measures  to  counter  hate  speech,  which  remains  present  in  official 
discourse. There is no monitoring or enforcement of the prohibition of hate speech in online 
media. 56 reports were filed and eight rulings, of which six convictions, were handed down 
for hate speech in 2022, compared to 70 reports and eight convictions in 2021. The Council 
of  Europe  Convention  on  cybercrime  and  its  additional  protocol  is  only  partially 
implemented.  

Legislation  on  gender  equality  is  still  not  harmonised  across  the  country  or  effectively 
enforced. The new gender action plan was adopted in October 2023. The new action plan on 
women, peace and security needs to be finalised and adopted, so that activities may resume at 
full speed. An effective mechanism of monitoring and accountability systems, and sufficient 
funding from the budget for implementing the action plans remain priorities in this area.  

Despite  being  prescribed  by  law,  gender  impact  assessments  are  still  not  being  carried  out. 
While  Bosnia  and  Herzegovina  has  developed  a  partial  index  of  gender  equality,  work  on 
data  collection  needs  to  proceed  to  enable  the  development  of  sound  policies  targeting  key 
gender gaps, providing relevant data on gender-based violence. 

During the reporting period, a number of cases of gender-based violence leading up to the 
murder  of  women  (femicide)  garnered  public  attention  and  sparked  protests  across  several 
cities in Bosnia and Herzegovina. These incidents exposed existing systemic shortcomings of 
the institutional response to gender-based violence. Improvements are particularly needed on 

43 

 
 
issuing  and  enforcing  protective  measures,  continuous  and  comprehensive  victim  support, 
legal aid, and safe accommodation. The country needs to introduce urgent legislative changes 
to ensure the transposition of remaining obligations stemming from the Istanbul convention, 
including by amending its criminal legislation. The Federation entity still needs to harmonise 
its  criminal  code  with  the  Istanbul  Convention  by  opening  the  process  for  public 
consultations  and  involving  women’s  rights  organisations.  Furthermore,  it  needs  to  finish 
developing and adopt legislation on protection against domestic violence. The Brčko District 
should  allow  for  criminal  prosecution  of  offenders.  The  Republika  Srpska  entity  needs  to 
implement  legislation  in  this  field  and  recognise  the  role  of  specialised  civil  society 
organisations contributing to the protection of victims. Bosnia and Herzegovina still needs to 
address the August 2020 decision of the UN Committee on the Elimination of Discrimination 
against  Women  (CEDAW)  on  providing  all  forms  of  redress  to  victims  of  wartime  sexual 
violence.  It  further  needs  to  accelerate  the  prosecution  of  crimes  of  sexual  violence,  secure 
witness protection and provide reparation to women victims of war crimes.  The gender pay 
gap remains significant, at around 25%. Maternity, paternity and paternal leave continues to 
differ  among  entities  and  cantons.  (See  also  Chapters  19  and  28;  on  women  victims  of 
trafficking, see Chapter 24) 

As  regards  the  rights  of  the  child,  no  steps  were  taken  by  Bosnia  and  Herzegovina  to 
develop and adopt a new action plan on child protection to replace the one for 2015-2018. In 
2022,  the  Ombudsman  received  219  complaints  on  children’s  rights  (190  in  2021,  190  in 
2020).  There  were  1 103  children  without  parental  care  in  2020  (1 623  in  2019),  many  of 
whom  are  children  with  disabilities.  Transition  towards  community-based  care  needs  to 
accelerate. To ensure the best interest of the child and avoid institutionalisation, measures are 
required  to  prevent  family  separation,  provide  foster  care  and  alternative  solutions,  and 
support  children  leaving  care  institutions  at  the  age  of  18.  Child  exploitation  and  child 
begging remain a serious concern; no measures have been taken to address them despite the 
urgency. Violence against children continues to be under-reported. Some children are without 
compulsory health insurance, which needs to be addressed. Marginalised groups, such as the 
Roma, face multiple forms of discrimination; this affects girls and women in particular. The 
authorities  have  not  taken  any  measures  to  collect  precise  and  consistent  data  on  violence 
against  children  and  on  child  poverty.  Bosnia  and  Herzegovina  has  ratified  all  key 
international  instruments  on child labour. The minimum  age for work across  the country is 
15. However, this is not applied in practice with regard to children who are working without a 
formal  employment  relationship.  Child  begging  is  also  not  prohibited  as  a  hazardous 
occupation for children. Roma children are particularly vulnerable to the worst forms of child 
labour.  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  issue  of  registering  births  of 
children of undocumented migrants must be addressed.  

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  still  not  been  fully  implemented  or  harmonised 
with  each  other.  There  are  no  separate  units  for  juveniles  during  pre-trial  detention  and  in 
police stations, a serious breach of international law that urgently needs to be remedied. The 
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. As of July 2022, there were 29 minors in prisons (22 as of September 2021, 39 as of 
44 

 
 
December 2021).  

Persons  with  disabilities  are  among  the  most  vulnerable  groups.  No  steps  were  taken  to 
address  concerns  regarding  deprivation  of  legal  capacity,  status-based  discrimination,  and 
accessibility.  While  the  legal  and  institutional  framework  for  persons  with  disabilities  is  in 
place,  the  lack  of  dedicated  budgetary  funds  hampers  implementing  measures  that  would 
improve their position. 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  in  accessing  education,  healthcare  and 
social assistance. The Council for Persons with Disabilities needs to be further engaged in all 
relevant  processes.  The  authorities  also  need  to  improve  data  collection,  including  sex-
disaggregated data. 

Children with disabilities remain one of the most marginalised and excluded groups, facing 
stigma and discrimination along with inadequate services, especially in health and education. 
Many  continue  to  be  placed  in  residential  institutions,  which  is  a  severe  violation  of  their 
rights  and  international  conventions.  This  needs  to  be  urgently  addressed.  Bosnia  and 
Herzegovina  needs  to  urgently  develop  and  adopt  a  deinstitutionalisation  strategy  to  move 
towards community-based care. Both entities and the Brčko District have started developing 
their own roadmaps in cooperation with UNICEF.   

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  was  developed  in 
2020. Active and persistent engagement is needed to achieve its objectives. While legislation 
includes provision  on hate crimes on grounds of  sexual  orientation  and gender identity, the 
prosecution of hate crimes and hate speech against LGBTIQ persons remains insufficient. No 
steps  were  taken  to  recognise  and  ensure  the  enjoyment  of  same-sex  couples’  social  and 
economic  rights,  including  the  right  to  a  family  life.  The  social  inclusion  of  intersex  and 
transgender  persons,  who  continue  to  be  particularly  marginalised,  has  yet  to  improve.  In 
March 2023, the local police prohibited an LGBTIQ pride event in Banja Luka and did not 
protect  activists  from  physical  attacks,  nor  were  the  perpetrators  prosecuted.  Harmful 
comments  by  high-level  politicians  and  public  figures  against  the  LGBTIQ  community 
contributed to these developments. The fourth Sarajevo Pride march took place in June 2023.  
The Sarajevo Open Centre documented 13 hate incidents against LGBTIQ persons in 2022, 
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,  particularly  for  witnesses  and 
victims.  The  four  criminal  procedure  codes  have  yet  to  be  further  harmonised,  and  their 
enforcement is inconsistent. Bosnia and Herzegovina needs to ensure the right to immediate 
access to a lawyer while in police detention, which is an essential procedural right. A state-
level law to protect the right to be tried within a reasonable time was adopted and entered into 
force in June 2022; a similar law is still pending adoption in the Federation entity. This is key 
to  addressing  systemic  violations  of  the  right  to  a  fair  trial  and  ensuring  the  right  to  an 
effective  remedy,  in  line  with  Constitutional  Court  rulings  and  European  standards.  The 
country has not aligned with the EU acquis on victims’ rights and compensation to victims of 
crime, but has taken some steps through the provision of related services, in particular victim 
support  and  the  development  of  referral  mechanisms  for  long-term  physical,  psychological 
and practical assistance.  

45 

 
 
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 framework 
needs  to  be  completed  by  adopting  laws  in  the  Federation  entity  and  the  Central  Bosnia 
Canton, as well by as putting into operation the legal aid office of the Herzegovina-Neretva 
Canton. Conducting a needs assessment would help identify and address the main gaps and 
ensure effective equal access to justice for all, irrespective of place of residence. The budget 
implemented for legal aid in 2022 amounted to EUR 8 442 077 (up from EUR 7 073 171 in 
2021). 

The  participation  in  political  and  public  life  of  persons  belonging  to  national  minorities 
remains  low.  No  progress  was  made  towards  adopting  a  countrywide  strategy  on  national 
minorities.  The  authorities  still  need  to  comply  with  the  recommendations  of  the  fourth 
review cycle under the Framework Convention for the Protection of National Minorities from 
November 2017 to condemn statements of politicians and public figures inciting ethnic hatred 
and  to  take  measures  promoting  intercultural  dialogue  and  understanding.  The  national 
minorities’  councils  should  become  more  active  in  developing  practical,  political  and 
legislative initiatives. In 2022, the Ombudsman received 12 complaints concerning rights of 
persons belonging to minorities (compared to three in 2021 and two in 2020) and issued two 
recommendations.  Minorities  and  unaffiliated  citizens,  remain  barred  from  running  for  the 
Presidency and House of Peoples. This has been repeatedly condemned by the ECtHR since 
2009  (Sejdić-Finci  case  law).  Pending  constitutional  and  electoral  reforms  are  of  utmost 
importance to ensure equality for all.  

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  and  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 anti-
discrimination law. The country allocated EUR 700 000 for 2023 for the implementation of 
the  2021-2025  countrywide  action  plan  for  the  social  inclusion  of  Roma  men  and  women, 
compared to EUR 1 million for 2020, the last year a budget was allocated. As the action plan 
encompasses  a  broad  scope  of  measures,  it  requires  appropriate  funding  from  all  levels  of 
government, reversing the downward trend, as well as constant monitoring, including by the 
Roma Advisory Board (Roma Committee). A total of 15 local communities have revised their 
local Roma action plans. 

Upon  completion  of  the  mapping  and  assessment  of  the  needs  of  the  Roma  in  Bosnia  and 
Herzegovina  in  December  2022,  47  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 

46 

 
 
registration  and  for  access  to  healthcare  and  education,  and  to  recognise  documents  for 
children born abroad.  

Bosnia  and  Herzegovina  hosts  around  90 000  refugees  and  internally  displaced  persons, 
following  the  conflict  in  the  1990s,  of  which  990 families (3 351 persons) still  live  in one 
of  the  45  collective  centres  across  the  country  and  in  alternative  accommodation.  The 
authorities need to address their housing needs with sustainable solutions. Minority returnees 
are  among  the  most  common  targets  of  ethnically  driven  hate  speech  and  hate  crimes.  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  so  as  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  for  asylum  seekers  and  migrants. 
Arbitrary  limitations  to  their  human  rights,  including  restrictions  of  movement  introduced 
during the pandemic, should be removed.   

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. Some progress was made, notably on the fight against organised crime 
(Opinion key priority 7) by finally putting into operation the Europol  contact  point, and on 
managing  migration  and  asylum  (Opinion  key  priority  8)  by  adopting  a  new  2021-2025 
strategy  and  action  plan  on  migration  and  asylum.  The  Parliament  adopted  a  Law  on 
foreigners  in  September  2023.  Proactive  engagement  is  required  to  fully  take  over 
responsibility  for  managing  migration,  which  should  be  supported  by  all  levels  of 
government.  Bosnia  and  Herzegovina  is  satisfactorily  implementing  the  integrated  border 
management strategy for 2019-2023. The next strategy and the action plan for 2024-2029 are 
broadly  aligned  with  the  EU  acquis  and  need  to  be  adopted  in  good  time.  The  Council  of 
Ministers  adopted  a  new  four-year  strategy  and  the  related  action  plan  for  countering 
terrorism and preventing and countering violent extremism, and an updated risk assessment 
and  accompanying  action  plan  on  anti-money  laundering  and  combating  the  financing  of 
terrorism. Further steps are needed to adopt an action plan on drugs and to establish a drug 
observatory  and  an  early  warning  system.  While  broadly  aligned  with  the  EU  acquis, 
legislation  is  often  not  harmonised  across  the  country,  and  institutional  cooperation  and 
coordination remain weak, leading to uneven and unsatisfactory implementation. Last year’s 
recommendations remain broadly valid. 

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

→   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 the 
possibility of again being  listed as a jurisdiction under increased monitoring for strategic 
AML/CFT deficiencies  by the   Financial Action Task  Force (FATF) after evaluation  of 
the  regional  body,  the  Committee  of  Experts  on  the  Evaluation  of  Anti-Money 

47 

 
 
Laundering Measures and the Financing of Terrorism (MONEYVAL);  

→  draw up concrete plans for transition to increased responsibility of domestic authorities in 
managing  migration,  including  taking  over  the  management  of  reception  centres; 
implement  the  strategy  on  migration  and  adopt  the  action  plan;  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; align with EU visa policy, in 
particular with regard to third countries presenting irregular migration or security risks to 
the EU.   

Fight against organised crime 

Bosnia and Herzegovina is in between an early stage and some level of preparation in the 
fight against organised crime. Some progress was made on the fight against organised crime, 
notably by finally putting into operation the Europol contact point  and by concluding some 
relevant  operations  supported by Europol (Opinion key priority 7). The country has  several 
strategies  in  place,  notably  the  recently  adopted  strategy  on  organised  crime,  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 very limited exchange of intelligence.  Criminal organisations 
operating  in  Bosnia  and Herzegovina  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. Last year’s recommendations remain broadly valid. 

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

→  implement  the  national  strategy  on  trafficking  in  human  beings  and  improve  referral  to 

appropriate support to victims; 

→  strengthen 

institutional  cooperation  among 

law  enforcement  agencies  and  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;  
→  sign  an  agreement  on  operational  cooperation  with  Eurojust,  and  establish  a  firearms 
focal  point;  urgently  adopt  legislation  on  the  possession  of  weapons  by  civilians, 
harmonised  and  further  aligned  with  the  EU  acquis,  including  on  marking  and 
deactivation standards. 

Institutional set-up and legal alignment 

There  are  multiple  law  enforcement  agencies  in  the  country,  out  of  which  15  have 
investigative  powers.  The  police  had  438  police  officers  per  100 000  inhabitants  in  2021, 
compared  with  an  EU  average  of  335.3  (Eurostat,  2019-2021).  Data  for  2022  are  not 
available.  

Police  legislation  needs  to  be  further  aligned  with  the  EU  acquis.  There  was  limited 
improvement  and  harmonisation  of  police  legislation  at  all  levels,  which  hampers  effective 
integrity  and 
police  accountability, 

integrity  and  cooperation.  The  professionalism, 

48 

 
 
accountability  of  law  enforcement  agencies  needs  to  be  significantly  improved.  A 
comprehensive  policy  to  ensure  transparent  appointments  is  needed.  Police  oversight 
mechanisms  via  parliamentary  independent  boards  need  to  be  strengthened.  There  was 
progress in ensuring merit-based, standardised and transparent appointments and promotions 
by  some  independent  boards.  Political  interference  remains  a  concern,  notably  for  key 
managerial  positions  as  well  as  for  parliamentary  independent  board  members.  While  the 
participation of women in police bodies has improved, women are still under-represented in 
positions of command and have limited promotion opportunities. Failure to comply with the 
rule of law and democratic principles, including political influence, remain a major concern. 
In  the  Herzegovina-Neretva  Canton,  amendments  to  the  legislation  led  to  ethnic  criteria 
prevailing  over  merit  in  recruiting  police;  this  is  of  concern  for  its  independence  and 
professionalism.  

The legal framework on the fight against organised crime is only partially aligned with the 
EU acquis. Bosnia and Herzegovina adopted a strategy on the fight against organised crime 
for 2023-2026. All  competent authorities need to implement  the strategy through their own 
action plans. It is of particular concern that, since 2010, despite several legislative initiatives, 
Bosnia  and  Herzegovina  has  not  developed  capacity  for  asset  management  at  state  level. 
Extended  and  third-party  confiscations  are  possible,  but  they  are  rarely  used.  Bosnia  and 
Herzegovina  should  establish  or  designate  an  asset  recovery  office  in  charge  of  identifying 
and  tracing  criminal  assets  to  improve  effectiveness  and  facilitate  operational  cooperation 
with EU Member States.  

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. The 
implementation  of  the  strategy  should  be  evaluated  and  a  strategy  for  the  following  period 
should be developed. Bosnia and Herzegovina has intensified anti-trafficking operations but 
few victims and suspects have been identified.  It  should improve the early  identification of 
victims  and  their  referral  to  adequate  support,  assistance,    protection  services  and  possible 
compensation. 

Bosnia  and  Herzegovina  needs  to  further  align  its  legislation  on  cybercrime  with  the  EU 
acquis. It is party to the Budapest Convention on Cybercrime, and it should sign its second 
additional  protocol  on  enhanced  cooperation  and  disclosure  of  electronic  evidence.  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,  including  on  marking  and  deactivation  standards.  New 
legislation  should  be  modelled  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.  

Legislation  should  urgently  be  adopted  on  anti-money  laundering  and  countering  the 
financing  of  terrorism  (AML/CFT),  in  line  with  the  fourth  and  fifth  EU  directives  on 
AML/CFT. Bosnia and Herzegovina adopted an updated risk assessment and accompanying 
action plan on AML/CFT. If these necessary steps are not taken as a matter of urgency, there 
is a real possibility that Bosnia and Herzegovina will again be  listed as a jurisdiction under 
increased  monitoring  for  strategic  AML/CFT  shortcomings  by  the  international  standard-
setting body, the Financial Action Task Force (FATF), after evaluation by the regional body 
MONEYVAL. Moreover, Bosnia and Herzegovina should align its criminal legislation with 

49 

 
 
the latest acquis on combating money laundering.  

Bosnia and Herzegovina should demonstrate results in implementing the 2021-2024 strategy 
and  action  plan  for  the  control  of  small  arms  and  light  weapons  (SALW)  Bosnia  and 
Herzegovina is aligned with the actions  within the EU Action Plan on firearms trafficking, 
which  correspond  with  the  goals  of  the  Regional  Roadmap  to  better  control  SALW  in 
Western Balkans and progressed well on activities to improving firearms detection capacities 
and  destruction  of  firearms.  More  efforts  should  be  done  to  investigate  firearm-related 
crimes, in particular  establishing the firearms focal point, which is still at an impasse. 

Implementation and enforcement capacity 

In  2022,  there  were  39  investigations  into  organised  crime  with  336    suspects,  14 
indictments  with  58  accused,  20  convictions  with  92  convicted,  38  with  a  conditional 
sentence,  and  16  acquittals.  This  represents  a  drop  compared  with  2021  (735  suspects,  28, 
indictments with 190 accused and 22 sentences with 134 convicted). In 16 cases, plea bargain 
agreements  were  concluded  with  58  individuals  (90  in  2021).  There  were  138  orders  to 
conduct  investigations  against  166  individuals  for  cybercrime  including  for  online  child 
sexual  abuse  in  2022,  (181  investigations  against  198  individuals  in  2021),  with  54 
indictments against 65 individuals (45 and 41 in 2021). The number of convictions in 2022 is 
still  very  low,  with  48  convictions  for  58  individuals  (43  and  51  in  2021)  of  which  27 
convictions  for  35  individuals  resulted  in  suspended  sentences  (50%).  In  2022  extended 
confiscation was proposed in five cases (seven in 2021) and three first-instance decisions and 
no  second-instance  decisions  were  delivered  by  courts.  Confiscation  of  property  from  third 
parties was proposed in six cases (10 in 2021), and one first-instance court decision and no 
second-instance court decision were delivered.  

The capacity to effectively dismantle criminal organisations is seriously hampered by the lack 
of harmonised criminal legislation, which is exacerbated by the systemic lack of capacity and 
institutional  coordination.  While  there  is  some  progress  in  carrying  out  joint  operations 
tackling  serious  crimes,  there  is  still  limited  exchange  of  intelligence.  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. The country should also step up the fight against transnational organised 
crime networks. 

There is no overall policy for carrying out timely and systematic financial investigations  In 
2022,  the  State  Investigation  and  Protection  Agency  (SIPA)  carried  out  financial 
investigations in four cases and submitted six reports to the Prosecutor’s Office of Bosnia and 
Herzegovina. While there is no information on the follow-up by the prosecution, the number 
of  financial  investigations  remains  very  low.  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 2022, there were 89 investigations into money laundering (61 in 
2021) involving 145 individuals, 48 confirmed indictments against 66 suspects (respectively 
49  and  66  in  2021),  and  39  convictions  against  51  defendants  (respectively  55  and  70  in 
2021). In 50 cases, a criminal report was filed by police authorities. For money laundering as 
a stand-alone crime, in 2022 there were 49 investigations against 71 individuals (33 and 36 
respectively  in  2021),  34  confirmed  indictments  against  47  individuals,  54  convictions 
against  72  individuals  (41  and  42  respectively  in  2021),  out  of  which  only  six  individuals 
were sentenced to prison; additionally, there were 24 fines against 30 individuals. 

50 

 
 
The  Financial  Investigation  Unit  within  the  SIPA  needs  to  fulfil  its  responsibilities  more 
efficiently. In 2022, SIPA submitted 28 reports against 59 individuals (12 and 25 respectively 
in 2021) and nine legal  entities to the prosecutors’ offices on suspicion of financial crimes, 
including  money  laundering,  in  the  amount  of  EUR 18 million  (5.5  in  2021).  For  money 
laundering as a stand-alone crime, in 2022 there were 49 investigations against 71 individuals 
(33  and  36  respectively  in  2021),  34  confirmed  indictments  against  47  individuals,  and  54 
convictions  against  72  individuals  (41  and  42  respectively  in  2021),  out  of  which  only  six 
individuals were sentenced to prison.  

The tools for freezing, managing and confiscating criminal assets are not effective enough. 
Confiscation of criminal assets needs to be stepped up 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  2022  amounted  to  over  EUR 9 million  compared  with  EUR 4 million  in  2021  and  over 
EUR 11.5 million in 2020.  

Proactive investigations that start with intelligence-led policing remain rare. The insufficient 
systematic  cooperation  between  law  enforcement  agencies  continues  to  seriously  affect  the 
quality  of  investigations  despite  some  successful  operations  carried  out  in  2022  and  2023. 
Criminal justice needs standardised systems and processes to respond swiftly to serious and 
organised crime, corruption and new security threats. Operational cooperation with Europol 
is growing, with some room for improvement. Cooperation with Interpol needs to improve.  

The  tools  for  enhanced  and  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  continues  to  hinder  trials.  The  quality  of  reports,  the 
collection,  analysis  and  sharing  of  data,  and  the  capacity  of  specialised  joint  investigation 
improved.  Continuous  efforts  should  be  undertaken  on 
teams  should  be  further 
communication, coordination and sharing of information to further strengthen the operational 
and strategic effectiveness of police bodies.  

The electronic data exchange system  from  the records of police authorities and prosecution 
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 needs to improve. Suitable equipment and sufficient staff are also needed.   

There  has  finally  been  progress  in  implementing  the  2017  agreement  on  operational  and 
strategic  cooperation  with  Europol.  In  June  2023,  the  contact  point  was  put  into  operation 
and a liaison officer was deployed in July 2023 by Bosnia and Herzegovina to Europol in the 
Hague. This is an important step. Until then, exchange of information with Europol continued 
to  take place  through  a  unit in  the Directorate  for Coordination of Police Bodies of Bosnia 
and Herzegovina, whose mandate had expired, and with  which the  Republika Srpska entity 
had  suspended  operational  cooperation.  Making  the  Europol  contact  point  fully  operational 
enabled the resumption of direct cooperation between Europol and all police bodies in Bosnia 
and Herzegovina, allowing the latter to make use of Europol’s services and operational tools. 

51 

 
 
Messages  were  exchanged  through  the  Secure  Information  Exchange  Network  Application 
(SIENA)  system.  The  roll-out  of  SIENA  across  the  country  should  continue.  In  2022,  the 
number of new cases opened based on cooperation with Europol was 1 165 (1 022 cases in 
2021). Messages exchanged through the Europol channel in 2022 amounted to 8 573 (4 721 
received and 3 852 sent). Bosnia and Herzegovina’s use of Europol products and services has 
been  very  limited  during  the  reporting  period,  but  is  expected  to  grow  with  the  start  of 
operation of the Europol contact point.  

Bosnia  and  Herzegovina  participates  in  the  European  Multidisciplinary  Platform  against 
Criminal  Threats  (EMPACT).  In  2023,  the  country  committed  to  participating  in  12 
operational  actions  (eight  in  2022).  Bosnia  and  Herzegovina  also  appointed  the  Europol 
contact  point  coordinator  as  national  EMPACT  coordinator.  Bosnia  and  Herzegovina 
continued to participate in EMPACT joint action days.  

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. The 
prosecutors and the police lack sufficient  and trained staff to efficiently address  trafficking. 
The  establishment  of  a  specialised  department  in  the  Prosecutor’s  Office  of  Bosnia  and 
Herzegovina dedicated to trafficking has further improved the referral mechanism and quality 
of  evidentiary  and  court  processes.  In  2022,  38  potential  victims  of  trafficking  in  human 
beings (56 in 2021) were detected (29 children and nine adults, compared with 49 and seven 
in  2021).  Nine  perpetrators  were  convicted  in  2022  (26  in  2021),  following  eight 
investigations involving 11 suspects (50 and 60 respectively in 2021).  

Bosnia  and  Herzegovina  still  has  no  fully  functional  referral  mechanism  for  trafficking 
victims. The task force against trafficking, established by the Council of Ministers, continued 
to  ensure coordination, including  with  the  regional  monitoring teams  at  entity  and cantonal 
level.  The  authorities  should  better  detect  and  identify  victims  and  perpetrators  by 
standardising and improving evidentiary proceedings and further training practitioners in the 
judiciary  and  police.  Despite  efforts  on  increased  property  and  damage  compensations, 
Bosnia  and  Herzegovina  still  needs  to  introduce  an  appropriate  compensation  scheme  for 
victims of crime, in particular of trafficking. The authorities should more systematically order 
financial investigations in  connection with  cases  of trafficking in  human beings  and further 
improve  international  cooperation,  notably  through  more  intensive  information  exchange, 
participation in joint investigation teams and enhanced cooperation with EU task forces and 
agencies, including Europol. 

Witness protection continued to improve, notably out-of-process protection. Specialised and 
regular training in EU and international practice and standards remains essential.  

The  authorities’  capacity  to  effectively  tackle  cybercrime,  including  online  child  sexual 
abuse, and respond to cybersecurity threats should be enhanced. Law enforcement authorities 
make efforts to strengthen cooperation in the fight against sexual abuse of children through 
participation  in  the  EMPACT  activity  on  cybercrime  child  sexual  abuse  and  exploitation, 
focused on the Western Balkans .  

On arms control, a total of 1 234 weapons, 49 889 pieces of ammunition, 31 pieces of other 
mine-explosive devices and 10.8 kg of explosives were seized in 2022 (against 1 396, 14 009 
and one in 2021). 2 609 pieces of weapons and weapons parts were destroyed (compared to 
1 792  in  2021,  1 864  in  2020  and  3 479  in  2019).  In  2022,  there  were  236  orders  to 

52 

 
 
investigate firearms related criminal offences – illegal production, possession, and trafficking 
-  (317  in  2021)  involving  273  suspects  (340  in  2021).  208  indictments  were  filed  in  2022 
against 233 accused (respectively 276 and 298 in 2021), leading to 217 convictions (223 in 
2021), 35 prison sentences (23 in 2021), 22 fines (32 in 2021) and 160 suspended sentences 
(168  in  2021)  with  235  convicted  (239  in  2021).  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. The SEESAC12 armed violence reporting platform recorded 
506 incidents (567 in 2021) related to firearms in 2022. 

Since  2021,  Bosnia  and  Herzegovina  needs  to  revise  the  working  arrangement  for 
cooperation    with  the  EU  Agency  for  Law  Enforcement  Training  (CEPOL).  The    contact 
point  was  replaced  in  October  2022,  but  not  much  interaction  has  taken  place  ever  since. 
Bosnia and Herzegovina has full access to the CEPOL exchange programme as well as to the 
free-of-charge  electronic  learning  system  of  CEPOL.  CEPOL  has  recommended  designing, 
preparing and organising targeted training to address firearms trafficking and environmental 
crime as priority topics. 

Cooperation in the field of drugs  

Institutional set-up and legal alignment 

Bosnia  and  Herzegovina  has  a  2018-2023  strategy  on  supervision  of  narcotic  drugs, 
prevention  and  suppression  of  the  abuse  of  narcotic  drugs,  but  there  is  no  action  plan  to 
implement it. The strategy needs to be implemented and its implementation be evaluated. An 
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 that is outdated. The 
entities need to adopt action plans aligned with the state-level strategy. The Commission for 
the suppression of the abuse of narcotic drugs was completely ineffective: it was inaugurated 
in July 2022 and its mandate expired in October 2022.   

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. It 
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.   

There  is  no  early  warning  system  on  new  psychoactive  substances  (NPS).  The  Ministry  of 
Security  facilitates  the  exchange  of  information  on  NPS;  entity  coordinators  should  be 
appointed.  

Implementation and enforcement capacity 

12 South Eastern and Eastern Europe Clearinghouse for the Control of Small Arms and Light Weapons. 

53 

 
 
 
Track  record  of  enforcement  continued  to  be  built  in  2022.  In  2022,  there  were  a  total  of 
3 166 (2 451 in 2021) reported crimes related to drug abuse and 2 033 (2 171 in 2021) orders 
issued to conduct an investigation. There were 1 337 indictments filed (1 409 in 2021), 1 804 
confirmed  (2  023  in  2021),  468  indictments  with  a  criminal  warrant  (587  in  2021)  and  7 
indictments  with  plea  agreement  (6  in  2021).  There  were  32  acquittals  (33  in  2021),  5 
judgments rejecting charges (6 in 2021) and 1 678  convictions (1 967 in 2021), of which 1 
conviction without a sanction (none in 2021); 86 fines (89 in 2021); 28 court reprimands (24 
in 2021); 1 034 suspended sentences (1 304 in 2021); and 517 prison sentences (550 in 2021 

Bosnia and Herzegovina remains  a transit  country and a final  destination for drugs.  Bosnia 
and Herzegovina 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  July  2022  the  Council  of  Ministers 
extended  the  mandate  of  the  Commission  for  the  destruction  of  drugs.  No  drugs  were 
destroyed in 2022. The lack of secure storage of drugs 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  with  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.    

A  new  4-year  strategy  for  countering  terrorism  and  preventing  and  countering  violent 
extremism  was  adopted  in  November  2022  after  a  2-year  gap.  This  marks  a  step  forward. 
Now,  the  authorities  need  to  implement  the  strategy,  including  by  addressing  all  forms  of 
radicalisation and violent extremism (political, ethno-nationalist and religious). A 2021-2026 
action plan was adopted in August 2023.  

Policy dialogue on counter-terrorism with  the EU takes place  regularly.  In April 2023, the 
country  submitted  the  5th  report  on  the  implementation  of  the  bilateral  arrangement  in  the 
framework  of  the  Joint  Action  Plan  on  Counter  Terrorism.  Some  progress  was  made,  but 
many objectives still need to be implemented. 

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  160  citizens  of  Bosnia  and  Herzegovina,  including  women  and  children,  are 
estimated  to  remain  in  Syria  and  Iraq.  In  August  2022,  Bosnia  and  Herzegovina  adopted  a 
plan for the repatriation, reintegration, rehabilitation and resocialisation of its citizens in Syria 
and  Iraq.  In  December  2022,  the  Presidency  instructed  competent  institutions  to  coordinate 

54 

 
 
the safe return of citizens of Bosnia and Herzegovina located in the conflict zone of Syria and 
Iraq. None were repatriated in the reporting period. 

In  2022,  10  investigations  were  initiated  for  terrorism-related  offences;  no  final  conviction 
was delivered. Authorities should improve preparations for the release of terrorist offenders 
who have served their sentences, in coordination with local authorities and law enforcement 
agencies.  

The capacity and effectiveness of the counter-terrorism task force and the counter-terrorism 
section of the state-level Prosecution Office need to be significantly strengthened. Bosnia and 
Herzegovina’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  at 
Europol to deal with terrorist content online. The entry into operation of the Europol contact 
point should facilitate cooperation and exchange information on terrorism as well.  

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 as part of integrative internal security governance. 

Judicial cooperation in civil and criminal matters  

The legislative framework for mutual legal assistance in civil and criminal matters is in place 
but  is  not  always  applied  effectively.  The  number  of  requests  for  judicial  cooperation  in 
criminal  matters  increased,  while  the  number  of  requests  for  judicial  cooperation  in  civil 
matters  dropped.  In  2022,  the  Ministry  of  Justice  recorded  a  total  of  2 891  requests  for 
judicial  cooperation  in  civil  matters,  70%  of  them  from  EU  Member  States  (primarily 
Austria,  Croatia,  Germany  and  Slovenia).  In  2022  there  were  3 920  requests  for  judicial 
cooperation  in  criminal  matters,  70%  from  EU  Member  States  (primarily  Austria,  Croatia, 
Germany  and  Slovenia).  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  71  requests  in  2022  (71  in  2021),  of  which  seven  were 
granted  and  four  rejected.  70%  of  these  requests  originated  from  EU  Member  States. 
Completion averaged between 3 months and 1 year.  

Bosnia and Herzegovina needs to undertake concrete action to accede to certain instruments 
developed  under  the  Hague  conference  on  private  international  law,  including  the  1996 
Hague convention on child abduction and the 2007 Hague maintenance protocol.  

Bosnia  and  Herzegovina  has  decided  to  open  negotiations  with  the  Commission  for  an 
international agreement on judicial cooperation in criminal matters with  Eurojust. The draft 
agreement has been sent and the first round of negotiations is scheduled for October 2023. An 
accelerated  approach  to  finalising  a  cooperation  agreement  is  to  be  encouraged.  As  a 
prerequisite for the agreement to enter into force, Bosnia and Herzegovina needs to adopt a 
new  Law  on  personal  data  protection  in  line  with  the  EU  acquis  and  ensure  the  full 
operational  capacity  of  the  Personal  Data  Protection  Agency.  Bosnia  and  Herzegovina  has 
three  contact  points  for  relations  with  Eurojust  and  Eurojust-led  projects.  In  2022,  it  was 
involved in 11 cases supported by Eurojust.  

In June 2023, the Presidency endorsed opening negotiations with the European Commission 
for  an  international  agreement  on  cooperation  with  Eurojust  and  gave  its  consent  to  the 
55 

 
 
Prosecutor’s  Office  of  Bosnia  and  Herzegovina  to  sign  a  working  arrangement  with  the 
European Public Prosecutor’s Office (EPPO). The country was involved in two EPPO cases 
in 2022.  

Legal and irregular migration  

Institutional set-up and legal alignment 

Some  positive  steps  have  been  taken  in  this  area.  The  legal  framework  on  migration, 
including the Law on foreigners, is broadly aligned with the EU acquis. In August 2023, the 
Parliament adopted a new Law on foreigners. The principle of non-refoulement is ensured in 
the  new  law.  Human  rights  safeguards  should  be  sufficiently  defined  and  guaranteed, 
including for minors and unaccompanied minors. The Council of Ministers adopted the new 
2021-2025 strategy on migration and asylum in December 2022, and the related action plan 
in March 2023.  

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 
implemented.  Bosnia  and  Herzegovina  has  also  concluded  readmission 
effectively 
agreements with all the Western Balkan partners, Türkiye, Russia, Moldova and Pakistan, as 
well  as  implementation  protocols  with  16  EU  Member  States.  Their  implementation  is 
satisfactory overall13. The readmission agreement with Pakistan has been in force since July 
2021.  

Bosnia and Herzegovina participates in the regional Anti-Smuggling Operational Partnership 
with  the  Western  Balkans  launched  in  November  2022  to  support  law  enforcement  and 
judicial cooperation against criminal smuggling networks and to increase border management 
capacities.  

Implementation and enforcement capacity 

In  2022,  the  numbers  of  persons  irregularly  entering  Bosnia  and  Herzegovina  considerably 
increased compared with the previous year. In 2022, the authorities detected 27 429  arrivals 
(15 740 in 2021). 25 709 persons expressed their intention to seek asylum (14 688 in 2021). 
The  top  three  declared  countries  of  origin  were  Afghanistan,  Burundi  and  Bangladesh.  In 
2022,  a  total  of  48 051  migrants  were  registered  staying  in  the  five  EU-funded  temporary 
reception  centres  in  the  Una-Sana  and  Sarajevo  cantons,  and  none  estimated  as  staying 
outside the centres. In 2022, Bosnia and Herzegovina had capacity to host over 4 500 persons 
at  any  time,  which  is  sufficient  for  the  needs.  The  number  of  migrants  accommodated  in 
reception  centres was the highest in October 2022 (3 300) and the lowest in February 2023 
(below  700).  The  average  stay  of  migrants  in  Bosnia  and  Herzegovina  has  dropped 
considerably to 7 days in May 2023, compared with 58 days in May 2022 and 103 in May 
2021.  

The Ministry of Security has continued to step up efforts to improve migration management 
and coordination between the State and local authorities. Despite constant EU advocacy and 
support,  responsibility  for  hosting  asylum  seekers  and  migrants  across  the  entire  country  is 

13  To  note  that  the  Commission  recommended  Bosnia  and  Herzegovina  in  its  sixth  report  under  the  Visa 
Suspension  Mechanism  to  resolve  in  particular  issues  in  readmission  cooperation  reported  by  2  Member 
States. 

56 

 
 
 
not  fairly  shared.  Most  of  the  responsibilities  continue  to  fall  upon  the  Una-Sana  and 
Sarajevo cantons. The Ministry of Security has continued efforts to take over responsibility 
for managing migration, which should be supported by all levels of government. The lack of 
political responsibility make it difficult for the authorities to provide the necessary assistance. 
The plan to progressively transfer management of reception centres to the authorities started 
in  November  2021  with  the  direct  management  of  the  multi-purpose  reception  and 
identification centre in Lipa. The drawing up of a detailed transition plan on the transfer of 
responsibilities  from  international  partners  to  the  state  has  been  delayed.  The  Ministry  of 
Security  continues  efforts  to  boost  regional  and  international  cooperation  on  migration, 
hosting conferences for this purpose in September 2022 and June 2023. 

The Sector for Immigration, the service for Foreigners’ Affairs and the Border Police remain 
significantly understaffed and partly underequipped, which hampers their efficiency. Bosnia 
and Herzegovina needs to adopt or assign a budget for migration management. Only limited 
public funding is available to manage migration; this also impacts the state’s effectiveness in 
developing a policy. More efficient information exchange is needed, including biometric data 
exchange between relevant stakeholders in migration management policy.   

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 
determined their legal  status  and the rights  they would enjoy  when entering the country. In 
2022, 49 974 Ukrainian  nationals  entered  and 48 051 exited Bosnia and Herzegovina. Very 
few stayed until the end of 2022. 

The multi-purpose reception and identification centre in Lipa, near Bihać, established with 
EU support in 2021, is operational. Bosnia and Herzegovina needs to strengthen capacity and 
to manage the centre effectively, 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  demonstrated  satisfactory 
management and coordination capacity. As additional reception places became available, the 
authorities  intensified  efforts  to  relocate  migrants  from  informal  settlements  to  these 
reception centres, with good coordination between the Service for Foreigners’ Affairs, local 
police  and  other  partners.  The  Una-Sana  Canton  maintains  in  place  discriminatory  and 
disproportionate restrictions of movement, including for migrants to use public transports as 
well  as  a  restriction  on  the  maximum  number  of  migrants  in  the  canton.  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. The authorities should step up efforts to protect the 
human rights of vulnerable persons, especially minors. The most vulnerable persons 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.  However,  there  are  no 
accommodation facilities available to minors outside of the cities where reception centres are 
located. Assigning legal guardianship and access to education for all unaccompanied minors 
in  Bosnia  and  Herzegovina  remains  a  challenge.  In  2022  the  authorities  registered  2 443 
unaccompanied minors in the country (109 in 2021 and 351 in 2020; the increase is due to the 
upgrading  of  the  Information  System  for  Migration  which  previously  only  gave  data  for 
unaccompanied minors registered in government-run centres). 

On  voluntary  and  forced  return,  the  return  of  persons  not  in  need  of  international 

57 

 
 
protection  needs  to  be  improved  in  terms  of  both  legal  framework  and  implementation 
procedures, also as it is mostly based on donors’ assistance. There was an improvement in the 
mechanisms  for collecting, sharing and analysing  statistics on migration in  the information 
system  for  migration.  However,  biometric  data  collection  requires  further  improvements. 
Cooperation with neighbouring countries is necessary to ensure the efficient management of 
the external borders, respecting fundamental rights and international obligations.  

Cooperation  on  identification  and  return  procedures  needs  to  improve.  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. In 2022, 103 foreigners were returned 
to neighbouring countries following readmission agreements (77 to Serbia, 26 to Montenegro 
and  none  to  Croatia),  compared  with  89  in  2021.  The  number  of  third-country  nationals 
returned to Bosnia and Herzegovina in 2022 under various readmission agreements amounted 
to 838, compared with 570 in 2021 and 686 in 2020. In 2022, 128 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 206 in 2021 and 232 in 2020. 
In  2022,  seven  minors,  potential  victims  of  trafficking  of  human  beings,  were  repatriated 
from  Bosnia  and  Herzegovina  in  line  with  their  expressed  wish  and  following  the  required 
security  and  humanitarian  risk  assessment.  In  2022,  Bosnia  and  Herzegovina  carried  out 
seven  forced  returns.  Carrying  out  non-voluntary  returns  remains  a  challenge  due  to  the 
absence  of  cooperation  frameworks  with  countries  of  origin,  the  lack  of  documentation  to 
establish  the  identity  of  migrants  and  the  lack  of  diplomatic  representation  of  various 
countries of origin in Bosnia and Herzegovina. A number of positive steps have been taken in 
this  regard,  including  the  operationalisation  of  the  readmission  agreement  with  Pakistan 
leading  to  the  first  returns  under  this  agreement,  identification  missions  from  Bangladesh 
resulting  in  the  issuance  of  travel  documents,  and  planned  returns  and  enhanced  dialogue 
with the Moroccan authorities. 

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. In 
2022,  the  immigration  centre  held  a  total  of  714  persons,  including  16  children. 
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. A detention facility was 
also  built  adjacent  to  the  Lipa  centre,  in  line  with  domestic  legislation  and  international 
standards.  

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  and  practices.  The  Law  on  asylum  adopted  in  January  2016 
should be further aligned with recent EU acquis, notably in relation to procedural safeguards 
to ensure standardised procedures for examining applications for international protection and 
systematic  access  to  procedural  guarantees,  as  well  as  on  strengthening  the  asylum  and 
reception  systems  in  line  with  the  Common  European  Asylum  System  (CEAS)  and  EU 
standards.  Cooperation  with  the  EU  Agency  for  Asylum  (EUAA)  should  continue  to  be 
further strengthened, including by adopting a 2024-2025 roadmap. Inter-agency cooperation 
and coordination needs to be further improved, particularly in the exchange of biometric data.  

Implementation and enforcement capacity 

58 

 
 
The  Sector  for  Asylum  of  the  Ministry  of  Security  has  very  limited  human  resources  and 
operational  capacity,  with  75%  of  its  posts  filled  (21  out  of  28)  and  only  five  officers 
registering and assessing asylum claims for the entire country, which is clearly insufficient to 
ensure access to asylum. The lack of staff significantly hampers access to asylum, primarily 
registration and identification. There are insufficient interviewers and registration sites.  The 
Sector for Asylum remains  dependent on external support, including by the EU, to  conduct 
registrations  and  examinations.  No  performance  targets  have  been  set  for  registration  and 
examination officers. More staff, including interpreters and cultural mediators, are needed so 
as not to only rely on international support. The age assessment procedures for minors require 
further  improvements.  The  overall  capacity  of  the  Sector  for  Asylum  should  be  further 
strengthened.  Cooperation  and  sharing  of  responsibilities  in  managing  asylum  with  other 
institutions should improve.  

Bosnia and Herzegovina should swiftly adopt the second-generation roadmap for cooperation 
with EUAA 2023-2025. The previous roadmap 2020-2022 was implemented only to a limited 
extent.  Bosnia  and  Herzegovina  is  strongly  encouraged  to  implement  the  pending 
recommendations,  especially  on  the  information  of  the  country  of  origin,  assessment  of 
evidence  and interview techniques for minors. The contact officers handling minors require 
appropriate trainings and resources, notably supporting guidance and technical solutions for 
more efficient family tracing processes. 

There  are  still  obstacles  to  ensuring  effective  access  to  asylum  procedures.  Inter-agency 
cooperation  and  coordination  needs  to  be  ensured.  The  processing  time  of  asylum  requests 
improved  in  2022  with  an  average  time  to  reach  a  decision  of  247  days  during  the  second 
semester  (350  days  during  the  first  semester),  reduced  to  205  days  in  the  first  semester  of 
2023, according to UNHCR. However, the processing of asylum cases remains too lengthy. 
The  Service  for  Foreigners’  Affairs  and  the  Border  Police  do  not  have  enough  staff  or 
facilities  to  register  asylum  claims  made  upon  entry  in  Bosnia  and  Herzegovina.  This  has 
been  an  issue  since  2018.  Access  to  asylum  procedures  and  mechanisms  should  be 
strengthened to ensure faster processing of their claims and to ensure that people in need of 
international protection receive it. 

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.  As  the  authorities 
have  not  yet  fully  taken  over  legal  responsibility  for  all  reception  centres  in  the  Una-Sana 
Canton,  these  centres  are  not  recognised  as  valid  residential  addresses  for  asylum 
applications;  applicants  are  thus  in  a  legal  limbo,  which  increases  their  vulnerability.    The 
system  for  collecting  and  storing  biometric  identifiers  requires  additional  improvements, 
especially for inter-agency information exchange. Access to information for potential asylum 
seekers  has  improved  through  more  intensive  facilitation  efforts  and  cooperation  with 
international partners. Authorities are encouraged to improve contingency planning capacity 
on reception procedures. 

In 2022, out of 25 709  persons who expressed their intention to claim asylum in Bosnia and 
Herzegovina, only 149 applied for international protection. 41 asylum requests were pending 
from  2022. Of them, none were granted refugee status,  46 persons were granted subsidiary 
protection, 25 individual applications were rejected on merit, and 22 asylum applications of 
27  persons  were  closed  as  the  applicants  left  or  attempted  to  leave  the  country  or  failed  to 
show  up  for  an  interview.  In  the  first  six  months  of  2023,  61  persons  filed  an  asylum 
application in Bosnia and Herzegovina, with 36 requests completed, compared to 90 and 12 
respectively in the same period the previous year. 

59 

 
 
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  remains 
underutilised, primarily due to its remote location. As of June 2023, the centre did not host 
any  asylum  seekers.  Living  conditions  and  the  provision  of  services  at  the  centre  have 
improved, such as possibility for daily educational activities for both adults and minors. 

Cooperation with EUAA should continue and intensify.  

Visa policy  

Bosnia and Herzegovina continues to meet the visa liberalisation criteria and retains a visa-
free  regime  with  the  EU.  The  Commission’s  sixth  report  under  the  visa  suspension 
mechanism  of  October  2023  concluded  that  Bosnia  and  Herzegovina  continues  to  meet  the 
visa  liberalisation  benchmarks14.  To  ensure  a  well-managed  migration  and  security 
environment,  Bosnia  and  Herzegovina  needs  to  be  fully  aligned  with  the  EU’s  visa  policy. 
Bosnia  and  Herzegovina  still  has  visa-free  agreements  with  the  following  countries  whose 
citizens require visas for the EU:  Azerbaijan, Bahrain, China, Kuwait, Oman, Qatar, Russia, 
Saudi Arabia and Türkiye. While it introduced a visa-free regime with Saudi Arabia for the 
summer  tourist  season  2023,  Bosnia  and  Herzegovina  terminated  the  visa-free  arrangement 
with  Bahrain  from  September  2023.    Bosnia  and  Herzegovina  maintains  a  policy  of  not 
issuing visas on the state border; exceptions are few (7 cases in 2021 and 27 in 2022). Bosnia 
and  Herzegovina  must  improve  its  technical  capacity  and  infrastructure  in  its  diplomatic 
offices for the introduction of biometric visas. 

Travel  documents  policy  still  requires  additional  state  control  mechanisms  related  to  the 
procurement and manufacturing of biometric travel documents. Security features, application 
and  issuing  processes  for  travel  documents,  notably  biometric  passports,  are  fully  aligned 
with EU and international standards. 

The  visa-free  regime  with  the  EU  continued  to  be  smoothly  implemented.  In  2022,  2 210 
applications  for  international  protection  were  submitted  by  nationals  of  Bosnia  and 
Herzegovina  in  EU  Member  States,  18%  less  than  in  2021  (2 695).  The  recognition  rate 
(including humanitarian protection) increased from 5% in 2021 to 8% in 2022. 

In  2022,  the  number  of  nationals  from  Bosnia  and  Herzegovina  found  to  be  irregularly 
staying in EU Member States rose by 19%, with 4 775 irregular stays in 2022 compared with 
4 005 in  2021. The number of refusals  of  entry  slightly increased in  2022 (by 5%), from  4 
995 cases in 2021 to 5 260 in 2022. 

Bosnia  and  Herzegovina  continued  good  cooperation  on  readmission  of  its  own  and  third-
country nationals on the basis of the readmission agreement with the EU and implementing 
protocols,  which  are  implemented  in  an  efficient  manner.  The  number  of  return  decisions 
issued to nationals of Bosnia and Herzegovina (2 635 in 2022 against 2 785 in 2021) dropped 
by 5%, while the number of people returned (1 250 in 2022 against 900 in 2021) marked a 
rise of 40%. The return rate increased from 32% in 2021 to 47% in 2022, and stood at 42% 
for  the  first  quarter  of  2023  (275  out  of  650).  Attention  should  continue  to  be  paid  to  the 
successful reintegration of returnees.  

Schengen and external borders  

Institutional set-up and legal alignment 

14 COM(2023) 730 final. 

60 

 
 
 
The  legal  framework  for  border  control  is  partly  aligned  with  the  EU/Schengen  acquis. 
Bosnia  and  Herzegovina  should  urgently  adopt  the  new  Law  on  border  control  aimed  at 
improving the efficiency of integrated border management.  

Bosnia and Herzegovina is satisfactorily implementing the integrated border management 
(IBM) strategy for 2019-2023. The draft  strategy and action plan for 2024-2029 are broadly 
aligned with the EU acquis and need to be adopted in good time.  

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

Bosnia  and  Herzegovina 
the  Advanced  Passenger 
Information/Passenger  Name  Record  (API/PNR)  systems,  a  necessary  condition  for  the 
establishment of a future national  coordination centre (NCC). The risk analysis process  has 
been further improved.  

initial  steps 

to  establish 

took 

Implementation and enforcement capacity 

The  state-level  Border  Police  has  around  25%  vacancy  rate  (562  out  of  the  planned  2 646 
staff), mostly police officers for border surveillance operations. 

Following  the  increased  influx  of  refugees  and  migrants  since  2018,  the  authorities  have 
redeployed available border guards. However, the response remains inadequate. The Border 
Police remains understaffed. Additional police should be trained.   

The  implementation  of  the  integrated  border  management  strategy  for  2019-2023  is 
satisfactory  and  the  coordination  body  overseeing  implementation  of  the  strategy  manages 
the  process  in  a  satisfactory  manner.  Border  infrastructure  and  technical  capacity  have 
improved.  Further  improvement  is  needed,  in  particular  in  the  area  of  border  surveillance, 
inter-agency cooperation and capacity management.  

Further  improvements  of  infrastructure  and  equipment  are  needed  at  a  large  number  of 
border  crossing  points.  Despite  the  significant  quantity  of  donated  equipment,  border 
surveillance  still  needs  to  improve,  to  respond  to  migratory  challenges.  Border  patrol 
operations have been fully restored but are not sufficient to detect irregular border crossings, 
in particular on the border with Montenegro.  

The Border Police and the Service for Foreigners’ Affairs further significantly improved their 
risk analysis capacity. Frontex-certified trainers have trained 73 members of their staff in line 
with  the  most  recent  Common  Integrated  Risk  Analysis  Model  (CIRAM)  2.0.  Data  access 
and exchange issues remain to be further improved. 

Inter-agency  law  enforcement  cooperation  was  satisfactory  overall.  The  Border  Police 
continued to rely on the support of other law enforcement agencies to patrol borders. In 2022, 
the  Border  Police  handed  over  213  criminal  cases  to  other  law  enforcement  agencies  for 
further  processing  (130  in  2021),  significantly  improving  implementation  of  this  pillar  of 
integrated  border  management.  Cooperation  in  the  fight  against  smuggling  of  migrants  and 
trafficking of human beings should improve.  

As the leading investigative and coordination component of the Border Police, with executive 
powers across the country, the central investigation office intensified its activities in the fight 
against  migrant  smuggling  and  trafficking  in  human  beings.  There  was  a  higher  detection 
rate,  in  particular  on  smuggling  (59  compared  with  26  in  2021)  and  forgery  of  documents 

61 

 
 
(183  compared  with  144  in  2021).  International  cooperation  should  improve.  Bosnia  and 
Herzegovina has a number of agreements with neighbouring countries.  

The  Border  Police  cooperates  satisfactorily  with  Frontex  and  Interpol.  Bosnia  and 
Herzegovina participates in the Western Balkan risk analysis network led by Frontex. 

Bosnia  and  Herzegovina  still  needs  to  appoint  a  lead  negotiator,  negotiate  and  conclude  a 
Frontex status agreement with the EU. Bosnia and Herzegovina initialled a status agreement 
in January 2019 which was not  signed nor ratified. With the adoption of the new European 
Border  and  Coast  Guard  Regulation  (EU)  1896/2019  and  model  status  agreement,  a  new 
status  agreement  may  be  negotiated  on  the  basis  of  the  new  Frontex  mandate.  This  would 
enable Frontex to deploy its standing corps to both Bosnia and Herzegovina’s EU and non-
EU borders. Bosnia and Herzegovina has, however, still not  responded to the January 2023 
invitation by the Commission to initiate negotiations. Bosnia and Herzegovina should sign an 
upgraded working arrangement with Frontex for operational cooperation and deployment of 
Frontex  personnel  without  executive  powers.  Cooperation  with  the  European  migrant 
smuggling  centre  of  Europol  has  started  to  improve,  with  Bosnia  and  Herzegovina  being 
actively  involved  in  one  regional  operational  task  force  established  together  with  Slovenia 
and Croatia targeting the Western Balkan migratory route.  

Negotiations on border agreements with Serbia and Croatia are on hold, and an agreement on 
border demarcation should be reached with Montenegro. The joint police cooperation centre 
in Trebinje continued to facilitate the exchange of police data with Serbia and Montenegro. 
Local  border  traffic  agreements  and  joint  patrols  with  neighbouring  countries  have  been 
restored and are being satisfactorily implemented.  

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

62 

 
 
2.3. ECONOMIC CRITERIA 

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. 

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 no progress in this area. After a strong rebound in 2021 from the pandemic-
induced  crisis,  economic  growth  slowed  down  to  about  4.0%  in  2022,  reflecting  a 
deteriorating  international  environment  and  accelerating  inflation.  The  labour  market  was 
resilient  and  unemployment  fell,  but  it  nevertheless  remained  very  high,  while  labour  out-
migration  persisted.  Driven  by  high  inflation,  budget  revenues  increased  strongly  and  the 
public  debt  ratio  fell.  However,  the  quality  of  public  spending  remained  weak,  while  the 
public sector remained inefficient and oversized. The current account deficit increased but its 
financing  was  ensured.  The  financial  sector  remained  stable.  The  business  environment 
continued to be negatively affected by Bosnia and Herzegovina’s fragmented internal market 
and  a  large  informal  economy.  The  rule  of  law  and  the  functioning  of  the  internal  market 
deteriorated further, with recent disputes on the validity of constitutional court ruling for the 
whole  country  and  traffic  blockages  at  inter-entity  boundary  lines.  Political  stalemates  and 
lack  of  cooperation  among  the  various  levels  of  government  continued  to  hinder  necessary 
structural  reforms.  Russia’s  war  of  aggression  against  Ukraine  so  far  had  mainly  indirect 
effects, through higher import prices and uncertainty as well as weaker third-country external 
demand.   

The  implementation  of  last  year’s  recommendations  was  very  limited.  The  2022 
recommendations remain fully valid.  

63 

Table 6.1:202020212022Bosnia and Herzegovina - Key economic figuresGDP per capita (% of EU-27 in PPS)1)31333435Real GDP growth 3.2-3.17.44.0Economic activity rate of the population aged 15-64 (%), total54.558.259.159.1      female42.746.146.746.3      male66.270.471.471.8Unemployment rate of the population aged 15-64 (%), total23.116.217.515.5      female26.419.022.219.9      male21.014.414.512.7Employment of total population (annual growth %)*3.3-1.20.92.3Nominal wages (annual growth %)1.64.04.411.7Consumer price index (annual growth %)0.0-1.12.014.0Exchange rate against EUR1.961.961.961.96Current account balance (% of GDP)-4.6-3.2-2.4-4.5Net foreign direct investment, FDI (% of GDP)2.31.82.32.5General government balance (% of GDP)1.1-5.2-0.3-0.4General government debt (% of GDP)37.436.134.029.3Notes: 1) EurostatSource: Eurostat, national sources2014-19 average* There is no comparable time series for the age group 15-64 
 
 
To  improve  the  functioning  of  the  market  economy,  Bosnia  and  Herzegovina  should  in 
particular:  

→  strengthen  country-wide  regulatory  and  supervisory  institutions,  reinforce  country-wide 
analytical and policy-formulation capacity and publish complete and consistent country-
wide data in a timely manner, in particular in the area of public finances; 

→  improve  the  business  environment  by  simplifying  business  registration  and  licencing 
procedures  and  by  harmonising  and  mutually  recognising  licences  and  certificates 
between entities; 

→  increase the transparency and efficiency of the public sector, in particular by establishing 
institutional  and  regulatory  framework  for  better,  de-politicised 
an  appropriate 
governance and 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  the  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. 

Economic governance 

Economic  governance  did  not  make  progress  during  the  last  year,  resulting  from  a 
legislative recess in autumn in the run-up to the October 2022 general elections and time 
needed  for  the  subsequent  government  formation.  Bosnia  and  Herzegovina’s  short  and 
medium-term  track  record  in  adopting  and  implementing  overdue  structural  economic 
reforms remains very limited, in particular with respect to countrywide measures. The main 
reasons  for  this  are  lack  of  political  commitment  and  insufficient  cooperation  among  key 
stakeholders  together  with  highly  politicised  decision-making  processes  and  institutional 
fragmentation.  The  2023-2025  Economic  Reform  Programme,  an  important  element  for 
Bosnia and Herzegovina's participation in the economic and financial dialogue with the EU, 
was  again  submitted  with  a  significant  delay  and  its  quality  was  once  again  low,  suffering 
from  a  lack  of  internal  consistency  and  insufficient  comittment  towards  country-wide 
reforms.  Furthermore,  the  country  failed  to  participate  sufficiently  in  other  EU  meetings 
which  try  to  prepare  candidate  countries  for  their  integration  into  EU  procedures.  Russia’s 
war of aggression against Ukraine affected Bosnia and Herzegovina mainly through indirect 
channels,  leading  to  higher  import  prices  and  a  slowdown  in  import  demand  from  trading 
partners. In response to the higher cost of living the authorities increased public sector wages 
and pensions and raised social transfers.  

Implementation  of  the  policy  guidance  jointly  adopted  at  the  economic  and  financial 
dialogue with the EU in May 2022 was limited.  The authorities took steps to cushion the 
effects  of  external  shocks  and  to  improve  the  countrywide  public  finance  management 
system. However, in most other areas, in particular in improving the functioning of country-
wide institutions, no progress was achieved.  

Macroeconomic stability 

Economic  activity  slowed  down  in  2022,  reflecting  a  deteriorating  international 
environment and accelerating inflation. Annual output growth slowed from 7.2% in 2021 
to  4%  in  2022.  To  some  extent  this  slowdown  reflects  a  base-year  effect  after  the  strong 
rebound in 2021 and early 2022, which however also led to increasing price pressures. The 
main drivers of growth in 2022 were exports, gross investment (in particular inventories) and 
private  consumption.  In  2023-Q1  economic  activity  slowed  down  further,  with  weaker 

64 

 
 
private  consumption  and  investment  bringing  year-on-year  output  growth  to  1%  compared 
with 5.9% one year before. Increased prices for imported energy and primary commodities as 
a  result  of  Russia’s  war  of  aggression 
against  Ukraine  further  contributed  to 
inflationary  pressures.  At  the  same 
time,  external  demand  decelerated, 
although  from  a  high  level.  During 
growth  was 
2018-2022, 
around  3%,  with  exports  and  private 
consumption  as  the  main  drivers  of 
growth.  Real  GDP  per  capita 
in 
purchasing  power  standards  was  35% 
of  the  EU  average  in  2022,  compared 
with 31% some 5 years earlier. The main impediments to faster income convergence with the 
EU  are  low  investment,  a  poor  business  environment  and  lack  of  reforms  resulting  from 
persistent political tensions, cumbersome licencing procedures and economic and institutional 
fragmentation.  

average 

largely 

The current account deficit widened in 2022. The current account deficit increased to 4.5% 
of GDP in 2022, compared with 2.4% in 
2021, 
reflecting  decelerating 
export revenues and higher spending  on 
imports  driven  by  increased  commodity 
prices.  In  the  first  quarter  of  2023  the 
deficit dropped to 3.6% of GDP, largely 
due  to  lower  spending  on  imports.  The 
deficit  in  the  balance  of  goods  and 
services  has  been  largely  financed  by 
current transfers, primarily consisting of 
workers'  remittances,  accounting  for 
more  than  10%  of  GDP.  Net  FDI 
inflows  rose  to  2.5%  in  2022  and  to 
3.6% of GDP in 2023-Q1. A large part of these FDI inflows was reinvested earnings, while 
foreign greenfield investment remained. Official foreign exchange reserves, which benefited 
from pandemic-related financial assistance including special drawing right (SDR) allocations 
by the IMF, dropped at the end of 2022 to a still-solid level equivalent to about 7 months of 
imports, largely due to higher spending on imports. Bosnia and Herzegovina relies strongly 
on longer-term financing at favourable rates by international financial institutions, such as the 
IMF, the EIB and the World Bank. The gross external debt ratio remained moderate, at some 
58% of GDP at the end of 2022. Overall, the financing of Bosnia and Herzegovina’s current 
account appears feasible, while external vulnerabilities are moderate. 

Inflation surged in 2022 but moderated somewhat after the autumn.  Headline inflation 
accelerated  during  2022,  especially  after  Russia’s  war  of  aggression  against  Ukraine  which 
resulted in surging energy and food prices. Annual consumer price inflation reached a peak of 
17.4% in October 2022, but moderated to 4.0% in July 2023. On average, inflation was 14% 
in 2022 and 8.5% in the first 7 months of 2023. Headline inflation was especially driven by 
increases in food prices which account for about one third of the consumption basket. 

Monetary  policy  continued  to  be  anchored  by  the  currency  board  arrangement.  This 
monetary regime has served the economy well so far as an important pillar of macroeconomic 

65 

-6-303-20-1001020182019202020212022Graph 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-6-4-20246810201720182019202020212022Graph 6.1: Bosnia and Herzegovina -Real GDP growth and contributionsPriv. cons.Gov. cons.GFCFStocksNet exportsReal GDP growthSource: WiiW% y-o-y 
 
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.  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 and which continued to operate only on a 
technical mandate.  

continued 

Public 
finances 
to 
from  strong,  primarily 
benefit 
inflation-driven  revenue  growth, 
governance 
fiscal 
but  weak 
challenges. 
to  pose 
continued 
General  government  revenues  rose 
by  13.4%  in  2022,  in  line  with 
headline 
revenues 
inflation.  Tax 
increased  by    16.7%.  In  parallel, 
government  spending  was  revised 
upward,  rising  by  13.6%  for  the 
whole year. This additional revenue was used for increasing social benefits, such as pensions, 
extraordinary payments to vulnerable groups and an increase in public wages. In contrast to 
the focus on current spending, already approved funds for infrastructure investment, such as 
related to the energy sector, were suspended. According to preliminary data from the Central 
Bank, this resulted in a nominal drop of central governments’ public investment by some 8% 
in  the  first  three  quarters  of  2022.  According  to  first  estimates,  the  general  government 
registered  a  deficit  surplus  of  0.14%  of  GDP  in  2022,  compared  with  a  surplus  deficit  of 
0.34%  of  GDP  in  2021.  Budget  plans  for  2023  are  characterised  by  significantly  higher 
spending  targets  for  current  expenditure,  partly  to  compensate  public  employees  and 
pensioners  for  the  rapid  increase  in  inflation,  while  capital  spending  is  planned  to  remain 
subdued. The public debt ratio dropped to 29% of GDP in 2022 from 34% in 2021, driven by 
high  nominal  GDP  growth.  Overall,  cooperation  and  information  exchange  among  the 
various fiscal authorities has remained very limited, which facilitates tax avoidance. Bosnia 
and  Herzegovina’s  tax  revenues  rely  strongly  on  a  single  source,  namely  indirect  taxes. 
Continued calls by the Republika Srpska entity to dismantle the state-level Indirect Taxation 
Authority thus pose a threat to the revenue collection system and the country’s fiscal stability. 
Contingent  liabilities  pose  a  significant  risk,  in  particular  in  the  area  of  public  enterprises. 
There is a high degree of non-alignment with EU public sector accounting standards, which 
strongly  impedes  the  assessment  of  Bosnia  and  Herzegovina’s  actual  fiscal  position.  As  a 
result, both the deficit and debt ratio could be significantly higher than reported. Fiscal rules 
have been adopted in one entity only, and there is no independent fiscal institution to monitor 
and enforce compliance with fiscal discipline. 

Overall,  Bosnia  and  Herzegovina’s  macroeconomic  policy  mix  does  not  adequately 
address  the  country’s  main  challenges.  Political  disputes  delay  necessary  reforms  to 
improve  its  growth  potential  and  fiscal  policy  focuses  on  short-term  objectives,  neglecting 
longer-term challenges. As Bosnia and Herzegovina’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 used sufficiently to steer the country towards stronger growth 
and  faster  convergence  with  EU  income  levels.  The  effectiveness  of  fiscal  policy  for 
enhancing  Bosnia  and  Herzegovina’s  growth  potential  is  further  severely  limited  by  the 
insufficient  degree  of  cooperation  among  the  various  fiscal  policy  stakeholders  and  the 
absence of an independent and competent fiscal council.  

66 

01020304050-6-4-20246201720182019202020212022*Graph 6.3: Bosnia and Herzegovina -Fiscal developmentsPrimary balance (lhs)Interest (lhs)GG balance (lhs)Public debt (rhs)Source: National sources% ofGDP 
 
Functioning of product markets  

Business environment  

The  business  environment  suffers  from  Bosnia  and  Herzegovina’s  fragmentation  and 
political uncertainty. According to recent OECD surveys, oer half of businesses in Bosnia 
and Herzegovina identify burdensome procedures, paperwork and cost as a major obstacle to 
obtaining licenses, a higher proportion than in any other country in the region and well above 
the regional average of 35%. Businesses that wish to operate across the entire economy still 
face  technical  and  administrative  obstacles,  must  frequently  obtain  the  same  licenses  or 
permits in each entity or local government area and pay a range of different taxes and fees. 
This  increases  the  costs  of  establishing  a  company,  protects  incumbent  companies  from 
competition  and  deters  investors,  hindering  the  functioning  of  an  effective  single  economic 
space. Contract enforcement, in particular settling commercial disputes, remains difficult and 
there is a substantial backlog  in  court  cases. Establishing and implementing property rights 
remains  difficult  in  some  areas,  such  as  real  estate  registration.  Lack  of  cooperation  and 
coordination among  the  various stakeholders is  another major impediment  to  establishing  a 
countrywide  level  playing  field,  with  wide-ranging  negative  effects  on  the  business 
environment.  Recently,  the  Republika  Srpska  entity  adopted  legislation  contesting  the 
application of Bosnia and Herzegovina’s constitutional court rulings on  the entity’s territory. 
This ongoing dispute increases legal uncertainty and undermines the integrity of the country’s 
single economic space. Furthermore, due to a different speed at entity level of aligning with 
the  EU  acquis,  Bosnia  and  Herzegovina’s  economic  and  legal  fragmentation  has  further 
deteriorated. 

The  informal  economy  remained  significant.  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. It also results in lower pension 
benefits, increasing the poverty risk for the elderly and adds to a significant fiscal burden on 
labour,  which  in  turn  impedes  formal  employment  and  negatively  affects  Bosnia  and 
Herzegovina’s international competitiveness.  

Political  leaders  and  judicial  institutions  failed  to  tackle  widespread  corruption. 
Transparency International again ranks Bosnia and Herzegovina 110th out of 180 countries in 
its 2022 annual Corruption Perception Index, making it the worst performer in the Western 
Balkans after 6 years of declining performance. Just 14% of businesses surveyed in Bosnia 
and  Herzegovina  say  that  the  fight  against  corruption  there  is  effective,  a  lower  proportion 
than any other country in the region, and a higher proportion of businesses than in any other 
Western  Balkans  country  said  that  they  had  to  make  irregular  payments.  There  was  no 
progress  on  necessary  reforms  to  strengthen  legislation  on  anti-money  laundering  and 
countering  the  financing  of  terrorism,  and  Bosnia  and  Herzegovina  risks  being  listed  as  a 
jurisdiction under increased monitoring by the international standard-setting body in this area, 
the Financial Action Task Force.  

State influence on product markets  

There  was  limited  progress  in  reducing  the  still-strong  footprint  of  the  state  in  the 
economy. During 2022, some temporary measures related to COVID-19 were discontinued. 
However, the impact of the public sector on the factor allocation remained high, in particular 

67 

 
 
in  the  labour  market,  for  example  by  continuing  to  support  the  oversized  public 
administration  and  poorly  performing  state-owned  enterprises  (SOEs).  Ineffective  service 
delivery  and  poor  human  resource  management  and  accountability  have  major  implications 
for efficiency, quality and access to public services. Many public companies continue to rely 
on  state  support  or  accumulate  payment  arrears  to  the  social  security  systems  or  to  private 
suppliers  (4%  of  GDP  according  to  the  IMF).  Public  procurement  represents  a  significant 
share  of  public  spending  and  thus  plays  an  important  role  for  the  private  sector,  but 
procedures  are  complex  and  administrative  capacity  and  competition  remain  low.  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 
regulated prices.  

While recorded state aid is relatively low, significant indirect state support continues to 
undermine the level playing field. Available data on official state aid points to a rather low 
level (1.2% of GDP in 2021, according to the latest available report). However, this dataset 
appears  to  be  rather  incomplete.  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.  Many  of  Bosnia  and  Herzegovina’s 
SOEs are in poor financial shape; close to half of them experience shortfalls in liquidity and 
require both explicit and implicit budgetary support. Monitoring and managing fiscal risks in 
ministries  of  finance  is  not  sufficient.  The  cost  of  supporting  public  companies  and 
guarantees, which often translate into substantial contingent liabilities, is a heavy burden on 
public  finances  and  thus  on  taxpayers.  SOEs’  total  debts  are  around  26%  of  GDP  (IMF, 
2019).  

Privatisation and restructuring 

No  progress  was  achieved  on  privatisation  and  restructuring  of  publicly  owned 
companies.  According  to  IMF  estimates,  there  are  over  550  SOEs  at  entity  and  municipal 
level  employing  around  80 000  people,  accounting  for  around  11%  of  total  employment 
(about  a  quarter  of  public  sector  employment).  They  control  assets  worth  an  equivalent  of 
100%  of  GDP.  Whereas  legislation  partially  provides  for  open  and  transparent  selection 
procedures,  appointments  to  SOE  boards  are  highly  politicised  in  practice.  Ownership 
responsibilities  are  usually  exercised  in  a  decentralised  manner  by  various  line  ministries, 
subject to no central coordination. The rationale for public ownership is not based on clearly 
defined policy objectives. Actual steps to restructure or dissolve public enterprises remained 
very  limited.  Vested  interests  are  largely  responsible  for  the  slow  privatisation  process  and 
attempts to sell shares in public  companies were largely unsuccessful.  However, there have 
been some initial steps towards strengthen the SOE oversight at entity level. 

Functioning of the financial market  

Financial stability 

The  banking  sector  remained  stable  but  the  financial  sector’s  supervisory  and 
regulatory framework continues to be fragmented.  Key elements of banking supervision 
and  regulation  are  decentralised,  while  the  central  bank’s  role  remained  limited  to 
coordinating  the  local  regulatory  and  supervisory  agencies,  which  might  be  challenging  for 
financial  stability.  Despite  some  international  financial  sector  turbulence,  the  stability  of 
Bosnia and Herzegovina’s financial sector was maintained. A few days after Russia’s war of 
aggression  against  Ukraine,  the  two  entity-level  banking  agencies  had  to  take  over  the 
subsidiaries  of  Russian-owned  but  EU-based  Sberbank  when  their  liquidity  deteriorated 

68 

 
 
rapidly  due  to  quickly  accelerating  deposit  withdrawals.  Banking  sector  profitability 
improved  during  the  last  year,  for  example  with  the  return-on-equity  (ROE)  ratio  reaching 
15.9%  in  2023-Q2.  The  banking  system’s  overall  capital-adequacy  ratio  stood  at  19.5%  in 
2023-Q2,  well  above  the  regulatory  minimum  of  12%.  The  non-performing  loans  ratio 
decreased to 4.1% at the end of 2023-Q2, and the ratio of foreign-denominated loans to total 
loans  also  continued  to  decline.  However,  there  are  sizeable  differences  among  Bosnia  and 
Herzegovina’s 21 banks, with pockets of vulnerability remaining, especially among smaller, 
domestically owned banks. 

Access to finance 

Banking  intermediation  was  adversely  affected  by  high  inflation  and  increasing 
international interest rates. Nominal bank loans rose by 4.2% and 4.4% on average in 2022 
and  the  first  half  of  2023,  which  is  rather  low  given  the  underlying  double-digit  inflation 
rates. Credit demand was negatively affected by declining real disposable income, the highly 
uncertain  outlook  on  inflation  and  interest  rate  dynamics  and  rapidly  increasing  real  estate 
prices. Nominal deposit growth slowed to 5.9% in 2022, but accelerated again to 7.4% in the 
first  half  of  2023.  The  five  largest  banks  accounted  for  about  80%  of  the  sector’s  assets. 
Private-sector  debt  declined  to  56.5%  of  total  debt  at  the  end  of  2022,  which  is  markedly 
above  Bosnia  and  Herzegovina's  5-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  remained  small,  with  market  capitalisation  of  Bosnia  and 
Herzegovina’s  stock markets  of about  17% of GDP  at  the end of 2022.  The use of venture 
capital continued to be very limited. For many micro and small companies, gaining access to 
those guarantees appears to have remained difficult. 

Functioning of the labour market  

Despite a fall in unemployment, the 
labour  market  continues  to  be  held 
back by lack of economic dynamism 
and  structural  problems  such  as 
skill  shortages,  a  significant  brain 
drain  and  work  disincentives. 
Employment  growth  slowed  down  in 
the  second  half  of  2022  and  the  first 
half  of  2023,  to  1.3%  year-on-year  in 
both periods, compared to 2% the year 
before.  The  number  of  registered 
unemployed  declined  by  some  3.6% 
(13 000  persons)  between  June  2022  and  June  2023.  This  brought  the  administrative 
unemployment rate to 29.2% in June 2023 compared to 30.0% the year before. The Labour 
Force Survey (LFS) registered a decline in the LFS unemployment rate from 17.5% in 2021 
to 15.5% in 2022. In the first half of 2023, the average LFS unemployment rate continued to 
decline  to  13.4%.  The  registered  labour  force  continued  to  decline,  by  1.3%  in  the  second 
half  of  2022  and  1.1%  in  the  first  half  of  2023.  Due  to  the  high  share  of  informal 
employment,  in  particular  in  trade  and  tourism,  administrative  data  provides  only  a  partial 
picture  of  Bosnia  and  Herzegovina’s  labour  market  dynamics.  Due  to  methodological 
changes,  the  comparability  of  labour-force  survey  data  over  time  is  limited.  Official  data 
registered an increase in labour participation from 2020 onwards, which could potentially be 
explained  by  government  measures  to  counter  external  shocks  and  better  registration  of 
employment.  However,  this  is  coupled  with  a  fall  in  the  overall  labour  force,  partly  due  to 

69 

203040506070010203040201720182019202020212022Graph 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 
 
persistent labour out-migration of qualified, but also less qualified workers leaving. This has 
a negative impact on the country’s medium-term growth potential.  

Youth unemployment (age group 15-24) returned to pre-COVID-19 levels, dropping to a still 
high rate of 29.1% in the second quarter of 2023, reflecting structural problems.  Long-term 
unemployment also remained high, with about 75% of the unemployed looking for a job for 
more  than  1  year.  High  unemployment  has  persisted  for  years  due  to  challenges  associated 
with  skills  mismatches,  the  insufficient  pace  of  job  creation  and  a  high  tax  wedge,  both, 
impeding  job  creating,  but  also  reducing  the  financial  attractiveness  of  wages  on  the  lower 
end  of  the  scale..  A  large  proportion  (38%)  of  firms  surveyed  by  the  OECD  identified 
applicants’ lack of skills as a reason for unfilled vacancies. There is also a significant gender 
gap, with women’s activity and employment rates around 25 pps lower than those for men. 
Reforms  to  make  the  public  employment  service  more  client-oriented  are  ongoing  but 
provided  budget  and  human  resources  are  very  limited.  The  still-substantial  discrepancy 
between unemployment data according to administrative and according to survey-based data 
points to the need to improve Bosnia and Herzegovina’s labour market statistics.   

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

Union 

Bosnia  and  Herzegovina  has  made  limited  progress,  and  is  between  an  early  stage  and 
some  level  of  preparation  concerning  its  capacity  to  cope  with  competitive  pressure  and 
market  forces  in  the  EU.  The  overall  quality  of  education  remains  inadequate  despite 
relatively sizable spending on the sector. The country continues to lag behind in the energy 
and  digital  transition.  However,  in  response  to  changes  in  global  demand,  some  structural 
adjustment took place, with the focus of value-added moving towards services such as trade, 
IT and tourism.  Economic integration with  the EU remains  high,  but  overall trade is  below 
potential. The higher uncertainty due to Russia’s war of aggression against Ukraine probably 
had  an  adverse  impact  on  investment  and  thus  on  capital  stock  modernisation.  The 
implementation  of  last  year’s  recommendations  has  remained  very  limited.  The  2022 
recommendations remain valid. 

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 accelerated implementation of investment projects 
that  have  been  subject  to  a  clear  positive  cost-benefit  assessment  are  of  particular 
importance in this respect. 

Education and innovation 

Education  continues  to  be  of  low  quality  and  there  is  a  continuing  skills  mismatch. 
According to data from 2021, public spending on education accounted for some 4% of GDP. 
When adding private spending  and support by foreign  donors, the overall amount stands at 
nearly 5% of GDP. However, the education system fails to provide Bosnia and Herzegovina’s 
labour  force  with  the  skills  and  knowledge  necessary  for  smooth  integration  in  the  labour 
market.  Inadequate  education  is  one  important  factor  for  a  particularly  high  LFS  youth 
unemployment  rate  (30.1%  in  2022-Q1),  twice  the  country’s  overall  unemployment  rate. 
Insufficient  coordination  among  the  numerous  stakeholders  results  in  a  lack  of  common 
standards for various levels of education and differences in the quality of teachers’ training 

70 

 
 
and  performance  evaluation.  Teaching  curricula  continue  to  be  outdated  and  are  still  not 
sufficiently  aligned  with  the  country’s  needs.  The  average  achievements  of  students  in 
mathematics,  reading  and  natural  sciences  are  below  the  OECD  average  (Pisa  2018).  The 
country has not confirmed participation in the 2025 PISA evaluation exercise. There has been 
little change in levels of educational attainment in recent years. There is a large share of low-
skilled  people  in  the  population.  Upskilling  strategies  to  increase  the  skill  levels  of  the 
workforce  are  not  sufficiently  developed  and  also  lack  sufficient  providers.  Participation  in 
early childhood education and care is significantly lower than in the EU and elsewhere in the 
region. The illiteracy rate continues to be around 3%, largely as a result of a relatively high 
illiteracy 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 poor 
efficiency  of  the  overall  system.  The  lack  of  an  efficient  funding  system  is  another  factor 
preventing Bosnia and Herzegovina’s innovation policy from achieving better results for the 
funds  spent.  However,  in  the  area  of  establishing  Science  and  Technology  Parks  some 
progress  has  been  achieved  recently.  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  Bosnia  and  Herzegovina’s  capital  stock  remained  behind  the  country’s 
needs, partly due to uncertainties related to COVID-19 and the impact of Russia’s war 
of aggression against Ukraine. Persistent political stalemates and uncertainties also have 
a negative bearing on investment. Gross fixed capital formation recovered from a low base 
in  2022,  increasing  by  6.6%  in  real  terms.  As  a  result,  the  investment’s  share  in  GDP  rose 
slightly  to  21.9%  in  2022,  but  remained  still  below  pre-pandemic  levels,  when  it  reached 
23.1%.  Public  investment  remained  low,  reflecting  political  disputes  and  administrative 
bottlenecks. Inflows of foreign direct investment (FDI) reached 2.5% of GDP in 2022, which 
is slightly higher than in the 5 preceding years but significantly lower than in other countries 
in  the  region.  A  large  share  of  those  FDI  inflows  continue  to  be  re-invested  earnings  of 
foreign  investors  in  the  financial  sector  and  in  tourism.  As  in  the  case  of  gross  fixed 
investment,  the  low  level  of  FDI  inflows  is  impeding  Bosnia  and  Herzegovina’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 labour force and constituting an additional factor supporting brain drain.  

Moving  away  from  coal-based  electricity  and  improving  energy  efficiency  requires 
legislation  and  investments.  Bosnia  and  Herzegovina  features  one  of  the  most  energy-
intensive output generation processes in the region and remains heavily reliant on lignite coal. 
Thus, the level of emissions from coal-fired power plants is a major concern. A reliable and 
secure energy supply is still impeded by the lack of a single regulatory framework to attract 
investment  in  a  low-carbon  energy  sector.  Adopting  laws  on  renewable  energy  and  energy 
efficiency should be a priority, as should state-level legislation on electricity and natural gas 
with  which  the  entities  must  comply.  Bosnia  and  Herzegovina  should  also  design  and 
implement a comprehensive building renovation strategy to improve energy efficiency. Lack 
of progress in these areas contributes to the poor business environment and will prolong the 
path  to  decarbonisation,  transition  to  renewables  and  improved  energy  efficiency  that  the 
current energy crisis has made even more urgent.  

Bosnia and Herzegovina is lagging behind in the digital transition. Businesses there are 
the  least  satisfied  of  any  in  the  Western  Balkans  with  the  digitalisation  of  public  services. 
71 

 
 
Only  around  60%  of  small  businesses  have  a  webpage  and  only  18%  are  active  in  e-
commerce.  Economy-wide  implementation  of  service  digitalisation  is  still  hampered  by  the 
lack  of  political  ownership  and  coordination  between  different  levels  of  the  government, 
which also leads to the insufficient allocation of budgetary resources for implementation. The 
lack of interoperable information and domestic support systems across entities and different 
levels of government in Bosnia and Herzegovina is a major obstacle to developing economy-
wide digital government services (OECD, 2021). Despite repeated requests, there is still no 
countrywide harmonisation  of the e-signature  and the related  coordination, cooperation and 
data  exchange  between  different  administrations  is  still  needed.  Furthermore,  Bosnia  and 
Herzegovina  has  yet  to  adopt  a  new  law  on  electronic  identification  and  trust  services  for 
electronic transactions with a single supervisory body for the whole country in line with the 
EU acquis.  

Sectoral and enterprise structure  

Bosnia and Herzegovina’s production structure shifted slowly over the last 5 years from 
industrial activities towards trade, transport and IT services. Between 2017 and 2022 the 
share of value-added in the trade, transport, tourism and IT sectors rose slightly from 19.9% 
to 20.6% and from 4.4% of GDP to 5.1% respectively, while the share of the manufacturing 
sector dropped, from 12.5% to 11.9%. Public administration’s share in value-added dropped 
from  17.1%  to  15.7%.  Furthermore,  the  company  structure  registered  some  increase  in  the 
share of micro companies (0-9 employees), and medium-sized companies employing between 
50  and  249  employees.  However,  the  majority  of  new  companies  were  often  trading 
companies with lower value-added. Some 93% of all companies are in the category of small 
and micro businesses, i.e. those with less than 50 employees. Overall, the speed of structural 
change has been rather limited.  

Economic integration with the EU and price competitiveness 

Trade and investment integration with the EU remained high but overall trade is below 
its potential. The main export destinations continued to be the EU (Germany, Italy, Croatia), 
but  also  CEFTA  countries,  such  as  Serbia.  Over  the  last  5  years,  trade  shifted  towards  the 
neighbouring region, in  particular Croatia and Serbia. The share of exports to the EU-27 in 
total  merchandise  exports  rose  from  some  71.4%  in  2017  to  73.5%  in  2022.  Exports  to 
CEFTA countries also increased their share in total exports, from 16.1% in 2017 to 18.3% in 
2022.  Bosnia  and  Herzegovina’s  openness  to  trade  (exports  and  imports  as  a  percentage  of 
GDP) recovered from a pandemic-induced low of 82.1% in 2020 to 107% of GDP in 2022. 
Nevertheless, Bosnia and Herzegovina’s openness to trade is still relatively low when taking 
into account  the small  size of its economy.  The  export structure is  not  very diversified  and 
relies  mainly  on  basic  metals,  furniture,  and  textiles.  The  integration  of  Bosnia  and 
Herzegovina’s  financial  and capital  markets  with the EU is  also  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  originates  from  EU  countries.  Annual  FDI  inflows  largely  show  a 
similar pattern.  

72 

 
 
Bosnia  and  Herzegovina’s  overall  price  competitiveness  has  continued  to  deteriorate 
slightly.  After  a  long  period  of  gradual  depreciation  during  2017-2020,  its  real  effective 
exchange rate started to  appreciate in  the second half of 2022 and the first  half of 2023 by 
4.7%  and  0.6%,  respectively.  The  key  underlying  factor  was  a  rising  positive  inflation 
differential  with  its  trade  partners.  In  nominal  effective  terms,  the  currency  appreciated  by 
1.6% and 1.5% during those two periods, mainly reflecting exchange rate movements of the 
Turkish  lira,  the  Chinese  yuan  and  the  British  pound  against  the  euro,  to  which  the 
Convertible Mark is pegged.  

2.4. PUBLIC PROCUREMENT, STATISTICS AND 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.  

Bosnia and Herzegovina has  some level of  preparation  in  the area of public procurement. 
There was limited progress. Bylaws to implement the amended Law on public procurement 
have  been  put  in  place.  However,  public  procurement  remains  prone  to  irregularities  and 
vulnerable  to  corruption.  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 SAA provisions. 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  2023-2027  public  procurement  strategy  and  an  accompanying  action  plan 

that supports its implementation;  

→  increase staffing level and strengthen capacity in the Public Procurement Agency and the 

Public Procurement Review Body. 

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.  Relevant  bylaws  were  adopted  in  December  2022  on  the 
procedure  for  awarding  service  contracts  in  line  with  the  2014  EU  Directives.  The  legal 
framework  on  concessions  and  public-private  partnerships  is  still  highly  fragmented  and 
needs to be aligned with the EU acquis. A roadmap should be prepared for this purpose. All 

73 

025507520152016201720182019202020212022Graph 6.5a: Bosnia and Herzegovina -Exports of goodsEUCEFTAOtherSource: WiiW% ofGDP025507520152016201720182019202020212022Graph 6.5b: Bosnia and Herzegovina -Imports of goodsEUCEFTAOtherSource: WiiW% ofGDP 
 
 
 
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 
authorities should increase cooperation between the respective stakeholders active in  public 
procurement  to  guarantee  fair  competition  and  ensure  coherent  implementation  of  the  legal 
framework.  

The  new  2023-2027  strategy  for  the  development  of  public  procurement  and  relevant 
action plan have not been adopted yet. The Public Procurement Agency is implementing the 
plan  for  integrity  and  the  plan  for  the  fight  against  corruption  both  adopted  in  2022.    The 
Procurement Review Body is  implementing the  2023-2025 mid-term  work plan to  improve 
the processing of complaints.  

The Public Procurement Agency is the body authorised to initiate, implement and monitor the 
public procurement policy in all sectors. The Agency’s administrative capacity is insufficient, 
particularly  for  monitoring  and  support  functions  (22  employees  versus  32  planned)  The 
Agency  should  coordinate  better  with  the  Competition  Council  to  avoid  diverging 
interpretations  of  the  legislation  and  to  ensure  the  systematic  application  of  public 
procurement  procedures.  Coordination  needs  to  be  improved  with  the  audit  and  judiciary 
institutions. 

The Agency manages the public procurement portal. Tender documents and guidelines can be 
downloaded  from  the  portal.  However,  the  exchange  of  information  and  submission  of 
tenders  is  not  conducted  electronically,  as  per  EU  standards,  but  still  partly  in  paper  form. 
Some upgrading has started, but the e-procurement system needs to be further developed and 
made  use  of,  for  increased  transparency.  Some  contracting  authorities  still  do  not  publish 
public  procurement  reports,  and  existing  tender  documents  are  only  available  to  registered 
users, not including civil society groups or the general public. Only a few ministries at state 
level have published their procurement reports over the last 3 years.  

Implementation and enforcement capacity  

In  2022,  the  public  procurement  market  represented  10.65%  of  the  country’s  GDP,  an 
increase of 3.14% compared with 2021. The average number of bids per tender remains low 
at two in 2022.  

In monitoring the award and implementation of contracts, the administrative capacity of 
the  Public  Procurement  Agency  is  insufficient  to  fulfil  its  tasks.  Statistics  collected  from 
contracting  authorities  show  a  decline  in  the  use  of  the  negotiated  procedure  without  prior 
publication (6.69% in 2022 compared with 11.87% in 2021). The share of tenders with one 
submitted bid represented 51% in 2022. The use of price as the only award 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. In 2022, Agency 
initiated  misdemeanour 
monitored  629 
proceedings  in  18  cases  and  submitted  two  criminal  offences  including  upon  initiative  by 
civil society. The Agency has improved public awareness of the legislation governing public 
procurement  and  started  preparing  practical  tools  for  the  implementation  of  the  public 
procurement law such as non-binding guidelines and information on best practices. However, 
no  mechanism  has  been  put  in  place  to  regularly  and  systematically  coordinate  the 
interpretation of public procurement legislation between the key institutions involved. 

individual  public  procurement  procedures, 

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 
74 

 
 
and conflicts of interest in this area. Public procurement remains prone to irregularities and 
vulnerable  to  corruption  during  the  procurement  process  and  contract  implementation.  The 
courts  have  not  penalised  yet  any  corruption  case  in  the  area  of  public  procurement.  The 
Public  Procurement  Agency  organised  training  on  public  procurement  for  most  contracting 
authorities  across  the  country  and  strengthened  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  or  ensure  consistent  decision-
making and legal certainty. The functioning of the Procurement Review Body is weak due to 
its  insufficient  staffing  and  technical  capacity.  94%  of  all  complaints  received  were  solved 
within the deadline. 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 improved.  

Chapter 18: Statistics 
EU  rules  require  Member  States  to  produce  statistics  based  on  professional  independence, 
impartiality, reliability, transparency and confidentiality. Common rules are in place 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,  mainly  in  the  quality  of  government  finance  statistics.  Bosnia  and 
Herzegovina  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 country-wide statistics on government 
finances,  national  accounts  and  the  labour  market.  Bosnia  and  Herzegovina  still  needs  to 
finalise the classification of regions equivalent to the NUTS classification (Nomenclature of 
territorial units for statistics). Last year’s recommendations remain mostly valid. 

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

→  adopt a master plan for the production of national accounts; 

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

adopt a roadmap for preparation of the next population census; 

→  intensify  the  use  of  administrative  data  sources  including  by  establishment  of  a 
comprehensive  and  reliable  National  Statistical  Business  Register  for  precise  and 
extensive data collection. 

As regards statistical infrastructure, the law on statistics 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. The Agency for Statistics of Bosnia and Herzegovina (BHAS) 
and  other  data  producers,  including  the  entities’  statistical  offices,  need  to  strengthen  their 
cooperation.  The  statistical  offices  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 of Documents, Registers and Data 
Exchange (IDDEEA) has continued to cooperate to improve transport statistics. 

75 

 
 
On classifications and registers, the statistical business register is in place, but data received 
from  administrative  sources  remains  insufficient.  The  main  statistical  classifications  are  in 
place. However, the equivalent to NUTS II regions has only been provisionally defined and is 
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,  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. 

As  regards  government  finance  statistics  and  excessive  deficit  procedure  (EDP)  tables, 
Bosnia and Herzegovina should continue efforts to comply with ESA 2010,  in particular to 
improve  sector  coverage,  timeliness,  compliance  with  ESA  2010  rules  and  coverage  of 
transactions. Progress was made in the quality of government finance statistics and Eurostat 
started  to  publish  data  for  Bosnia  and  Herzegovina  in  2022.  Government  finance  statistics 
and excessive deficit procedure tables are transmitted to Eurostat on a regular basis, although 
not fully in line with ESA 2010. Quarterly balance of payments and international investment 
position  data  were  transmitted  without  geographical  breakdown,  and  yearly  data  for  the 
international  trade  in  services  was  also  provided.  Foreign  direct  investment  data  are  only 
partially compliant with  EU requirements. The GDP time series by production, income and 
expenditure  is  available  for  2000-2022.  Bosnia  and  Herzegovina  has  also  put  in  place 
adequate infrastructure for data transmission to Eurostat and the European Central Bank. The 
country does not transmit harmonised indices of consumer prices data to Eurostat. While data 
transmission is still significantly below EU requirements, visible progress has been made in 
recent  years  with  145 data  sets  being  regularly  transmitted  to  Eurostat.  Statistical 
sectorisation for 2020 was published in early 2023. 

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 
statistics needs to be ensured. Inward foreign affiliates statistics for  2020 were submitted to 
Eurostat. A private and business travel survey was conducted for the reference year 2021. 

On  social  statistics,  preparation  for  the  next  population  and  housing  census  has  hardly 
progressed. The necessary legislation has not been agreed among the institutions involved. 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. The labour force survey is conducted annually 
and on a quarterly basis, and data for the first quarter of 2023 was published by BHAS.   The 
labour cost index is not compiled. Intensified cooperation with the institutions responsible for 

76 

 
 
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.  

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  census.  The  continued  delay  in 
organising an agricultural census means a step back on Bosnia and Herzegovina’s plans 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.  

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 protect the EU’s financial interests against fraud in 
the management of EU funds and protect the euro against counterfeiting. 

Bosnia  and  Herzegovina  has  some  level  of  preparation  in  this  area.  Some  progress  was 
made,  notably  in  implementing  the  strategies  on  public  internal  financial  control  (PIFC)  at 
state level and in both entities, producing consolidated reports while improving capacities for 
online  reporting,  and  better  training  civil  servants  in  charge  of  PIFC.  Managerial 
accountability  remains  weak  and  no  efforts  undertaken  to  improve  practices  or  legislative 
framework in this area. All central harmonisation units need to continue strengthening their 
capacities and monitor the effectiveness of internal control functions in the public sector, with 
particular attention to the risk management and internal audit functions, including for public 
companies. The financial and operational independence of supreme audit institutions must be 
ensured in practice. Bosnia and Herzegovina should improve the quality of audit reports and 
step-up communication efforts to reinforce public awareness. As last year’s recommendations 
are only partially implemented, they remain largely valid.  

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

→  improve relevant legislation in public administration and public finance management area 
at  all  levels  of  government  to  better  implement  managerial  accountability  across  public 
bodies; 

→  establish  and  improve  the  oversight  function  of  fiscal  risk  of  entity-level  public 
companies  and  ensure  data  collection  on  PIFC  of  public  companies  at  all  levels  of 
government by using the relevant IT application;  

→  increase  the  impact  of  the  work  of  supreme  audit  institutions  through  adoption  and 

implementation of 2021-2025 communication strategies at entity level. 

Public internal financial control 

77 

 
 
State-level  institutions,  both  entity  governments  and  the  Brčko  District  have  continued  to 
implement  the  comprehensive  strategic  framework  for  public  internal  financial  control 
(PIFC) alongside their individual 2020-2025 PIFC strategies. Annual PIFC reports for 2022 
were  adopted  at  state  and  entity  level.  Governments  and  parliaments  should  better  monitor 
the implementation of recommendations provided by the central harmonisation units (CHU), 
the supreme audit institutions (SAIs) and the internal auditors, particularly those concerning 
risk  management  and  internal  control.  The  IT  tool  was  used  to  produce  PIFC  monitoring 
reports for state-level institutions, the Republika Srpska entity and the Brčko District, while 
the Federation entity still needs to fully digitalise its reporting.  

in 

is  embedded 

Managerial  accountability 
the  countrywide  strategy  on  public 
administration,  the  comprehensive  public  internal  financial  control  and  public  financial 
management  and  the  relevant  legislation  defines  managerial  responsibility  for  PIFC 
processes.  The  Federation  entity  government  has  adopted  broader  guidelines  for  the 
development  of  management  accountability  in  the  public  sector,  but  these  remain  weakly 
implemented.  Across  the  other  levels  of  government,  the  delegation  of  authority  within the 
public  service  is  defined  only  with  regard  to  financial  and  not  administrative  matters  and 
remains  regulated  only  in  the  legislation  on  internal  control,  while  implementation  remains 
slow.  The  problem  lies  not  only  in  a  lack  of  effective  management  responsibility  on  PIFC, 
but  also  in  the  blurry  accountability  lines  in  the  public  administration,  as  well  as  confused 
policy-making  roles  across  various 
lack  of  adequate  performance 
management  of  subordinated  bodies.  Policy  content  is  not  coordinated  with  government 
priorities throughout the public administration. Most public bodies have strategic plans with 
objectives  and performance indicators. However, managers need to  improve the assessment 
of performance.  (Also see Public administration reform).  

institutions  and 

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. 
However,  effective  implementation  has  not  improved,  and  even  less  so  over  public 
companies. The annual PIFC reports do not include data on basic performance indicators on 
PIFC over public companies. More broadly, the legal provisions on internal control are still 
not  well  integrated  in  the  general  regulations  on  public  finance  management,  business 
processes and management information systems at all levels of government and in the public 
companies.  The  PIFC  IT  tool  needs  to  be  used  for  risk  assessment,  risk  mitigation  and 
internal audit particularly and it needs to cover public companies. 

In 2022,  there was  a substantial increase in  the number of first-level  budget  spending  units 
that  submitted  an  internal  control  self-assessment  report.  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  the  coverage  of 
institutions in this area and particularly so in the Federation. Risk management is not yet seen 
as a management activity and is still not incorporated in the decision-making cycle. Budget 
inspection  is  in  place  at  each  level  of  government.  The  legal  basis  ensures  a  separation  of 
budget inspection from internal audit function and this is maintained also in practice.  

Internal audit practice is regulated at state and entity levels as well as in the Brčko District 
and is in line with international audit standards. The internal audit function across all levels 
needs  to  be  improved.  The  internal  audit  manuals  at  all  levels  of  government  have  been 
updated and embedded in the internal audit management module of the PIFC IT application, 
including  quality  assurance  provisions.  The  CHUs  have  a  methodology  in  place  on  quality 
reviews  for  internal  control  and  internal  audit.  State  institutions  regularly  conduct  such 
reviews, whereas entities still need to do so. Despite the positive trend in filling vacancies for 

78 

 
 
internal audit for 2022, problems persist with a fragmented system of internal audit and the 
weak  capacity  of  those  units.  The  CHUs  should  consider  the  further  strengthening  of  joint 
internal  audit services through better coordination. Nearly all internal  auditors in  the public 
sector are certified, with a positive trend also in 2022. Internal audit certification procedures 
are  in  place  and  implemented  at  all  levels  of  government,  except  in  the  Brčko  District. 
Although  the  training  plans  for  professional  development  of  audit  staff  have  improved,  an 
upgrade in capacities in  risk assessment, using IT and analytical tools is required across all 
levels of government.  

Central harmonisation units (CHUs) have been established at state and entity levels and in 
Brčko  District.  Some  improvement  was  undertaken  in  increasing  staffing  of  the  Federation 
CHU, as well as capacity to provide methodological guidance and promote and monitor PIFC 
reforms via the PIFC application across levels of government. The quality of the PIFC reports 
at  entity  level  needs  to  be  improved  by  including  risk  management  and  performance 
indicators  for  public  companies  for  monitoring  fiscal  risks,  as  such  data  is  lacking. 
Additionally, the fiscal oversight function over public companies in both entities needs to be 
improved.  Their  impact  on  internal  control  remains  weak,  as  recommendations  remain  not 
well implemented by public bodies across all levels of government. The coordination board 
of CHUs met regularly. 

External audit 

Regarding the constitutional and legal framework, the functional, operational and financial 
independence  is  regulated  in  the  respective  laws  at  each  level  of  government.  However,  in 
practice, in the Federation entity, the supreme audit institutions were unable to carry out their 
external  audit  function  in  two  instances,  as  some  institutions  were  resisting  the  auditing 
process. 

The institutional capacity of supreme audit institutions needs to be strengthened at all levels 
of government.  The Federation entity  continues to face the particular challenge of ensuring 
external  audit  coverage  of  its  cantonal  level.  All  supreme  audit  institutions  have  been 
implementing  their  strategic  development  plans  for  2021-2025.  Supreme  audit  institutions 
should continue to work closely with prosecutors to address instances of possible fraud and 
corruption  uncovered  during  audits.  The  coordination  board  of  supreme  audit  institutions 
needs  to  be  further  strengthened  in  following-up  effectively  with  audit  offices  on  how  the 
legal framework and related procedures for external audit can be implemented better across 
public bodies and at all government levels.  

With  regard  to  the  quality  of  audit  work,  all  the  supreme  audit  institutions  have  a  broad 
mandate,  which  covers  financial,  compliance  and  performance  audit.  The  number  of 
performance  audits  remained  stable,  with  a  slight  increase  in  the  Federation  entity.  The 
supreme  audit  institutions  have  INTOSAI-compliant  methodologies  and  manuals.  They 
should consider improving the quality of their audits in providing compliance assurance and 
increasing  the  number  of  performance  audits.  The  supreme  audit  institutions  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 supreme audit institutions is limited. Recommendations 
continue to focus mainly on formal compliance and do not address the causes of weaknesses 
or  the  likelihood  of  implementation.  The  rate  of  implementation  of  external  audit 
recommendations  remains  unchanged  at  some  20%-40%  across  all  levels  of  government, 
with some improvement in the Republika Srpska entity. The level of parliamentary scrutiny 
of  audit  reports  remains  weak  across  all  levels  of  government.  Supreme  audit  institutions 

79 

 
 
need  to  establish  closer  partnerships  with  the  parliaments  in  making  recommendations  of 
audit institution-building for the government. 

The  quality  of  audit  findings  needs  to  be  improved.  The  results  should  be  better 
communicated  in  the  audit  reports  and  in  the  media,  while  showing  the  importance  of  the 
SAI’s  recommendations  for  a  better  functioning  public  administration.  Some  efforts  were 
undertaken  at  the  state  level  in  the  outreach  activities  of  supreme  audit  institutions  in  the 
framework of the new 2022-2025 communications strategy. Both entities still need to adopt 
their own communication strategy.  

Protection of the EU’s financial interests 

The legislation at all levels of government ensures some degree of EU acquis alignment as it 
covers  many  elements  of  the  Directive  on  the  fight  against  fraud  to  the  EU’s  financial 
interests by means of criminal law. In the reporting period, no changes in this area have been 
made. The scope and definitions of the offences are not always in line with the Directive: for 
example in the case of the offence of corruption and misappropriation. Further alignment of 
the  legislation  is  needed,  including  on  the  freezing  and  confiscation  of  criminal  assets. 
Effective implementation and enforcement of the legislation also needs to be ensured. 

Bosnia and Herzegovina should also set up an anti-fraud coordination service (AFCOS) to 
facilitate effective cooperation and exchange of information with the Commission, and adopt 
an anti-fraud strategy for protecting the EU’s financial interests.  

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 provided  adequate cooperation on  an  ad hoc basis in  the  reporting  period. As EU 
funds  are  not  managed  indirectly  by  national  authorities,  Bosnia  and  Herzegovina  does  not 
report  on  irregularities  to  the  Commission  through  the  Irregularity  Management  System. 
Bosnia and Herzegovina should develop a track record of cooperation with the Commission 
on investigations. 

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 
determined.  The  Central  Bank  has  a  regulation  in  place  that  obliges  commercial  banks  and 
other entities to withdraw all suspect banknotes and coins from circulation.  

The  Central  Bank  has  continuously  worked  on  improving  professional  knowledge  and 
strengthening institutional capacities for analysing and processing monetary counterfeit data. 
The  Central  Bank  also  has  the  counterfeit  registration  system  (CRS)  application,  through 
which  all  requests  for  the  analysis  of  suspicious  money,  technical  data  on  counterfeits,  i.e. 
analysis  results,  and  various  statistical  data  related  to  counterfeit  money  are  registered. 
However,  no  sanctions  are  imposed  for  failure  to  fulfil  this  obligation.  There  is  no  legal 
obligation  for  credit  institutions  and  other  payment  service  providers  to  ensure  that  euro 
banknotes and coins are checked for authenticity and that counterfeits are detected.  

To  enable  all  counterfeit  banknotes  and  coins  to  be  submitted  for  analysis  to  the  Central 
Bank, in the future, the legal basis needs to be enforced and implemented. The Central Bank 
should sign an agreement obliging the signatory parties to exchange technical and other data 
on  counterfeits  that  were  the  subject  of  their  analysis  with  the  European  Commission  and 
OLAF  for  counterfeit  coins,  as  well  as  an  agreement  with  the  European  Central  Bank  for 
banknotes.  

80 

 
 
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. They contribute to stability, reconciliation and a 
climate conducive to addressing open bilateral issues and the legacies of the past.  

Bosnia  and  Herzegovina  maintained  its  involvement  in  a  number  of  regional  cooperation 
initiatives  such  as  the  Central  European  Free  Trade  Agreement  (CEFTA),  the  Energy 
Community,  the  Transport  Community,  the  South-East  European  Cooperation  Process 
(SEECP)  and  the  Regional  Cooperation  Council,  of  which  it  hosts  the  seat15.  Bosnia  and 
Herzegovina chaired the Adriatic and Ionian Initiative from June 2022 until May 2023. 

The  EU-Western  Balkans  Summit  in  December  2022  took  place  for  the  first  time  in  the 
region, in Tirana. The summit focused on support for the region in the fields of energy and 
migration,  and  on  youth  cooperation,  roaming,  green  lanes  and  overall  progress  on 
implementing the Economic and Investment Plan.  

On  the  Common  Regional  Market,  a  political  breakthrough  was  achieved  at  the  Berlin 
Process  Summit  in  Berlin  in  November  2022,  where  leaders  adopted  the  three  mobility 
agreements  on  higher  education  qualifications,  on  professional  qualifications  and  on  free 
movement  with  identity  cards.  Bosnia  and  Herzegovina  needs  to  swiftly  ratify  the  three 
regional mobility agreements. A number of important decisions agreed at the technical level 
within CEFTA remain blocked. 

Bosnia  and  Herzegovina  has  continued  to  cooperate  closely  with  Croatia,  Montenegro  and 
Serbia under the Sarajevo Declaration Process, which aims to find sustainable solutions for 
refugees and displaced persons as a result of the armed conflicts in ex-Yugoslavia during the 
1990s. Under the regional housing programme, 2 790 housing units were built, purchased or 
reconstructed by the  end of August 2023 in Bosnia and Herzegovina,  able to accommodate 
around 8 200 persons. The completion of the programme is at risk due to significant delays in 
construction, particularly in the Republika Srpska entity. Bosnia and Herzegovina also needs 
to urgently secure the agreed amount of co-funding from the state budget (EUR 11.5 million). 
Significant  challenges  remain  with  regard  to  the  economic  and  social  integration  and  well-
being 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 bilateral visits. 
The two countries have yet to establish fully fledged embassies. Trade flows remain low.  

15 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. 

81 

 
 
 
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  in  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,  with  regular  high-level  bilateral  visits. 
Bosnia  and  Herzegovina  re-initiated  internal  discussion  on  tackling  outstanding  issues, 
including on state borders. The two countries also need to reach an agreement on two dams 
on  the  Drina  river  and  a  part  of  the  Belgrade-Bar  railway  which  crosses  into  Bosnia  and 
Herzegovina’s  territory.  The  Commission  for  Concessions  still  needs  to  decide  on  the 
construction  of  three  hydroelectric  power  plants  on  the  upper  Drina  by  Serbia  and  the 
Republika Srpska entity. Bosnia and Herzegovina opened a consulate general in Novi Pazar 
in August 2022. 

Türkiye is a strong international supporter of Bosnia and Herzegovina and exchanges at high 
level are frequent. The two countries reaffirmed their commitment to the construction of the 
Sarajevo-Belgrade highway, which Türkiye committed to finance.  Bosnia and Herzegovina 
sent  financial  assistance  and  entities’  rescue  teams  to  the  areas  hit  by  the  February  2023 
earthquake. 

Relations with Georgia are good and without open issues, with sporadic bilateral contact. The 
two countries enjoy the visa-free regime. Trade flows remain low.  

Relation  with  the  Republic  of  Moldova  are  good.  The  two  countries  have  several  bilateral 
agreements in place including on investment protection, double taxation and tax evasion. The 
visa-free regime is in force since 2016. While both countries are part of CEFTA, trade flows 
remain low. Official exchanges mainly take place at the margins of regional summits. 

Bosnia  and  Herzegovina  supports  the  territorial  integrity  and  sovereignty  of  Ukraine, 
condemning Russia’s war of aggression. Bilateral relations are generally good but have been 
affected by statements, by certain members of the Presidency, on Russia’s role in Europe and 
significant  hindrances,  due  to  political  contestation,  in  the  implementation  of  restrictive 
measures  against  Russia.  The  two  countries  enjoy  the  visa-free  regime.  A  number  of 
agreements are in place, including on trade and on investment protection. Trade flows remain 
low. 

Relations  with  Croatia  are  good  overall,  although  affected  by  outstanding  bilateral  issues. 
Bilateral visits took place at high level. The two governments held a joint session in Zagreb 
in  June  2023,  discussing  open  issues  and  joint  projects.  Bosnia  and  Herzegovina  opened  a 
consulate general in Rijeka in August 2022. There are open issues concerning land and sea 
borders.  Bosnia  and  Herzegovina  relaunched  procedures  for  concluding  the  1999  border 
agreement, which has not been ratified by either side. Implementation of the 2001 succession 
agreement  has  been  affected  by  issues  on  private  property  and  acquired  rights.  Bosnia  and 
Herzegovina  adopted  a  strategy  for  legal  protection  of  its  interests  in  October  2022,  and 

 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. 

82 

 
 
 
reaffirmed its support for an expert and legal team to dispute Croatia’s plan to build a facility 
for radioactive waste at Trgovska Gora near the border.  

4. 

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP  

CLUSTER 2: INTERNAL MARKET  

This  cluster  covers:  the  free  movement  of  goods  (Chapter  1);  freedom  of  movement  for 
workers (Chapter 2); right of establishment and freedom to provide services (Chapter 3); free 
movement  of  capital  (Chapter  4);  company  law  (Chapter  6);  intellectual  property  law 
(Chapter 7); competition policy (Chapter 8); financial services (Chapter 9), and consumer and 
health protection (Chapter 28).  

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  accelerated  integration  and  growth, 
including  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,  while  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 no progress in  any of the internal market 
areas. There is no clear overview of the country level alignment and implementation of the 
SAA. Preparing to join the EU internal market means that there cannot be separate markets 
within one country.  

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. Bosnia and Herzegovina still needs to take major 
steps  to  align  its  legislative  framework  with  the  EU  acquis,  in  particular  on  technical 
requirements  for  products,  accreditation,  conformity  assessment  and  market  surveillance. 
Last year’s recommendations were not addressed and remain valid. 

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

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

→  adopt a country-wide 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  

On  the  general  principles,  the  legislative  and  institutional  framework  for  the  production, 
distribution  and  marketing  of  industrial  products  is  still  not  in  place.  Bosnia  and 
Herzegovina  has  not  taken  any  steps  to  comply  with  commitments  under  the  SAA  or  to 
repeal conflicting regulations at all levels of government. It does not have a coherent country-
wide approach or a strategy or action plan for alignment with the EU acquis in this chapter. 

83 

 
 
In  September  2023,  the  Constitutional  Court  annulled  the  RS  Law  on  technical  regulations 
due to lack of entity competence on the matter, which is already regulated by state-level law. 
Bosnia  and  Herzegovina  should  also  improve  access  to  and  information  on  regulations  and 
standards and conformity-relevant information for economic operators and the public on the 
obligations of this chapter. 

Non-harmonised area  

No  steps  were  taken  to  ensure  that  legislation  and  administrative  practices  for  the  non-
harmonised  area  are  aligned  with  the  obligations  of  Articles  34-36  of  the  Treaty  on  the 
Functioning of the European Union. No specific body is established or empowered to fulfil 
the obligation of notifying technical regulations. 

Harmonised area: quality infrastructure  

While Bosnia and Herzegovina’s legal bases and administrative structures to ensure 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  exist  at  both  state  and  entity  levels,  but  coordination 
between  them  remains  weak.  There  is  still  no  country-wide  strategy  for  the  quality 
infrastructure,  which  is  necessary  for  Bosnia  and  Herzegovina  to  have  a  coherent  country-
wide approach. 

The  Institute  for  Standardisation  of  Bosnia  and  Herzegovina  is  a  full  member  of  the 
European  Telecommunications  Standards  Institute  (ETSI)  and  an  affiliate  member  of  the 
European  Committee  for  Standardisation  (CEN)  and  the  European  Committee  for  Electro-
technical  Standardisation  (CENELEC).  In  2022,  the  standardisation  institute  adopted  7  050 
European standards as national standards. The  percentage of adopted European standards is 
93.60%.  However,  the  standardisation  institute  remains  understaffed  and  conflicting 
mandatory  ex-Yugoslav  standards  have  still  not  been  withdrawn  in  a  systematic  manner 
across the country. There is still no country-wide register of the legislation in force.  

The  Institute  for  Accreditation  of  Bosnia  and  Herzegovina  (BATA)  is  the  single  national 
accreditation body and full member of the European Cooperation for Accreditation (EA) and 
party  to  the  International  Laboratory  Accreditation  Cooperation  Mutual  Recogonition 
Agreement (ILAC). The Institute remains understaffed. There are 178 conformity assessment 
bodies  in  Bosnia  and  Herzegovina,  comprising  91  testing  laboratories,  4  medical  and  11 
calibration laboratories, 6 product certification bodies and 66 inspection bodies. The Law on 
accreditation  is  still  not  aligned  with  the  EU  acquis.  The  designation  of  conformity 
assessment  bodies  and  conformity  assessment  procedures  are  still  not  applied  consistently 
throughout the country.  

The  Institute  of  Metrology  of  Bosnia  and  Herzegovina  participates  in  EU  technical 
committees,  European  development  programmes  and  cooperation  projects  with  EU 
metrology  institutes.  It  became  a  member  of  International  Measurement  Confederation 
(IMEKO) in August 2022. Metrology institutes in Bosnia and Herzegovina need to cooperate 
and coordinate their activities when implementing the legislation.  Legislation on Metrology 
is not applied evenly across the country undermining legal certainty and the single economic 
space including the adoption of a new Law on metrology in the Republika Srpska entity.  

The  market  surveillance  system  is  still  largely  based  on  mandatory  standards  and  pre-
market control. The legal base dates from 2009 and is not aligned with the EU acquis. In the 
reporting  period,  the  Market  Surveillance  Agency,  which  remains  understaffed,  and  the 
inspection  bodies  of  the  entities  and  the  Brčko  District  carried  out  221  checks  as  part  of 

84 

 
 
proactive  surveillance  and  14  checks  on  reactive  surveillance.  As  a  result  of  189  product 
models  checked,  3  906  unsafe  products  were  withdrawn  from  the  market  (of  which  2 313 
were destroyed), and 8 612 products were brought into compliance with safety requirements.   

Harmonised area: sectoral legislation  

On the EU ‘new and global approach’ product acquis, no alignment has taken place over 
the past 11 years. Bosnia and Herzegovina adopted legislation designed to align with the EU 
acquis  on  low-voltage  devices,  machinery,  electromagnetic  compatibility,  lifts,  personal 
protection  equipment,  non-automatic  weighing 
instruments  and  pressure  equipment. 
However, all EU legislation apart from the EU product  acquis on machinery were replaced 
between  2014  and  2019,  so  de  facto  the  level  of  alignment  is  constantly  going  down. 
Furthermore, even legislation designed to align with the EU acquis is not applied across the 
country,  as  the  legislative  framework  is  fragmented  and  the  Republika  Srpska  entity 
implements its legislation separately. 

There is no country-wide approach to align with the EU ‘old approach’ product acquis or 
with  procedural  measures.  No  progress  has  been  made  since  2013  on  aligning  the 
legislation  with  the  EU  acquis  on  registration,  evaluation,  authorisation  and  restriction  of 
chemicals  (REACH),  on  classification,  labelling  and  packaging  (CLP),  or  on  strengthening 
administrative  capacity  in  this  area.  Bosnia  and  Herzegovina  is  not  aligned  with  the  EU 
acquis on motor vehicles,  two or three wheeled vehicles, tractors (agricultural,  forestry), or 
non-road mobile machinery emissions. 

There  were  no  activities  noted  on  alignment  at  national  level  on  drug  precursors,  firearms, 
crystal  glass, textile labelling,  mixtures and footwear. Bosnia and Herzegovina’s legislation 
remains to be further aligned with the EU acquis on the pricing of medical products. On civil 
explosives, Bosnia and Herzegovina still does not have 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.  

As regards anti-corruption under this chapter there are no specific nor cross-cutting measures 
in place to monitor and analyse the transparency of public bodies when acting in the areas of 
market surveillance and conformity assessment.  

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, no progress was made in the reporting period, due to the fragmentation 
of  the  country’s  system  of  coordinating  social  security  schemes,  limited  administrative 
capacity  and  lack  of  formal  cooperation  among  relevant  authorities. 
  Last  year’s 
recommendations therefore remain valid.  

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

→  start developing a country-wide 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. To work in Bosnia and Herzegovina, an EU citizen 
must obtain a work permit and meet certain conditions (with several exceptions) as provided 

85 

 
 
by  the  Law  on  foreigners.  Employment  in  the  public  administration  is  reserved  for  Bosnia 
and Herzegovina citizens. In 2022, 3 780 work permits were issued to third-country nationals 
(in  2021,  955),  of  which  367  to  EU  citizens  (in  2021,  418).  The  main  sectors  are  civil 
construction, trade, art and recreation, real estate, manufacturing and services. 

The laws on the employment of foreigners of the entities and of the Brčko District 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 country-wide 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  six  are  with  EU  Member  States. 
Another 16 agreements (of which 12 with EU Member States) are implemented on the basis 
of  succession  from  the  former  Yugoslavia.  The  country’s  system  of  coordinating  social 
security schemes remains fragmented, with limited administrative capacity 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. EU rules on postal  services focus on improving the quality of 
universal  service,  gradual  market  opening  to  competition,  and  the  establishment  of  an 
independent regulator. 

Bosnia  and  Herzegovina  is  at  an  early  stage  of  preparation  regarding  the  right  of 
establishment and the 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  country-wide  strategy  for  the  development  of  postal  services 
needs to be established to adopt 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 country-wide law on postal  services  to  further align the legislation with  the EU 
acquis,  including  the  Regulation  on  cross-border  parcel  delivery  services,  and  open  the 
postal market to competition; 

→  align with the EU acquis on mutual recognition of professional qualifications, including 
with the Directive on recognition of professional qualifications and with the Directive on 
a proportionality test before adoption of new regulation of professions. 

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 its principles, and no screening of sector-specific legislation took 
place  to  prepare  it,  due  to  diverging  views  on  how  to  align  with  the  Services  Directive.  A 
register of service-related legislation needs to be established to identify laws that need to be 
amended  and  to  further  align  them  with  the  EU  Services  Directive.  Also  lacking  is  a 

86 

 
 
comprehensive inventory of  the administrative and technical  steps needed  for companies  to 
register  and/or  operate  country-wide.  Compiling  such  an  inventory  would  help  abolish 
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  a  state-level  strategy  with  a  timeline  on  the  development  of  postal 
services  and  adopt  a  consistent  country-wide  regulatory  framework  aligned  with  the  EU 
Postal  Services  Directive.  The  reserved  area  to  the  universal  service  provider  is  still  to  be 
abolished and the postal market needs to be gradually  opened up to full competition in line 
with  the  Postal  Services  Directive.  The  institutional  and  the  administrative  capacity  of  the 
Agency  for  Postal  Traffic  needs  strengthening  to  carry  out  its  regulatory  and  monitoring 
functions in the postal market. There was no progress in aligning national legislation with the 
EU Regulation on cross-border parcel delivery 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 who 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 restrictions, with 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  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 country-wide, central register of beneficial ownership information 
for  legal  persons  and  private  individuals  and  a  register  of  beneficial  ownership 
information for legal arrangements, in line with the EU acquis; 

→  adopt  legislation  to  align  with  the  Payment  Services  Directive  2,  the  Electronic  Money 

Directive 2 and the SEPA Regulation. 

As regards capital movements and payments, Bosnia and Herzegovina 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.  In  addition,  residents  may  only  open  and  hold  a  foreign 
exchange account abroad for a limited amount of time, in specific cases stipulated by law and 
only after obtaining the prior approval of the Ministry of Finance. 

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Entity  laws  on  foreign  investments  still  provide for  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  state-level  law  on  foreign  direct  investments  does  not  provide  for  equal  treatment  of 
foreign and domestic natural persons for the acquisition of real estate. The Stabilisation and 
Association  Agreement  (SAA)  requires  Bosnia  and  Herzegovina  to  adjust  its  legislation  on 
the  acquisition  of  real  estate  so  that  as  of  2021  nationals  of  EU  Member  States  should  be 
treated  in  the  same  manner  as  nationals  of  Bosnia  and  Herzegovina.  However,  Bosnia  and 
Herzegovina  still  lags  this  commitment,  as  the  possibility  for  foreign  natural  persons, 
including  nationals  of  EU  Member  States,  to  acquire  real  estate  depends  on  the  regime 
applied to citizens of Bosnia and Herzegovina by their countries of origin (reciprocity) or on 
bilateral agreements. Moreover, agricultural land cannot yet be owned by foreign natural or 
legal persons.  

The  Central  Bank  of  Bosnia  and  Herzegovina  (CBBH)  has  operated  a  modern  payment 
system since introducing a new current account 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 2, the Electronic Money Directive 2 and the 
SEPA  Regulation)  before  being  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, including 
Electronic Money Institutions. No Electronic Money Institutions have been licensed so far in 
either entity.  

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. It should in particular address customer due diligence requirements, the reporting 
of  suspicious  transactions  and  the  transparency  of  beneficial  ownership.  Bosnia  and 
Herzegovina 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.  The  activities 
envisaged  in  the  AML/CFT  action  plan  need  to  be  implemented  without  further  delay. 
Moneyval’s  evaluators  will  visit  Bosnia  and  Herzegovina  in  February  2024,  assessing  its 
AML/CFT  framework,  in  order  to  complete  the  5th  Round  Mutual  Evaluation  Report.  The 
risk for Bosnia and Herzegovina of being listed by the Financial Action Task Force (FATF) 
remains,  and  in  addition,  no  track  record  on  investigations,  prosecutions  and  final  court 
rulings has been provided.  

Bosnia  and  Herzegovina  therefore  needs  to  improve  its  track  record  of  financial 
investigations, prosecutions and convictions for related offences; make more consistent use of 
legal rules on asset confiscation; and establish an asset recovery office. Preventive measures, 
supervisory action and penalties 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. 

88 

 
 
Bosnia  and  Herzegovina  has  some  level  of  preparation  in  the  field  of  company  law, 
corporate  accounting,  and  audit.  No  progress  was  made  in  this  area.  Further  efforts  are 
needed  to  align  with  the  EU  acquis  on  company  law,  on  accounting  and  on  non-financial 
reporting.  No  harmonisation  of  company  law  requirements  across  the  country  has  been 
carried  out  and  the  different  regional  business  registers  operate  independently  and  without 
any  communication  or  coordination  between  them.  There  is  still  no  single  country-wide 
authority  for  the  oversight  of  statutory  auditors.  The  Commission’s  recommendations  from 
last year were not implemented 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 further align 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, transparency, and statutory audit 

to identify the legislative amendments necessary to align with the EU acquis. 

On  company  law  and  corporate  governance,  Bosnia  and  Herzegovina  is  aligned  to  a 
limited extent with the EU acquis. The existing legislation needs to be reviewed to identify 
the  amendments  needed  to  harmonise  company  law  at  country  level.  The  different 
independent  business  registers  among  entities and the Brčko  District are  not  connected and 
have  no  established  ways  of  coordination.  Due  to  the  lack  of  coordination,  different 
requirements  exist  for  setting  up  and  manage  a  company  between  the  entities.  Companies 
have to register several times to be allowed to operate throughout the country which is not in 
line with the EU Company Law acquis. Further alignment is needed with the Directive on the 
use  of  digital  tools  and  the  Directive  on  cross-border  operations  (mergers,  divisions, 
conversions)  as  well  as  with  rules  on  shareholder  rights,  including  the  encouragement  of 
long-term  shareholder  engagement  (Shareholder  Rights  Directive)  and  gender  equality  on 
boards of directors.  

The legislation on company reporting remains partially aligned with the EU acquis. Bosnia 
and  Herzegovina  will  need  to  align  its  legal  framework  with  the  EU  acquis  on  corporate 
reporting  in  terms  of  financial  and  non-financial  information  and  on  transparency 
requirements for listed companies. It also needs to align with the most recent EU acquis on 
corporate  sustainability  reporting.  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.  In  December  2022,  the  Republika 
Srpska entity amended its Law on accounting and auditing companies on additional financial 
reports and on the double-entry accounting. The Federation entity amended several rulebooks 
related to the FBiH Law on accounting and auditing. Bosnia and Herzegovina still needs to 
designate,  in  line  with  the  EU  acquis  requirements,  one  single  supervisory  authority  with 
country-wide competence responsible for the oversight of statutory auditors. 

Chapter 7: Intellectual property law 
The  EU  has  harmonised  rules  for  the legal  protection  of  intellectual  property  rights  (IPR),  
copyright and related rights. Rules for the legal protection of IPR cover, for instance, patents 
and  trade  marks,  designs,  biotechnological  inventions  and  pharmaceuticals.  Rules  for  the 
legal protection of copyright and related rights cover, for instance, books, films, software and 

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broadcasting. 

Bosnia and Herzegovina is moderately prepared in the area of intellectual property law. No 
progress was made in this area. Significant efforts are required on legislative alignment and, 
in  particular,  on  improving  enforcement  and  coordination.  An  intellectual  property  strategy 
2022-2026 has not yet been adopted. The recommendations from last year were not addressed 
and remain valid. 

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

→  adopt and implement the strategy on intellectual property 2022-2026 and implement the 

strategy on enforcement of intellectual property rights; 

→  further align the legal framework on copyright and related righs with the EU acquis and 

amend the Law on patents; 

→  take  steps  to  increase  the  coordination  and  capacity  of  policymaking  institutions  to 

enforce intellectual, industrial, and commercial property rights. 

The  legal  framework  on  copyright  and  related  rights  is  moderately  aligned  with  the  EU 
acquis. The rules in  the area of orphan works and collective management rights  need to  be 
revised  to  align  with  the  EU  acquis.  No  strategy  on  intellectual  property  is  in  place. 
Copyright works and related rights are deposited and registered in the Institute for Intellectual 
Property.  Six  organisations  in  the  country  are  authorised  for  the  collective  management  of 
copyright  and  related  rights.  The  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  most  areas,  in  particular  on  patents,  trademarks  and 
trade secrets, but also on topographies of semiconductor products and on industrial  designs. 
Bosnia and Herzegovina has acceded to the relevant multilateral conventions, as required by 
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 79 
requests  for  customs  measures  based  on  protected  trademarks,  designs  and  one  due  to  the 
violation  against  the  indication  of  geographical  origin.  It  issued  82  decisions  on  temporary 
retention and seizure of goods (compared with 113 requests and 114 decisions in the previous 
reporting  period).  The  State  Investigation  and  Protection  Agency  investigated  40  cases,  of 
which 13 were closed.  

The administrative and judicial  capacity of enforcement institutions on intellectual property 
rights is insufficient and their coordination needs to improve. The coordination body has been 
established in 2021 and is composed of  representatives  of  enforcement institutions  from all 
levels ofgovernment. The body held two sessions since its creation and remains understaffed. 
Bosnia and Hezegovina’s existing strategy on IPR enforcement remains to be implemented. 
Nor  is  there  a  reliable  system  for  collecting,  analysing  and  exchanging  data  between 
enforcement  institutions.  Steps  need  to  be  taken  to  raise  the  awareness  of  businesses  and 
consumers  on  IPR  in  general  as  well  as  on  the  prevention  of  counterfeiting  and  piracy. 
Prosecutors, judges, and court panels following infringement cases are not sufficiently trained 
on intellectual property rights to handle cases efficiently and consistently.  

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 

90 

 
 
between companies which would significant impede effective 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.  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  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: 

→  amend the Law on competition and the Law on State aid to revise the voting procedures 

in line with the Commission’s Opinion; 

→  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 that the existing aid schemes introduced before the State Aid Council’s establishment 
are aligned with the EU acquis. 

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  rules  in  the  EU 
treaties on restrictive agreements and abuse of dominant position. It still needs to be brought 
into line with the most recent EU acquis, including implementing legislation.  

As  for  the  institutional  framework,  the  functioning  of  the  Competition  Council  is  still 
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.  The  Law  on  competition  needs  to  be  amended, 
notably to revise such voting procedures in line with the Commission’s Opinion. 

Regarding  enforcement  capacity,  the  Competition  Council  is  composed  of  six  members 
assisted by 20 staff. The staff’s level of expertise needs to be further developed and supported 
through relevant training.  

On  implementation,  in  2022  the  Competition  Council  took  35  decisions,  including  2  on 
prohibited agreements,  3 on abuse of dominant  position and 12 on concentrations. It  issued 
18  expert  opinions,  and  3  fines  were  imposed  for  about  EUR  155 000.  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  were  carried  out  in  the 
reporting  period.  The  leniency  programme  for  companies  providing  information  on  cartel 
cases has never been used. The Competition Council should conduct more on-site inspections 
and raise awareness about its leniency programme and mergers, by imposing remedies where 
necessary.  The  judiciary’s  capacity  to  handle  complex  competition  cases  is  improving  and 
needs  to  be  further  strengthened.  In  advocacy,  the  Competition  Council  should  conduct 
market  studies  so  as  to  gain  a  better  understanding  of  competition  in  key  sectors,  detect 
sources  of  competition  problems  and identify solutions.  To tackle unfair  competition  in  the 
market, the Competition Council needs to increase cooperation with other regulatory bodies, 
such as the Public Procurement Agency and the Procurement Review Body.  

State aid 

91 

 
 
The  legislative  framework  on  State  aid,  including  the  Law  on  the  State  aid  system,  is 
partially aligned with the EU acquis and with SAA provisions. The implementing legislation 
is  not  developed  evenly  across  the  country  and  needs  to  be  aligned  with  the  EU  acquis, 
including on de minimis aid and on services of general economic interest. A regional aid map 
has not yet been drawn up and the existing aid schemes have not been aligned with the EU 
acquis on State aid as per SAA rules and deadlines. 

As  for  the  institutional  framework,  the  State  Aid  Council  responsible  for  the  consistent 
implementation of the State aid law is composed of eight members appointed by the Council 
of  Ministers  and  the  governments  of  the  entities  and  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 Law on State aid needs 
to be amended, notably to revise the voting procedure in line with the Commission’s Opinion. 
The  mandate  of  the  members  of  the  State  Aid  Council  from  the  Republika  Srpska  entity 
expired  in  2020,  while  that  of  the  Federation  entity  and  the  state  level  ended  in  2021.  The 
appointments of the new members by the relevant authorities are still pending. 

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

On implementation, the State Aid Council issued six decisions during the reporting period. 
Most State aid measures are put in place by granting authorities without notification or prior 
approval by the State Aid Council. Bosnia and Herzegovina needs to ensure the transparency 
of  all  State  aid  measures.  The  State  Aid  Council  should  continue  monitoring  the 
implementation  of  State  aid  rules  in  large  projects  carried  out  in  cooperation  with  third 
countries.  

Liberalisation  

Concerning liberalisation, the Law on competition and the Law on State aid apply to public 
undertakings  and  undertakings  with  special  or  exclusive  rights.  Bosnia  and  Herzegovina 
needs to demonstrate that these rules are being enforced. 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  among,  and  the  stability  of,  financial  institutions, 
namely  banking,  insurance,  supplementary  pensions,  investment  services  and  securities 
markets. They include rules on authorisation, operation and supervision of these institutions.    

Bosnia and Herzegovina is in between some and moderate level of preparation 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: 

→  improve  cooperation  in  the  area  of  financial  stability  among  all  stakeholders  through  a 

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;  

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→  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  sufficiently 
capitalised and liquid. The overall capital adequacy ratio was 19.6% at the end of 2022, well 
above the regulatory minimum of 12%. However, the fragmented market remains a drag on 
the moderate profitability of the banking sector. Strategies on implementing Basel III are in 
place.  

In  September  2022  and  April  2023,  banking  agencies  adopted  decisions  on  temporary 
measures to reduce the risk of increasing interest rates and to limit banks’ exposures. The aim 
of these temporary measures was to introduce additional rules for expected credit losses and 
offset the consequences of a potentially significant increase in the amount of debt repayment. 
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  fragmentation  of  the  institutional  and  regulatory  set-up  continues  to  impede  effective 
banking supervision. The Standing Committee for Financial Stability did not meet during the 
reporting period, raising concerns about the coordination and regularity of financial stability 
monitoring.  To  ensure  financial  stability,  Bosnia  and  Herzegovina  needs  to  improve 
cooperation  among  the  banking  agencies,  the  Central  Bank,  the  Deposit  Insurance  Agency 
and  relevant  ministries  (a  memorandum  of  understanding  to  this  end  has  yet  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 (increased to 
EUR  35 800  in  November  2022)  still  remains  below  the  requirements  of  the  EU  acquis. 
While  the  implementation  of  the  Law  on  deposit  insurance  strengthens  depositors’ 
confidence  and  should  prevent  bank  runs,  the  bank  resolution  framework  should  be 
established to  enable the creation of a single financial stability  fund that could  enable bank 
resolution  and  provide  sufficient  liquidity.  This  is  a  major  shortcoming  as,  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. 

The  implementation  of  the  methodology  for  the  supervisory  review  and  evaluation  process 
(SREP) continued and  enabled risks and corrective measures  to  be identified 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 4.7% of the outstanding  loan portfolio at the 
end of 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  the  alignment 
and  harmonisation  of  the  entities’  legislation  on  compulsory  vehicle  insurance  to  ensure  a 
country-wide harmonised approach to the liberalisation of the insurance market in Bosnia and 
Herzegovina.  

Some  preparatory  steps  were  made  at  entity  level  for  the  transition  to  a  Solvency  II-based 
regulatory  framework.  The  Insurance  Agency  of  Bosnia  and  Herzegovina  has  to  finalise  a 
conformity analysis of the entity laws with the Solvency II Directive. The Federation entity 

93 

 
 
postponed application of International Financial Reporting Standard 17 (IFRS 17) to January 
2026  due to the low level of readiness of insurance companies, for which a working group 
has  been  establishedto  prepare  for  implementation.  No  progress  was  made  on  voluntary 
pensions.  

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

No progress was made in terms of financial market infrastructure. The legislation is not in 
line with the EU acquis. 

The  regulatory  framework  for  securities  markets  and  investment  services  is  under  the 
entities’  competence.  Both  entities  have  a  securities  market  regulator  (the  Securities 
Commissions)  and  a  dedicated,  though  not  harmonised,  legal  framework  on  the  securities 
market and investment funds.  

With regard to the investment funds sector, some progress was made on alignment with the 
Directive 2011/61/EU on Alternative Investment Fund Managers and Directive 2009/65/EC 
for collective investment in transferable securities (UCITS). The Ministry of Finance adopted 
a proposal for a Law on amendments to the Law on 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.  The  entity-
level Securities Commissions is fully operational and holds monthly sessions.  

On  digital  finance,  the  presence  of  fintech  start-ups  is  marginal  compared  to  traditional 
banks,  which  are  perceived  as  the  main  financial  institutions  for  utilising  digital  financial 
technologies. Approximately 80% of executed payments are carried out in cash, due to a lack 
of  consumer  trust  in  online  payments,  high  credit-card  fees  and  inadequate  legislation  to 
enable  payment  service  providers  to  enter  the  market.  The  banking  sector  in  Bosnia  and 
Herzegovina is dominated by foreign capital and allows transfer of knowledge and solutions. 
However, without a legal and regulatory framework for digital identity, banks can only offer 
hybrid  solutions,  i.e.  using  digital  solutions  and  technology  to  the  level  permitted  by  this 
framework. The majority of banks in Bosnia and Herzegovina have already digitalised some 
processes and introduced principles of sustainability in their day-to-day operations and credit 
analysis, but further development is subject to comprehensive reform.  

the  management  and  monitoring  of  climate-related  and 
On  sustainable  finance, 
environmental risks in the banking sector were included in the Strategic Priorities for 2023-
2025.  This  envisages  a  series  of  concrete  measures  to  be  implemented  in  the  area  of  risk 
assessment,  supervision  and  international  cooperation,  as  well  as  the  establishment  of  rules 
for  managing  to  climate-related  and  environmental  risks.  Bosnia  and  Herzegovina  should 
ensure  these  Strategic  Priorities  are  fully  implemented  and  make  further  progress  on  the 
integration of sustainable considerations in its regulatory financial framework. 

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 has rules for upholding patients’ rights in cross-border healthcare and in 
preparing  for  and  responding  to  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  -    none  of  last  year’s 

94 

 
 
recommendations were implemented, so they remain valid. The legislation on serious cross-
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 banning smoking in public places in line with the EU acquis, 
ratify the protocol to eliminate illicit trade in tobacco, and start to enforce both measures;  

→  further  align  its  legislation  with  the  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 and product safety with the EU 

acquis. 

Consumer protection 

On horizontal aspects, the state-level law on consumer protection was adopted in 2006 and 
is now very outdated. It needs urgent alignment with the latest EU acquis to address rapidly 
changing  digital  markets  and  to  address  the  risk  of  unequal  protection  of  consumers  in  the 
entities.  The  legal  framework  for  consumer  credit  and  distance  marketing  of  financial 
services  is  also  not  aligned  with  the  EU  acquis.  The  Ombudsperson’s  office  for  consumer 
protection failed to provide data on decisions issued in 2022.  

The  legal  framework  for  product  safety  is  still  not  aligned  with  the  EU  acquis.  Over  the 
reporting  period,  the  Market  Surveillance  Agency  and  the  inspection  bodies  of  the  entities 
and the Brčko District conducted 221 checks as part of proactive surveillance, and 14 checks 
on reactive surveillance. As a result of 189 product models checked, 3 906 unsafe products 
were  withdrawn  from  the  market  (of  which  2 313  were  destroyed),  and  businesses  brought 
8 612 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 and no progress was 
made on e-health or on an integrated health information system. 

On tobacco control policies, legislation at the level of the entities and the Brčko District is 
not  aligned  with  the  relevant  EU  acquis.  The  Federation  entity  Law  on  tobacco  control 
entered into force in May 2023. It regulates the use, advertising, flavouring and packaging of 
tobacco and other smoking products. However, the law includes extensive exceptions and is 
likely to have a limited impact, including on indoor smoking in public and commercial areas. 
Although Bosnia and Herzegovina is a party to the WHO Framework Convention on tobacco 
control, it does not fully implement it due to the lack of systematic monitoring, and it has still 
not ratified the protocol to eliminate illicit trade in tobacco products. 

The legal framework on blood, tissues, cells and organs at the level of the entities and the 
Brčko  District  is  not  aligned  with  the  EU  acquis.  The  legal  framework  on  biomedically 
assisted  fertilisation  remains  fragmented,  so  it  cannot  be  evaluated  as  aligned  with  the  EU 
acquis  across  the  country.  Bosnia  and  Herzegovina  does  not  have  the  necessary 
administrative  capacity  to  fulfil  the  requirements  laid  down  in  the  acquis  on  human  organ, 
tissue  and  cell  transplantation.  The  entities  have  established  institutes  for  transfusion 
medicine, whose transplantation programmes are organised at entity level with very limited 
cooperation between them.  No progress  has been made in  setting  up a state-level  oversight 
system to ensure efficient coordination throughout the country.  

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Legislation on serious cross-border health threats, including communicable diseases, has 
not yet been aligned with the EU acquis at all levels of government. Bosnia and Herzegovina 
needs  to  strengthen  coordination  between  the  entities  and  the  state  level  on  communicable 
disease  surveillance  and  response.  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.  

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.  On  cancer  screening,  Bosnia  and 
Herzegovina  still  has  no  country-wide  cancer  control  plan  or  country-wide  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 
multidisciplinary  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,  activities  to  reduce  alcoholism  and  for  the  prevention  of  alcohol-
induced disorders were carried out  with  the participation of NGOs.  Drug abuse prevention 
and  harm-reduction  preventive  measures  are  not  implemented  systematically,  though  some 
are implemented through education and NGO activities. There is no systematic approach to 
rehabilitation and social reintegration, and such programmes have been introduced unequally 
in different parts of the country.  

In September 2022 the Republika Srpska entity expanded the scope of health insurance and 
increases  its  coverage  by  introducing  the  right  to  health  protection  and  right  to  salary 
compensation due to health incapacity.  

On  health  inequalities,  accessibility  to  healthcare  for  all  citizens  is  still  a  key  challenge 
despite legislation stipulating  that equal  access  to  health should be in  place.  One of Bosnia 
and  Herzegovina’s  key  reform  priorities  is  to  provide  good  quality  accessible  public 
healthcare for all, including marginalised groups. Access to healthcare services for Roma is 
only  possible  if  they  are  registered  at  the  employment  or  education  administrations,  which 
means  that  many  Roma  do  not  have  health  insurance.  Obstacles  to  the  mobility  of  patients 
between different entities or cantons persist and illustrate the complexity and inefficiency of 
the system; this must be improved and harmonised with the EU acquis. Women and girls face 
problems  with  healthcare  due  to  lack  of  health  insurance  and  poorly  organised  services 
related to sexual and reproductive health, among other things. This especially affects women 
from  marginalised  groups  (including  Roma  women,  women  from  rural  areas,  women  with 
disabilities), through a disproportionate lack of access to healthcare. Women and girls were 
disproportionally  affected  by  the  COVID-19  pandemic,  most  particularly  by  being  on  the 
frontlines  of  the  pandemic  and  owing  to  the  loss  of  jobs  in  care,  hospitality  and  service. 
Bosnia and Herzegovina still needs to take concrete steps to include a gender perspective in 
the  planning  and  implementation  of  relief  and  recovery  measures  in  case  of  a  healthcare 
crisis.  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. While there has been improvement in addressing gender-based violence, Bosnia 
and Herzegovina still needs to make significant investments in developing its multi-sectoral 
response  mechanisms,  including  in  healthcare  institutions,  for  victims  of  gender-based 

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violence,  including  sexual  violence.  Bosnia  and  Herzegovina  needs  to  continue  aligning 
healthcare, maternity, paternity and parental leave benefits and ensure that women, including 
women  from  marginalised  groups,  have  equal  access  to  health  insurance  and  services.  (See 
also Chapter 19) 

For  medicinal  products  for  human  use  and  medical  devices  the  state-level  Agency  for 
Medicines and Medical Devices (ALMBiH) is the regulatory body in charge of securing the 
functional,  coordinated  and  uniform  system  for  regulation  of  such  products,  supervising  a 
single market for them, and ensuring their availability on the entire territory of the country. 
The  Republika  Srpska  entity  Law  on  pharmaceuticals  and  medical  devices,  which  provides 
for  the  establishment  of  an  entity-level  agency  with  the  same  responsibilities  as  ALMBiH, 
was repealed by the Constitutional Court in December 2022.  

CLUSTER 3: COMPETITIVENESS AND INCLUSIVE GROWTH  

This  cluster  covers:  Digital  transformation  and  media  (Chapter  10);  Taxation  (Chapter  16); 
Economic  and  monetary  policy  (Chapter  17);  Social  policy  and  employment  (Chapter  19); 
Industrial  policy  (Chapter  20),  Science  and  research  (Chapter  25);  Education  and  culture 
(Chapter 26); and Customs union (Chapter 29). 

Bosnia and Herzegovina has some level of preparation in the areas of taxation, social policy 
and employment, science and research and customs. It is at an early stage of preparation on 
digital  transformation  and  media,  economic  and  monetary  policy,  industrial  policy,  and 
education  and  culture.  Unfortunately,  Bosnia  and  Herzegovina  has  made  limited  or  no 
progress in any of these areas.   

Chapter 10: Digital transformation and media 
The  EU  supports 
for  electronic 
communications, electronic commerce and audiovisual services. The rules protect consumers 
and support the universal availability of modern services.  

internal  market 

functioning  of 

the  smooth 

the 

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.  Negotiations  on  association  to  the  Digital  Europe 
Programme  should  be  finalised  by  the  end  of  2023.  Last  year’s  recommendations  remain 
valid. 

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

→  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; develop a legislative framework on cybersecurity in line with the EU acquis; 

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

the EU acquis. 

Regarding electronic communications and information and communication technology, 
Bosnia  and  Herzegovina  has  still  made  no  progress  in  adopting  the  legislation  related  to 
electronic  communications  and  electronic  media  in  line  with  the  2018  EU  regulatory 

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framework,  nor  has  it  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.  The mandate of its Board expired  at  the 
end of 2017 and the Parliament has still not appointed a new board. 

In  2022,  there  were  61  internet  providers,  875 598  broadband  subscribers  and  3 705 589 
internet users (110.9% penetration rate, counting both households and business connections), 
with a penetration rate of 24.8% for broadband internet. 

Regarding  information  society  services,  Bosnia  and  Herzegovina  made  no  progress  in 
adopting a country-wide 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.  Nor  has  progress  been  made  in  ensuring  the  interoperability  of  the  electronic 
signature  system  aligned  with  the  EU  acquis  throughout  the  country.  A  functional  and 
interoperable  electronic  signature  system  would  facilitate  secure  electronic  communication 
and  digital  transactions,  allowing  various  sectors  (public  administration,  taxation,  customs, 
banking,  judiciary) to  operate in  a more  efficient and effective manner, improving business 
environment and enabling swift access of citizens to public services. One company and two 
state-level  institutions  now  offer  e-signature  services.  Bosnia  and  Herzegovina  has  no 
national  open  data  policy  in  place.  Alignment  with  the  Digital  Services  Act  and  Digital 
Markets  Act  needs  to  be  stepped  up,  to  provide  predictability  for  the  business  community. 
Bosnia and Herzegovina should also align with the European Interoperability Framework and 
the Interoperable Europe Act. 

Concerning  cybersecurity,  Bosnia  and  Herzegovina  does  not  have  a  comprehensive 
legislative  framework  on  the  security  of  networks  and  information  systems  (a  law  on 
information security is in place only in the Republika Srpska entity), and made no progress in 
adopting a country-wide strategy. Moreover, the country made no progress in designating a 
country-wide  single  point  of  contact  responsible  for  coordination  and  cross-border 
cooperation.  Bosnia  and  Herzegovina  needs  to  establish  a  network  of  computer  security 
incident  response  teams  (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 audiovisual policy, Bosnia and Herzegovina made no progress in developing and 
adopting  a  law  on  electronic  communications  and  electronic  media  in  compliance  with  the 
EU  acquis  and  to  harmonise  entity  legislation  with  the  state-level  law  on  the  public 
broadcasting system. No progress has been made in adopting legislation on media ownership 
transparency,  including  a  register  of  ownership  structures,  or  in  adopting  legislation  on 
advertising in the media. The Communications Regulatory Agency adopted by-laws to align 
national  rules  with  the  EU  acquis.  The  government  also  committed  to  strengthen  the 
independence  of  the  media  regulatory  authority.  Bosnia  and  Herzegovina  has  thus  met  the 
requirements  for continuing  their participation  in the MEDIA  and cross-sectioral  strands of 
the  Creative  Europe  programme.  Bosnia  and  Herzegovina  took  limited  steps  in  the 
preparation of the second phase of the digital switchover, with public broadcasting services 
acquiring  equipment  needed  to  switch  to  digital  terrestrial  broadcasting.  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 

98 

 
 
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 rules on taxation cover value-added tax, excise duties and aspects of corporate taxation. 
They  also  cover  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. 
Country-wide  harmonisation  remains  insufficient,  hindering  progress  towards  a  single 
economic space. 

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; 

→  make  progress  on  the  electronic  signature  (e-signature)  in  order  to  ensure  its 

interoperability and a harmonised country-wide 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 country-wide role must be 
maintained. 

As regards excise duties on tobacco, alcohol and energy, there are considerable discrepancies 
with  the  acquis  on  the  scope  and  classification  of  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, the tax and social contribution regimes in the two entities have continued 
to diverge, hindering progress towards a single economic space. 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  has  yet  to  be 
adopted.  

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  exchanging  financial 
account information based on the OECD single global standard. Bosnia and Herzegovina has 
signed  and  implemented  38  double  taxation  agreements,  of  which  19  with  EU  Member 
States. 

Concerning  operational  capacity  and  computerisation,  there  needs  to  be  further 
improvement  of  coordination,  cooperation  and  data  exchange  among  Bosnia  and 
Herzegovina’s  different  tax  administrations,  including  the  country-wide  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. 

99 

 
 
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 
and  there  was  no  progress,  in  particular  in  terms  of  the  cooperation  and  coordination  of 
macroeconomic  and  fiscal  policies,  as  evidenced  by  the  difficulties  in  the  preparation  and 
execution  of  the  Economic  Reform  Programme  (ERP)  and  the  failure  to  appoint  a  new 
governing board of the Central Bank. Monetary policy underpins economic stability, but the 
full independence of the Central Bank has yet to be ensured. 

The  2022  Commission’s  last  year’s  recommendations  were  not  met  and  therefore  remain 
valid. In the coming year, Bosnia and Herzegovina should in particular: 

→  maintain  the  integrity  of  the  currency  board  arrangement  and  the  independence  of  the 
Central Bank, and appoint the members of its governing board without any further delay; 

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

→  ensure  consistent  political  support  for  and  high  visibility,  country-wide  ownership  and 
coherence of the Economic Reform Programme, including its medium-term macro-fiscal 
framework; enhance administrative capacity to design, implement and monitor economic 
reforms. 

As  regards  monetary  policy,  the  exchange  rate  regime  continues  to  be  characterised  by  a 
currency  board  arrangement,  which  links  the  convertible  mark  (BAM)  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 does not ensure the Bank’s unconditional independence and is 
not  fully aligned with  the EU  acquis  as  regards the prohibition  of monetary financing.  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.  

The  mandate  of  the  Central  Bank’s  governing  board  expired  in  August  2021  and  the 
Presidency has still not appointed a new one. The outgoing governing board remains in office 
ad interim, to ensure the core tasks and functions of the Central Bank. 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. Proposals for the use of Central Bank reserves for 
fiscal  purposes  resurfaced  occasionally,  although  such  measures  would  undermine  the 
currency  board  arrangement.  Therefore,  preserving  the  integrity  of  the  currency  board 
arrangement and the independence of the Central Bank remains crucial. 

The Central Bank has improved its operational risk management and became a member of the 
International  Operational  Risk  Working  Group  (IORWG).  In  July  and  December  2022,  the 
Central  Bank  amended  the  reserve  remuneration  rates  in  order  to  harmonise  with  the  ECB 
reference rate, but also to partly cushion the impact of the increasing ECB reference rate on 
banking sector operations. 

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Banking supervision powers lie with the two entities’ banking agencies, but remain impeded 
by  fragmented  competences  and  insufficient  coordination,  cooperation  and  information 
sharing. 

Concerning  the  budgetary  framework,  some  work  has  been  going  on  in  order  to  improve 
the  reporting  in  the  context  of  the  EU’s  excessive  deficit  procedure.  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 medium-term budgetary framework remains 
insufficiently  developed  and  underused  as  a  policy-guiding  instrument,  as  its  adoption  is 
often severely delayed by political disagreements. The alignment of the underlying statistical 
framework  with  the  requirements  and  definitions  ofthe  European  System  of  National  and 
Regional  Accounts  (ESA  2010)  remains  limited.  The  still  outstanding  agreement  on  the 
sectorisation of public accounts as well as the country’s fragmented institutional set-up and 
limited  cooperation  between  the  different  authorities  and  bodies  involved  are  important 
impediments  in  this  respect..  The  Central  Bank  and  the  Directorate  for  Economic  Planning 
(DEP), which is an independent state-level institution, are producing regular macroeconomic 
forecasts. However, their quality is strongly impeded by the poor quality and late submission 
of  country-wide  statistics.  While  the  Central  Bank’s  methodological  underpinning  of  its 
forecast is publicly available, this is not the case with the forecast method of the DEP. The 
Medium-Term  Budgetary  Framework  forms  the  base  of  the  country’s  annual  budgets, 
although  with  a  strong  entity-level  emphasis.  The  adoption  of  this  framework  is  ofter 
impeded by the country’s frequent  political  stalemates.  The underlying assumptions are not 
very transparent and the description of medium-term policies and their fiscal implications is 
very  limited  and  usually  only  focussed  on  entity  level.  The  country  does  not  have  a  fiscal 
council, as required by the EU acquis. 

Regarding  economic  policy,  the  overall  quality  of  Bosnia  and  Herzegovina's  medium-term 
economic reform programme (ERP) did not improve this year and was again submitted with a 
two-month  delay.  The  Council  of  Ministers  was  late  in  adopting  the  activity  plan  formally 
empowering the Directorate for Economic Planning to effectively coordinate the preparation 
of  the  programme.  All  of  this  points  to  long-standing  and  significant  weaknesses  in 
administrative cooperation and policy formulation. The policy guidance jointly agreed at the 
July  2022 Economic and Financial Dialogue between the EU and the Western Balkans and 
Türkiye  was  implemented  only  to  a  limited  extent.  The  capacity  to  design,  implement  and 
monitor  structural  reforms  remains  very  limited.  A  country-wide  medium-term  reform 
programme  that  is  coherent,  consistent  and  based  on  a  jointly  agreed  prioritisation  has  not 
been  established  yet.In  addition,  the  coordination  role  of  the  Directorate  for  Economic 
Planning remains weak and lacks sufficient resources and competences. 

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  inclusion  and  social 
protection, and social dialogue at EU 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 
addressed  as  regards  employment,  social  inclusion  and  protection,  and  poverty  reduction, 
especially  related  to  coordination  among  the  responsible  institutions  across  the  country. 
Limited  progress  was  made  on  the  recommendation  related  to  development  of  the  Youth 
Guarantee  implementation  plan.  The  Commission’s  recommendations  from  last  year  were 
only partially implemented and therefore remain valid.  

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

→  develop  and  adopt  entity-level  and  country-wide  employment  strategies  as  a  policy 
framework, while providing for additional capacity for implementation and monitoring; 

→  finalise and adopt  the 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  would  needs  to  be  further 
improved, notably as concerns the protection of workers from discrimination. 

In  January  2023,  the  new  Brčko  District  Law  on  employment  and  rights  during 
unemployment  entered  into  force,  replacing  an  earlier  law.  The  new  law  increases 
unemployment benefits, extends the duration of the right to unemployment benefit, regulates 
public works and establishes the obligation to develop a Brčko District employment strategy. 

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  of  workers  and  the 
enforcement  of  labour  inspections.  Shortcomings  in  labour  laws  as  concerns  crisis 
management,  were  made  clear  during  the  COVID-19  pandemic.    For  instance,  the  labour 
legislation generally lacks provisions regarding remote work and organisation of work during 
emergency situations. 

Laws  on  health  and  safety  at  work  are  in  place  in  the  entities  and  the  Brčko  District. 
Following  the  adoption  of  new  occupational  safety  and  health  law  in  the  Federation  entity, 
new bylaws regulate risk assessment, the licencing of authorised entities and the performance 
of  periodic  review  in  the  area  of  occupational  safety  and  health.  The  bylaws  regulating 
specific  aspects  of  occupational  safety  and  health  are  not    harmonised  with  the  EU  acquis 
throughout the country.  

The enforcement and implementation of legislation remains partial, especially when it comes 
to  inspection  capacity,  proper  prevention  of  injuries  at  work,  investment  in  safety  and 
relevant  training  for  employers,  and  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 the most affected sectors, was not published for 2022.  

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  as  well  as 
their internal  capacity.  The number of branch  and sectoral  collective  agreements  concluded 
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.  

Although laws on social entrepreneurship are adopted in the Republika Srpska entity and in 
Brčko  District,  their  adoption  is  still  pending  in  the  Federation  entity.  Regarding 

102 

 
 
employment  policy,  there  is  still  no  country-wide  employment  strategy  in  place.  A  2021-
2027 employment strategy was adopted in the Republika Sprska entity, including the Youth 
Guarantee. An employment strategy still needs to be adopted in the Federation entity.  

According  to  the  data  of  the  labour  force  survey  in  2022,  only  40.2%  of  the  working  age 
population is employed, but only 47.6% 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,  standing  at  36.8%  of  the  total 
number  of  employed  people.  Shares  of  men  and  women  in  the  unemployed  population  are 
roughly the same, pointing to the significantly lower activity rate of women of working age 
(over  60%  of  the  inactive  population  are  women).  Youth  unemployment  remains  high,  as 
40%  of  those  aged  15-24  actually  looking  for  work  are  unable  to  find  it.  81%  of  the 
unemployed are younger than 50. Long-term unemployment prevails, as almost 57.8% of the 
total unemployed have been looking for work for more than 2 years and have been unable to 
find it. This also points to a mismatch between the outputs of the education system and the 
real needs of the labour market, and the predominantly structural nature of unemployment. 

The  highest  share  in  educational  structure  of  unemployed  people  are  those  who  completed 
secondary  education  and  specialisation  (70.1%),  followed  by  those  who completed  primary 
school or lower education (15.3%), and those with a college, university, master and doctoral 
degree (14.5%).  

The trend of labour emigration from Bosnia and Herzegovina to the EU has been 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 33 147 only in 2021 due to the COVID-19 pandemic. 

The  capacity  of  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. In the Republika 
Srpska  entity  the  public  employment  service  has  been  be  discharged  from  administrative 
duties  related  to  health  insurance  and  other  social  benefits  for  the  registered  unemployed. 
Thisis not yet the case  in other parts of the country. 

Bosnia  and  Herzegovina  needs  to  swiftly  complete  and  adopt  the  Youth  Guarantee 
Implementation Plan.  

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

On  social  inclusion  and  protection,  there  are  still  no  country-wide  strategies  on  poverty 
reduction, social inclusion and protection. Nor is there a system at state level for monitoring 
policy implementation. For persons with disabilities, institutional care is still prevalent.  The 
issue  of  accessibility  to  public  buildings  needs  to  be  addressed  in  a  systematic  manner. 
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 an 

103 

 
 
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 
healthcare 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 differences in coverage, targeting efficiency 
and generosity.  Cooperation  between social service centres  and employment  services is  not 
well established. The transformation of institutions for social protection and, in particular, of 
institutions for children without parental care is still ongoing. Deinstitutionalisation requires 
comprehensive reform of financing of new services for both capacity building and support for 
social service centres across the country. Both entities and Brčko District started developing 
the roadmap for deinstitutionalisation. 

The  scope  and  duration  of  the  employment  and  social  rights  related  to  maternity,  paternity 
and  parental  leave  remains  uneven  throughout  the  country.  Although  most  of  the  existing 
legislation envisages various rights including mandatory maternity leave and protection from 
dismissal,  the  issue  of  wage  compensation  for  employed  parents  during  maternity  leave  is 
still unresolved. 

There are still no country-wide systematic measures to improve the situation of older persons. 
Bosnia  and  Herzegovina  should  adopt  a  new  action  plan  for  children,  as  each  entity 
implements the child reform activities based on their existing strategies and legal framework.  

In  the  Federation  entity,  a  new  Law  on  material  support  for  families  with  children  entered 
into  force  in  October  2022,  introducing  uniform  standards  for  the  financial  support  of 
children  and  unemployed  mothers  and  reducing  some  of  the  inequalities  among  cantons. 
However,  this  law  does  not  regulate  wage  compensation  for  employed  parents  during 
maternity leave, which remains regulated separately by each canton.  

The EU statistics on income and living conditions (EU-SILC) are still not available in Bosnia 
and Herzegovina, although the country conducted the necessary surveys in 2022 and spring 
2023 

On non-discrimination in employment and social policy, although labour laws within the 
country  address  the  issue  of  non-discrimination,  there  are  still  different  maternity  leave 
benefits and definitions of parental leave across the country. Bosnia and Herzegovina needs 
to establish uniform minimum maternity leave benefits across the country and harmonise the 
definition of maternity, paternity and parental leave to eliminate discrimination.  Apart from 
policy  frameworks  that  target  the  increase  of  employment  opportunities  for  persons  with 
disabilities,  there  are  no  strategies  or  action  plans  in  place  specifically  developed  for 
employment-related  discrimination.  No  official  data  on  the  employment  of  persons  with 
disabilities  were  published.  The  labour  market  and  social  policies  have  not  been  very 
successful  in  addressing  the  specific  needs  of  vulnerable  populations,  including  the  Roma. 
According  to  the  mapping  performed  under  the  EU  supported  analysis  of  persons  with 
disabilities  and  Roma,  around  82%  of  the  Roma  interviewed  reported  that  they  are  either 
unemployed  (40%)  or  inactive  of  the  labour  market  (42%).  The  weak  links  between  the 
responsible ministries and lack of cooperation constitutes a  barrier to progress. In 2022, the 
Ombudsperson  dealt  with  387  cases  of  employment-related  discrimination.  Complaints 
concern  mainly  irregularities  in  employment,  labour  rights  in  general,  dismissal  procedures 
and in the payment of pensions. 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 harassment and discrimination, as required by the 
anti-discrimination legal framework.  

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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  rules  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 slightly increased from 39.1% in 2021 to 
40%  in  2022  for  females,  and  from  66%  to  67.7%  for  men,  resulting  in  a  high  gender 
employment gap of 27.7 percentage points. The gender pay gap remains significant, at around 
25%.  

industrial  policy  strengthens  competitiveness, 

Chapter 20: Enterprise and industrial policy 
facilitates  structural  change  and 
EU 
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. The investment environment remains unsatisfactory.  

The  recommendations  from  last  year  were  partially  implemented,  therefore  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 
licencing 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 supported 
measures  for  businesses  in  the  form  of  subsidies  and  tax  relief,  while  guarantee  funds 
continued operations.  

Regarding  enterprise  and  industrial  policy  principles,  the  Republika  Srpska  entity 
introduced new indicators and improved databases to monitor implementation of its industrial 
development  strategy  and  its  accompanying  action  plan.  Nevertheless,  Bosnia  and 
Herzegovina still lacks a country-wide industrial development strategy and a state-level body 
promoting  consistency  between  industrial  strategies  and  coherence  with  other  related 
policies,  notably  to  encourage  foreign  direct  investment,  improve  the  business  environment 
and SME’s development, and to effectively adapt to the emerging energy crisis and the rising 
prices of production inputs. 

Limited steps were taken to improve the business environment and to attract investments. 
The  Republika  Srpska  entity  adopted  a  decree  on  direct  investments  of  special  importance, 
aiming  to  attract  investors  who  will  provide  better  jobs  and  new  technologies.  New 
administrative  procedures  include  the  option  of  electronic  access  to  registration  documents 
and  e-settlement  of  taxes.  While  electronic  registration  of  businesses  was  launched  in  the 
Republika  Srpska  entity  and  in  Brčko  District,  the  systems  are  not  yet  fully  functional  and 
interoperable  due  to  delays  in  the  issuing  of  e-signatures  and  e-seals.  Although  laws  on 
bankruptcy are in place throughout the country, bankruptcy proceedings are not resolved in a 

105 

 
 
timely manner, with insufficient emphasis on companies’ rehabilitation and reorganisation. 

Despite  these  developments,  the  investment  environment  and  the  level  of  competitiveness 
remain unsatisfactory. Bosnia and Herzegovina still lacks a country-wide 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  government.  Bosnia 
and  Herzegovina  lacks  a  comprehensive  inventory  of  all  administrative  and  technical  steps 
needed  for  domestic  and  foreign  companies  to  register  and  operate,  in  order  to  abolish 
requirements  that  hamper  the  single  economic  space  across  the  country.  Bosnia  and 
Herzegovina has not yet provided for the electronic registration of businesses by all levels of 
government, nor has it improved the connection and coordination of business registers among 
entities  and  with  the  Brčko  District.  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.  

Bosnia and Herzegovina continued to participate in ongoing multi-annual projects funded by 
the previous EU Programme for the competitiveness of enterprises and SMEs (COSME). The 
Association  Agreement  for  participation  of  Bosnia  and  Herzegovina  in  the  Single  Market 
Programme was signed in July 2023.  

Oversight  and  governance  of  public  enterprises  still  need  to  be  strengthened,  including 
actions  to  put  public  companies  on  an  equal  footing  with  other  industrial  enterprises  and  to 
reduce substantial payment arrears. The Republika Srpska still does not have a single register 
of public companies containing all the required information. Oversight and risk management 
units  have  been  established  and  incorporated  respectively  in  the  General  Secretariat  of  the 
Republika Srpska entity government and the entity Ministry of Finance. The Federation entity 
has  a  single  register  of  public  enterprises  and  has  added  comprehensive  non-financial 
information.  However,  no  oversight  and  management  units  have  been  put  in  place  in  the 
Federation entity. 

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. Only 4% of companies rely 
on digitalisation and innovation as a key driver to their business growth.  

Energy diversification is slowly progressing and Bosnia and Herzegovina’s economy is about 
six  times  more  carbon-intensive  than  the  EU  average.  Therefore,  a  greater  focus  on  green 
investments  is  required,  including  actions  at  the  SME  level.  Evidence-based  government 
support  should  also  improve  accountability  for  the  use  of  public  funds  and  ensure  that 
businesses, in particular SMEs, can obtain financing for  the twin transition. 

The innovation performance of  Bosnia and Herzegovina decreased between 2016 and 2022, 
in  contrast  to  increasing  EU  average,  widening  the  gap  in  innovation  performance.  As  the 
2022  Global  Innovation  Index  shows,  Bosnia  and  Herzegovina  produces  less  innovation 
compared to its level of innovation investments. The low-level commercialisation of research 
and development is linked to low public investments in this area and the weak linkages for 
technology transfer and cooperation in clusters (see Chapter 25 – Science and research). 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 

106 

 
 
collaborative  grants.  Amending  the  Law  on  patents  could  improve  both  collaboration  and 
financing  of  innovation  activities  for  higher  value-added  business.  (see  Chapter  7  – 
Intellectual property law) 

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

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

As regards sectoral policies, the Republika Srpska entity adopted its tourism strategy for the 
period  2021-2027  in  January  2022,  while  the  strategy  is  still  pending  adoption  in  the 
Federation entity.  

Chapter 25: Science and research  
The  EU  provides  significant  support  for  research  and  innovation.  All  Member  States  can 
participate  in  the  EU’s  research  and  innovation  programmes  and  benefit  from  them, 
especially  where  there  is  scientific  excellence  and  a  solid  investment  in  research  and 
innovation.  

Bosnia and Herzegovina has some level of preparation in the area of science and research. 
Limited  progress  was  made,  notably  by  developing  a  roadmap  for  research  infrastructure. 
The  country’s  research  capacity  and  innovation  efforts  remain  very  limited.  Overall,  the 
research  and  innovation  gap  with  the  European  Union  is  widening.  The  recommendations 
from last year were only partially implemented, therefore remain valid.  

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

→  develop a new 2023-2028 strategy and action plan for scientific development;  

→  develop and adopt a smart specialisation strategy;  

→  improve reporting on research and innovation statistics. 

On  research  and  innovation  policy,  the  legislative  framework  regulating  research  and 
innovation  development  remains  fragmented  and  still  needs  to  be  improved  throughout  the 
country. No action plan was in place from 2017 till 2023. Bosnia and Herzegovina needs to 
develop and adopt a new strategy and action plan for scientific development (2023-2028). 

The country’s estimated total allocations for research and innovation remain below 0.3% of 
GDP. A substantially increased budget, particularly in the area of innovation, is essential for 
the  country’s  economic  recovery.  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  capacity  remains 
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.  

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 some results. However, systemic 
collaboration  and  interaction  need  to  be  strengthened  between  ‘triple  helix’  actors  – 
academia,  industry  and  governments.  The  development  of  a  smart  specialisation  strategy  is 
still at a very early stage. Its absence hampers research and innovation efforts.  

107 

 
 
As regards international cooperation, Bosnia and Herzegovina takes part in Horizon Europe 
as  an  associated  country,  having  competitively  received  EUR  1.65  million  in  2021. 
Preliminary and partial figures for 2022 show an encouraging increase: so far already EUR 
2.1 million have been gained by researchers and innovators from Bosnia and Herzegovina in 
2022. The selection of Sarajevo for the Horizon Europe Mission on climate-neutral and smart 
cities and its outreach to Mostar is encouraging.  

Bosnia  and  Herzegovina  is  included  in  the  European  Innovation  Scoreboard,  enabling  its 
participation  in  the  European  Institute  of  Innovation  &  Technology’s  Regional  Innovation 
Scheme as of 2025; participation in the activities of the European Institute of Innovation & 
Technology are encouraged. In the scoreboard, Bosnia and Herzegovina was found to be an 
emerging innovator. Over time, its performance relative to the EU has declined, 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 policies 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.  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 should be developed and implemented. Having only been partly addressed, 
the recommendations of last year’s report remain relevant.  

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  studies16  and 

the 

implementation of findings to improve PISA results. 

In the area of education and training, Bosnia and Herzegovina failed to participate in 2021 
PIRLS and 2022 PISA, and has not confirmed participation in 2025 PISA yet. 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  the  absence  of  a  countrywide 
approach,  some  cantons  have  started  reforming  their  curriculum  based  on  student  learning 
outcomes  to  improve  quality  in  line  with  2018  PISA  and  2019  TIMSS  recommendations. 
Bosnia and Herzegovina has, however, decided to join the ICILS 2023, which can help the 
country to monitor its own national targets regarding students’ digital competences and also 

16 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. 

108 

 
 
 
to  provide  information  for  monitoring  progress  toward  the  UN  Sustainable  Development 
Goals. 

Bosnia  and  Herzegovina  was  invited  to  take  part  in  the  European  Education  Area  working 
groups  2021-2025.  These  working  groups  fosters  collaboration  among  European  Union 
Member  States,  as  well  as  with  candidate  countries,  in  order  to  build  more  resilient  and 
inclusive national  education and training systems  and prepare their youth for the green  and 
digital transition. 

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 systematisation of data for Bosnia 
and Herzegovina is in place, there is no mechanism to systematically measure or monitor the 
quality  of  education  inputs,  outputs  or  outcomes.  An  administrative  database  has  been  in 
operation  since  October  2022  to  manage  data  needed  for  reporting  to  international 
institutions. However, data does not feed back into the policy-making process. The education 
system  lacks  common standards  for the different levels  of  education, as  well as for teacher 
training and performance evaluation. Comprehensive teacher training focusing on developing 
students' key competencies should be provided and a systematic approach for application of 
the common core curriculum based on learning outcomes should be established. 

Due  to  demographic  changes,  the  number  of  students  enrolled  at  almost  all  levels  of 
education  is  gradually  declining.  In  early  childhood  education  and  care  (ECEC),  the 
enrolment  rate  remains  very  low  but  with  a  positive  trend  (+16%),  now  standing  at  32%. 
Only 42% of three-to-five year olds are enrolled in pre-school education, and 25% of three-
to-six years old Roma children. Concerning access to primary and secondary education, close 
to 100% of children are attending primary and 85% attending secondary education. Primary 
school  completion  rate  is  92%  (93%  for  boys  and  90%  for  girls).  Among  Roma  children, 
69%  attend  primary  and  23%  secondary  education,  with  a  higher  enrolment  percentage  for 
boys (the attendance of girls is 67% in primary and 18% in secondary education). 

There  has  been  limited  effort  in  supporting  the  digital  transformation  of  education  and 
training, with a lack of a country-wide coordinated approach to the topic, despite the lessons 
of  the  COVID-19  pandemic.  The  country  should  continue  to  strengthen  efforts  towards 
effective, coherent and inclusive digital transformation of the education and training systems, 
including the capacity of the systems to develop digital skills. 

A country-wide policy document on vocational education and training (VET) has been in 
place since 2021, based on the Riga conclusions. However, no noticeable progress followed 
its adoption.  

There  is  no  progress  in  developing  a  national  qualification  framework  for  Bosnia  and 
Herzegovina.  The  related  action  plan  ended  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. Bosnia and Herzegovina’s national qualification framework 
is not yet referenced to the European Qualification Framework, nor is there a mechanism for 
the validation of prior learning. Cooperation between the two accreditation agencies, one at 
state  level  and  one  in  the  Republika  Srpska  entity,  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.  

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Bosnia  and  Herzegovina  benefits  from  the  international  dimension  of  the  2021-2027 
Erasmus+  programme.  In  2022,  around  770  higher  education  staff  members  and  1 070 
students  from  Bosnia  and  Herzegovina  were  selected  to  undertake  a  mobility  period  in  EU 
Member  States  or  asscociated  third  countries  to  the  programme,  while  Bosnian  higher 
education institutions are expected to host around 560 staff members and 490 students from 
Europe.  The  number  of  higher  education  capacity-building  projects  selected  for  funding 
increased  from  8  in  2020  to  12  in  2022.  In  2023,  for  the  first  time,  higher  education 
institutions from Bosnia and Herzegovina were eligible to participate in the call for proposals 
for  the  European  universities  initiative,  with  one  university  winning  a  grant  as  part  of  a 
succesful alliance. 

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. 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.  

Although there are youth strategies at some levels of government, Bosnia and Herzegovina 
should  work  on  a  country-wide  youth  strategy  that  would  ensure  equal  treatment  of  young 
people.  

Chapter 29: Customs union 
All Member States are part of the EU customs union and follow the same customs rules and 
procedures.  This  requires  legislative  alignment  as  well  as  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. There was no progress and last 
year’s recommendations were not implemented. Bosnia and Herzegovina should support the 
Indirect  Taxation  Authority  and  progressively  align  its  systems  with  EU  customs 
requirements.  

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

→  ensure the interoperability of advanced e-signatures on a country-wide basis;  

→  strengthen the administrative and operational capacity of the Indirect Taxation Authority;  

→  increase  post-clearance  checks  based  on  risk  analysis,  expand  use  of  simplified 
interconnectivity  and 

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

The body in charge of implementing customs legislation and policies is the Indirect Taxation 
Authority.  Further  alignment  with  the  Union  Customs  Code  is  needed,  notably  on  customs 
procedures  and  simplified  procedures.  The  2015  Law  on  customs  policy,  partially  aligned 
with the EU acquis, started to be implemented in August 2022 following adoption of the Law 
on  customs  offences.  It  introduced  an  Authorised  Economic  Operators  program  and 
simplified  customs  procedures  requiring  e-signature.  No  company  has  been  recognised  as 
authorised  economic  operator  so  far.  The  customs  tariff  and  valuation  classifications  are 
harmonised  with  the  EU’s  Combined  Nomenclature.  Regarding  rules  of  origin,  the  country 

110 

 
 
continues  to  apply  the  Pan-Euro  Mediterranean  Convention  and  has  begun  the  process  of 
adopting the transitional rules of origin in trade with the EU. 

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  (NCTS),  which  began  operating  at 
the national level in August 2022. It will need to upgrade its NCTS system before it can join 
the Convention.  

Bosnia  and  Herzegovina  should  also  continue  aligning  its  provisions  concerning  customs 
enforcement of intellectual property rights. Further alignment is also needed with the 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,  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.  As  a  result,  customs  authorities  still 
perform 60% of checks physically. 

CLUSTER 4: THE GREEN AGENDA AND SUSTAINABLE CONNECTIVITY  

This  cluster covers Transport (Chapter 14); Energy (Chapter 15); Trans-European networks 
(Chapter 21); and Environment and climate change (Chapter 27).  

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 and energy efficiency still needs to be 
adopted. Bosnia and Herzegovina has some level of preparation in the areas of transport and 
trans-European  networks.  Additional  efforts  are  needed  to  improve  road  safety  to  reduce 
traffic fatalities, and to 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 further acceleration in the upcoming period.  

Chapter 14: Transport policy 
The EU has common rules on 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  no 
progress  achieved.  It  needs  to  intensify  its  efforts  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  with  the  establishment  of  a  lead  Road  Safety  Agency,  as  well  as  enforcement, 
inspection and investigation bodies for road transport, railways, inland waterways, combined 

111 

 
 
/  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 reforms  in  the transport sector 
have been insufficient for several years and the pace of structural adjustment is too slow. The 
necessary  investments  are  being  delayed  by  failure  to  complete  and  approve  technical 
documentation,  by  limited  borrowing  capacity  and  by  financial  constraints.  In  addition,  the 
lack or change of focus on key priorities and lack of coordination and cooperation between 
government levels, especially where particular vested interests prevail, create further delays 
and  overall  inefficiency.  Bosnia  and  Herzegovina  should  intensify  efforts  to  deliver  on  the 
commitments  contained  in  the  Transport  Community  Treaty,  its  five  actions  plans  and 
elements  arising  from  the  smart  and  sustainable  mobility  strategy  for  the  Western  Balkans. 
For  larger  transport  agglomerations,  sustainable  urban  mobility  plans  which  respect 
environmental and social standards, should be developed following EU practice. 

Further  efforts  are  required  to  ensure  full  alignment  with  the  intelligent  transport  systems 
(ITS)  Directive,  improve  multimodality  and  secure  the  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.  

The  country  is  moderately  prepared  for  road  transport.  Bosnia  and  Herzegovina  should 
implement measures agreed in the TCT road safety action plan to develop climate-resilient, 
intelligent  and  resource-efficient  TEN-T  road  networks.  Implementation  of  road  safety 
legislation remains a concern, as there is no visible and substantial decrease in the very high 
number  of  accidents  and  fatalities.  Moreover,  work  is  needed  to  tackle  the  discrepancy 
between the national figure and the significantly higher WHO estimate. There is still a lot to 
do to   develop  a harmonised road crash database system.  The Ministry of Communications 
and Transport still needs to establish a lead road safety agency and a country-wide system for 
the continuous collection of road crash data, as a long-standing point of the TCT road safety 
action plan. Bosnia and Herzegovina needs to adopt, as an outstanding opening issue, a state-
level  law  on  the  international  transport  of  dangerous  goods  by  road.  It  also  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.  Bosnia  and  Herzegovina  has  not  yet  aligned  its 
leglislation with the Directive 2008/96/EC of the European Parliament and of the Council of 
19 November 2008 on road infrastructure safety management. It is highly recommended that 
Bosnia and Herzegovina establish a licensing system for road safety inspectors and auditors 
as well as to adopt the rulebooks for road safety inspections and audits. 

On  rail  transport,  Bosnia  and  Herzegovina  is  moderately  prepared,  but  made  only  limited 
progress  in  the  reporting  period,  mainly  in  developing,  maintaining  and  improving 

112 

 
 
infrastructure; technical documentation for such interventions is under preparation. However, 
half of the railway infrastructure remains unsafe, outdated and unreliable, and cannot enable 
suitable international transit on the network. The country still needs to adopt the multi-annual 
maintenance  plan  for  the  entire  core  network,  as  the  country-wide  coordination  of 
infrastructure  interventions  on  railways  is  degrading.  In  line  with  EU  standards,  and  as 
required by the TCT rail action plan, Bosnia and Herzegovina should use modern ITS 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, in particular in the Republika Srpska entity, although 
design and 50% of grants for reconstruction activities are funded by IPA programmes. 

Bosnia  and  Herzegovina  still  needs  to  fully  align  the  law  on  railways  with  the  fourth  EU 
railway package and to open 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 EU 
acquis  and  still  need  to  be  reviewed.  Another  outstanding  issue  is  the  lack  of  progress  on 
alignment with the acquis on rail passenger rights. Equally, network statements are prepared 
but still not published, and the amendment of the law on railways to enable the establishment 
of independent bodies, namely the railway safety authority and railway accident investigation 
body, is still pending. There was still no progress on negotiating protocols on railway border-
crossing  procedures  with  Croatia,  due  to  technical  concerns  on  border  and  customs-related 
issues. 

On maritime transport Bosnia and Herzegovina remains at an early stage of preparation, as 
this is not considered a priority, since the country has very limited access to the sea and has 
neither  a  commercial  port  nor  a  maritime  fleet.  Institutional  set-up  to  enable  Bosnia  and 
Herzegovina  to  become  a  maritime  shipping  flag  holder  country  would  bring  a  strong 
economic contribution to the economic prosperity of the country. 

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

Preparation  on  civil  aviation  is  still  at  a  standstill.  Although  the  Air  Navigation  Services 
Agency has been operational since December 2019, the 2009 Law on civil aviation still needs 
be  aligned  with  the  requirements  of  the  European  Common  Aviation  Area  Agreement 
(ECAA). Bosnia and Herzegovina urgently needs  to  address  the chronic  lack of adequately 
trained  and  qualified  staff  and  the  institutional  set-up  within  the  Bosnia  and  Herzegovina 
Directorate  of  Civil  Aviation  (BHDCA),  which  increases  the  risks  of  safety  oversight. 
Although  the  new  management  has  been  in  place  for  more  than  2  years,  it  has  not  yet 
addressed this issue. 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.  

Bosnia and Herzegovina should increase efforts to align with and implement  EU passenger 
rights legislation.  

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Chapter 15: Energy 
EU  energy  policy  covers  energy  supply,  infrastructure,  the  internal  energy  market, 
consumers,  renewable  energy,  energy  efficiency,  nuclear  energy,  nuclear  safety,  radiation 
protection and nuclear safeguards.  

The  country  remains  at  an  early  stage  of  preparation  in  the  area  of  energy.  Limited 
progress was made with the adoption of the law on electricity, the law on energy and the law 
on renewable  energy   in  the Federation entity.  Bosnia and Herzegovina still needs to  make 
significant efforts to strengthen country-wide cooperation and coordination and improve the 
fragmented  and 
framework.  Last  year’s 
regulatory 
recommendations have not been implemented and remain valid.  

legislative  and 

inconsistent 

→  In  the  coming  year,  Bosnia  and  Herzegovina  should  in  particular:  adopt  gas  and 
electricity laws and bylaws, in compliance with the third energy package and the Energy 
Community  Electricity Integration 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 delays in 
coupling with the EU internal electricity market; 

→  adopt  state-  and  improve  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; and  

→  finalise and adopt the national energy and climate plan (NECP) 2021-2030 by the end of 
June 2024, in  line with  the Energy Community 2030 energy  and climate  targets,  taking 
due account of recommendations issued by the Energy Community Secretariat. 

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  still  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. A decision for an extension of the Tuzla coal-fired power plant (Block 7) is still 
pending.  This  may  increase  the  country’s  security  of  supply,  but  might  also  significantly 
prolong  dependency  on  coal  which  is  not  in  line  with  the  country’s  commitments  to 
decarbonisation.  An  important  supplier  has  stepped  out  of  the  Tuzla  Block  7  contract. 
Although  the  Chinese  consortium  proposed  to  replace  the  contractor,  the  Federation  entity 
did  not  agree  to  this.  A  final  decision  will  have  to  be  taken  by  the  Federation  entity’s 
Parliament. The State Aid Council is yet to decide on the public guarantee granted in favour 
of the Export-Import Bank of China for a loan for Tuzla 7.  

After the Federation’s entity Parliament took the decision to extend the lifetime of two units 
of  the  Kakanj  and  Tuzla  power  plants,  the  Energy  Community  Secretariat  opened  an 
infringement procedure against Bosnia and Herzegovina in October 2022. 

Bosnia  and  Herzegovina  has  not  yet  taken  any  actions  towards  gradually  phasing  out  coal 
subsidies, although the country is considering how to align with the EU Emissions Trading 
System (ETS) to promote decarbonization.  This will be particularly challenging for a country 
whose energy production and industry largely depend on fossil fuels. The appointment of the 
management of Transco is still pending.  

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Bosnia and Herzegovina needs to align with and implement the risk-preparedness regulation 
to increase resilience in the event of another energy crisis. 

Regarding security of supply for natural gas, although only 3% of the energy supply comes 
from  gas,  the  country  is  fully  dependent  on  one  gas  pipeline  which  supplies  gas  through 
Turkish  Stream,  from  Russia  as  its  single  source,  rendering  Bosnia  and  Herzegovina 
vulnerable in case of disruption. Both the Federation entity and Republika Srpska entity have 
a long-term contract with Gazprom. 

The Federation entity should accelerate the adoption of the law and permit procedures on the 
Southern Gas Interconnector project, one of the flagship projects of the EU’s Economic and 
Investment  Plan,  that  will  contribute  to  strengthening  the  integration  into  the  European  gas 
market and increasing the security of supply. Proposals for a new Eastern Gas Interconnector, 
to be funded by Gazprom, would not contribute to the diversification of gas supply. Decisions 
on both interconnectors need to be approved by the Presidency. 

The  former  refinery  in  Brod  that  was  connected  to  Croatia’s  natural  gas  network  in  2021 
without the required state-level approval remains in breach of the legal framework.  

There was still no progress in the harmonisation of legislation on compulsory oil stocks and 
petroleum products. The development of the necessary legislation, establishment of a body at 
state level on compulsory oil stocks  and harmonisation of legislation at entity level are still 
pending. 

To prevent further delays in the opening and unbundling of energy markets and comply with 
the third and fourth energy package, Bosnia and Herzegovina still needs to adopt outstanding 
gas and electricity legislation, including alignment and implementation of the newly adopted 
Energy  Community  Electricity  Integration  Package.  Some  progress  was  made  in  the 
Federation  entity  with  the  adoption  of  the  Law  on  electricity  and  the  Law  on  energy.  The 
country  needs  to  adopt  state-level  legislation  on  electricity  to  enable  electricity  market 
coupling, appointment of the nominated electricity  market  operator (NEMO), establishment 
of  the  power  exchange,  and  day-ahead  and  intra-day  markets  as  a  precondition  to  further 
integrate with the EU internal market, including market coupling. The entity-level laws will 
need to be fully harmonised with this legal framework. 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.   

On  retail  market,  the  electricity  markets  in  both  entities  are  formally  open  to  competition. 
Introduction  of  the  virtual  power  plant  model  in  April  2022  has  enabled  small-scale 
renewable  energy  sources  to  reach  wholesale  markets  via  aggregation  and  most  renewable 
energy producers stepped out  of the support schemes in  both  entities.  Regulated prices  and 
tariffs do not reflect costs, as the energy sector is subsidised by direct and indirect subsidies.  

Some measures protecting energy-vulnerable groups and mitigating energy poverty remain in 
place,  focusing  solely  on  direct  financial  support  and  only  targeting  the  most  vulnerable 
groups, notably recipients of various social welfare benefits.  

Gas customers in the Federation entity are still captive. In the Republika Srpska entity, only a 
small  portion  of  the  gas  market  is  supplied  under  regulated  tariffs.  Switching  rules  are  in 
place. On the wholesale market, gas prices are not regulated in the  Republika Srpska entity. 
In  the  Federation  entity,  the  prices  are  regulated  by  the  Ministry.  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  gas  market  remains  closed  without  adequate  regulatory  oversight  and  lacks 

115 

 
 
transparency,  particularly  regarding  setting  prices  for  end  consumers.  For  electricity,  the 
regulatory  authorities  at  all  levels  are  operational,  but  their  independence  continues  to  be 
hampered by political interference.  

On hydrocarbons, the country has yet to align the legislative framework with the EU acquis, 
including the Directive on the safety of offshore oil and gas installations. 

There has been some progress on renewable energy as the Federation entity adopted the law 
on renewable energy and both entities are currently working on secondary legislation; a state-
level legal framework is still lacking. Both  entities need to launch  renewable energy support 
scheme  auctions.  In  June,  the  Republika  Srpska  entity  signed  a  direct  agreement  with  the 
service provider to use electronic registers for issuance, cancellation and trade of guarantees 
of origin; the Federation entity is expected to do the same at the end of the year. 

There  are  no  limits  on  the  maximum  power  which  can  be  integrated  into  transmission 
electricity from non-dispatchable renewable energy sources. Despite large capacity, there are 
only  three  wind  parks  in  place  and  an  increasing  number  of  solar  PV  plants.  Hydropower 
planning  continues  to  be  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 still not consistently 
prepared and lead to protests and challenges in court, such as on the Buk Bijela hydropower 
plant (see Chapter 27 – Environment and climate change). 

Further alignment with EU standards is still required 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. 

On  energy  efficiency,  no  progress  has  been  made  in  harmonising  the  legislation  with  EU 
requirements.  

Bosnia  and  Herzegovina  made  no  further  progress  on  nuclear  energy,  nuclear  safety  and 
radiation protection. The country has no nuclear sites on its territory, nor does it have plans 
to  build  any.  The  country  should  still  consider  becoming  a  member  of  the  European 
Community  Urgent  Radiological  Information  Exchange  system  (ECURIE).  Bosnia  and 
Herzegovina should  also 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.  

On nuclear safeguards, upon accession, the existing systems of accountancy and control of 
nuclear materials in Bosnia and Herzegovina would need to be adapted to accommodate for 
the safeguard provisions (chapter 7) of the Euratom Treaty. 

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 

(TENs) 

in 

Bosnia and Herzegovina has  some level of preparation in trans-European networks. There 
was  limited  progress  in  the  area,  with  the  continuation  of  the  Corridor  Vc  motorway 
116 

 
 
  
development. However, transport and energy infrastructures remain insufficiently developed 
and  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 Balkans, 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 multi-annual maintenance plans for the entire road and rail core networks;  

→  align the legislation with Regulation (EU) N° 347/2013 on guidelines for trans-European 

energy infrastructure. 

On transport networks, Bosnia and Herzegovina participates in the Transport Community 
meetings,  however,  the  country  should  increase  efforts  and  resources  to  deliver  on  the 
obligations contained in the Transport Community Treaty action plans.  

Bosnia  and  Herzegovina  should  accelerate  the  implementation  of  connectivity  reform 
measures and aim to continue with the adoption of the multi-annual 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.  

In May 2023, Bosnia and Herzegovina signed a high-level agreement with the Commission to 
adapt  the  TEN-T  network.  Priority  connectivity  projects  on  the  indicative  TEN-T  core 
network to the Western Balkans have been planned through the single project pipeline. The 
preparation  and  implementation  of  these  projects  continued  during  the  reporting  period.  In 
relation  to  the Corridor Vc motorway, works on the Medakovo-Ozimice subsection started, 
while  90%  of  works  were  completed  for  the  subsection  Ponirak  Vraca-Zenica  tunnel  in 
September 2023. Bosnia and Herzegovina and Croatia still need to agree on the category of 
the  Svilaj  border  crossing.  Efforts  are  still  necessary  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  has  taken  no 
decision on the issue yet and will assess when the time is ripe to to proceed with the signature 
of the contribution agreements.  

Although  the  construction  of  the  interstate  bridge  between  Bosnia  and  Herzegovina  and 
Croatia at  Gradiška was  completed in May 2022,the border crossing is expected to become 
operational  in  2023  upon  completion  of  the  access  expressway  on  Croatian  territory. 
Technical  documentation  and  tender  dossiers  for  Route  2b  of  the  comprehensive  road 
network and Banja Luka-Lašva and the main design for the Route 2a core network have been 
finalised. Conceptual design for railway route 9a Tuzla-Zvornik and technical documentation 
and  tender  dossiers  for  Corridor  Vc  sections  Sarajevo-Doboj  and  Visoko-Konjic  have  been 
finalised,  but  not  endorsed  yet  by  the  final  beneficiary.  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  still  requires  further  demining  and 
rehabilitation. Work on the rehabilitation of the Brčko Port is progressing. .  

On energy networks, Bosnia and Herzegovina has not made any progress in aligning with 
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Regulation (EU) No 347/2013 on guidelines for trans-European energy infrastructure in the 
reporting  period,  so  the  infringement  established  by  the  Energy  Community  in  November 
2018has still not been rectified.  

Bosnia and Herzegovina should finalise the single project pipeline to also include the energy 
sector;  this  will  ensure  the  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 rules contain provisions addressing climate change, water and air quality, 
waste  management,  nature  protection,  industrial  pollution,  chemicals,  noise  and  civil 
protection. 

Bosnia and Herzegovina is in between an early stage and some level of preparation in the 
area of environment and climate change. Limited progress was made with the adoption of a 
national  adaptation  plan  and  a  national  climate-change  adaptation  and  low-emission 
development  strategy.  To  align  with  the  EU  climate  acquis  and  implement  and  enforce  it, 
Bosnia  and  Herzegovina  still  needs  to  reaffirm  its  political  commitment  and  set  up  the 
necessary  administrative  capacity  at  all  levels  of  government.  It  needs  to  ensure  an  even, 
country-wide  harmonised  and  consistent  approach  in  strategic  planning  and  alignment  with 
the  EU  acquis,  in  particular  in  the  field  of  air  quality,  industrial  emissions  and  water  and 
waste  management.  In  May  2023,  Bosnia  and  Herzegovina  ratified  the  agreement  on  its 
membership in the Union Civil Protection Mechanism (UCPM), showing its capacity to bring 
together the relevant decision making structures.  Bosnia and Herzegovina needs to continue 
working  to  further  improve  its  national  civil  protection  system  and  especially  that 
international  assistance  is  provided  in  a  coordinated  manner  at  national  level.  The 
recommendations from last year were not fully addressed and remain valid. 

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

→  implement  the  country-wide  environmental  approximation  strategy  and  adopt  an 
environmental protection strategy, and provide for a consistent and uniform application of 
environmental acquis across the country;  

→  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), implement the revised 
climate-change  adaptation  and  low-emissions  development  strategy,  adopt  an  integrated 
national  energy  and  climate  plan  (NECP),  and  urgently  prepare  alignment  with  the  EU 
Emissions Trading System (ETS) in line with the Energy Community requirements. 

Environment  

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Horizontal legislation is aligned with the EU acquis to a limited extent.  The willingness to 
act  and  capacity  to  ensure  country-wide  harmonisation  with  the  EU  acquis  continues  to  be 
limited,  leaving  the  environment  sector  unevenly  regulated  across  the  country.  The 
environment  approximation  strategy  still  needs  to  be  fully  harmonised  and  implemented, 
requiring a single integrated action plan. Bosnia and Herzegovina still needs to  enhance the 
legal  framework,  strengthen  administrative  capacity  and  monitoring  systems,  implement 
structural  reforms,  and  improve  inter-institutional  coordination,  in  line  with  the  Green 
Agenda  for  the  Western  Balkans  and  the  2050  climate  neutrality  target.  Bosnia  and 
Herzegovina  still  needs  to  adopt  a  country-wide  environmental  protection  strategy  and  to 
align the provisions of Environmental Impact Assessment (EIA) and Strategic Environmental 
Assessment (SEA) in the legislation at all levels of government and across relevant sectors. 
The  provisions  need  to  be  considerably  strengthened  and  enforced,  and  the  necessary 
improvements need to be made on access to information and the participation of the public in 
the decision-making process. Bosnia and Herzegovina needs to implement the provisions of 
Espoo  convention  concerning  planned  investments  in  the  transboundary  context  (see  also 
Chapter  15  -  Energy).  A  strategy  and  functioning  structure  for  gathering,  transferring  and 
reporting  environmental  data  still  needs  to  be  adopted.  The  legal  framework  regulating 
environmental  inspections  and  their  enforcement  needs  to  be  improved  in  line  with  the  EU 
acquis.  Stricter  control  of  pollutants  and  polluter-pays  principle  have  to  be  put  in  place. 
Alignmentwith  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  pending.  The  long-overdue  requirement  for 
formalising  the  procedure  for  the  appointment  of  national  focal  points  concerning  the 
implementation of environmental conventions to which the country is a signatory party, has 
yet to be met.  

Alignment  with  the  acquis  on air quality  did  not  progress.  A well-functioning  harmonised 
air monitoring network still needs to be established to be able to provide reliable data, and a 
programme  for  air-quality  improvement  needs  to  be  developed.  Alignment  with  the  EU 
Directive  on  the  reduction  of  national  emissions  of  certain  atmospheric  pollutants, 
establishment of 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  acquis  on  reducing  the  sulphur  content  of  certain  liquid  fuels,  on  which  penalties  have 
been  applied  since  January  2021.  Alignment  with  acquis  on  volatile  organic  compounds 
(VOC) is lagging behind.  

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

On  water  quality,  a  consistent  and  harmonised  country-wide  strategy  and  sustainable 
investment plan on water management and urban wastewater management is are still missing. 
Specific  plans  for  implementing  EU  legislation  on  drinking  water,  urban  wastewater  and 
flood  risk  management  still  need  to  be  adopted.  A  countrywide  roof  report  for  Bosnia  and 
Herzegovina on river basin management plans still needs to be adopted, as well as a revised 

119 

 
 
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 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  the  nature  acquis 
(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 trade 
in  endangered  species  of  wild  fauna  and  flora  (CITES),  full  implementation  of  the 
Convention 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. 

There is no progress on alignment with the 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  the  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  the 
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  still  needed.  Alignment  with  the  acquis  on  asbestos  and  on  the  protection  of 
animals  used  for  scientific  purposes  is  also  lagging  behind.  Bosnia  and  Herzegovina  still 
needs to implement the Rotterdam Convention on the prior informed consent procedure for 
certain hazardous chemicals and pesticides in international trade, to which it is a party. There 
has been no progress in acceding to the Minamata Convention. 

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

In recent years Bosnia and Herzegovina made significant progress in building the capacity of 
its civil protection system at local and entity levels. In May 2023, Bosnia and Herzegovina 
ratified the agreement on its membership in  the Union Civil Protection Mechanism (UCPM). 
As  a  participating  state  of  the  UCPM,  Bosnia  and  Herzegovina  is  expected  to  actively 
participate in activities under the mechanism and  ensure, when necessary, that international 
assistance is provided in a coordinated manner at national level. A positive development of 
the  coordination  at  the  national  level  was  demonstrated  when  Bosnia  and  Herzegovina 
offered  assistance  to  Slovenia  via  the  UCPM  in  response  to  floods  in  August  2023.  The 
country needs to proceed with establishing Trans-European Services for Telematics between 
Administrations  (TESTA)  as  a  precondition  to  be  connected  to  the  Common  Emergency 
Communication and Information System (CECIS), improve legislation for preparedness and 
response,  and  strengthen  governance.  Bosnia  and  Herzegovina  still  needs  to  speed  up  the 
implementation  of the 2020-2025 action plan  on civil  protection. A comprehensive training 
programme  for  emergency  response  units  still  needs  to  be  developed  and  systematic 
inspections  ensured.  Bosnia  and  Herzegovina  still  needs  to  make  additional  efforts  to 
establish the 112 European single emergency number, also adopting the necessary legal basis.  
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Climate change 

The level of alignment with the EU climate acquis remains limited. Bosnia and Herzegovina 
still needs to adopt a country-wide climate strategy to align with the new EU climate acquis 
as per the important modifications brought in by the Fit for 55 package, and develop a state-
level  framework  law  on  climate  change.  In  line  with  the  Green  Agenda,  Bosnia  and 
Herzegovina is urged to take the necessary steps to prepare alignment with the EU Emissions 
Trading System (ETS) to advance the implementation of the EU acquis, prioritise alignment 
with  the  new  governance  regulation,  and  adequately  prepare  for  the  EU  Carbon  Border 
Adjustment Mechanism, that enters into force in its transitional phase as of 1 October 2023. 
In  October  2022,  Bosnia  and  Herzegovina  adopted  the  national  adaptation  plan  with 
measures until 2030 and submitted it to the UN Framework Convention on Climate Change 
(UNFCCC)  secretariat;  it  also  published  a  national  climate  change  adaptation  and  low 
emission  development  strategy  consistent  with  the  EU 2030  framework  on  climate  and 
energy policies. Both will need to be implemented. Bosnia and Herzegovina needs to finalise 
and adopt the 2021-2030 national energy and climate plan (NECP) by the end of June 2024 
(See  Chapter  15  –  Energy).  The  country  still  needs  to  significantly  reinforce  its 
administrative  and  inspection  capacities  in  the  sector  and  structural  reforms  need  to  be 
implemented 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 UNFCCC. It plans to 
reduce  greenhouse  gas  emissions  by  slightly  more  than  one  third  by  2030  and  almost  two 
thirds  by  2050  compared  with  1990.  There  has  been  no  progress  in  aligning  with  the  EU 
monitoring  and  reporting  regulation.  There  is  still  no  national  greenhouse  gas  emissions 
inventory  system  or  accompanying  state-level  legal  regulatory  framework.  No  progress  has 
been  made  in  aligning  with  the  directives  on  fuel  quality,  ozone  depleting  substances, 
fluorinated  gases,  carbon  capture  and  storage  or  on  other  relevant  legislation.  Following 
ratification of the Kigali amendment to the Montreal Protocol on substances that deplete the 
ozone 
freeze 
required 
hydrofluorocarbon production and use in 2024, with an 80% reduction by 2045.  

in  2021,  Bosnia  and  Herzegovina 

is  urgently 

layer 

to 

CLUSTER 5: RESOURCES, AGRICULTURE AND COHESION  

This  cluster covers: agriculture and rural  development (Chapter 11); food safety,  veterinary 
and  phytosanitary  policy  (Chapter  12);  fisheries  and  aquaculture  (Chapter  13);  regional 
policy  &  coordination  of  structural  instruments  (Chapter  22);  and  financial  &  budgetary 
provisions (Chapter 33).  

While  implementing  the  2018-2021  strategic  plan  for  rural  development,  Bosnia  and 
Herzegovina  must  step  up  its  efforts  to  adopt  a  post-2021  country-wide  strategy  for  rural 
development  and  start  implementing  agricultural  reforms  in  order  to  reduce  the  number  of 
small  and  ineffective  farms  as  well  as  fragmentation  of  agricultural  land.  The  Parliament 
adopted a state-level Law on the organisation of the wine market in August 2023. It has yet to 
adopt a state-level law on organic production and harmonise across the country the legislation 
on quality policy. It needs to align the legislation on food safety, veterinary and phytosanitary 
policy  and  strengthen  its  administrative  capacity;  in  particular,  it  should  speed  up 
preparations  for  national  reference  laboratories,  implement  an  updated  national  salmonella 
control plan and maintain vaccination against rabies and brucellosis. Bosnia and Herzegovina 
must  step  up  its  efforts  to  prepare  and  adopt  a  country-wide  strategy  on  fisheries  and 
aquaculture and harmonise data collection. It should start preparing a country-wide regional 

121 

 
 
 
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  implement 
customs  legislation  effectively,  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 EU’s common agricultural policy supports farmers and ensures Europe’s food security. 
It  helps  tackle  climate  change  and  the  sustainable  management  of  national  resources; 
maintains rural areas and landscapes across the EU; and keeps the rural economy alive by 
promoting jobs in farming, agri-food industries and associated sectors. This requires strong 
management and control systems. There are also common EU rules for marketing standards, 
quality policy and organic farming.  

limited  progress 

Bosnia  and  Herzegovina  is  at  an  early  stage  of  preparation  in  the  area  of  agriculture  and 
last  year’s 
rural  development.  There  was 
recommendations, with the adoption of a state-level Law on the wine market, for which the 
related by-laws now need to be adopted. 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 state-level strategic plan; it still needs to adopt a state-level law 
on  organic  production  and  to  update  the  legislation  on  quality  policy,  in  line  with  the  EU 
acquis. The 2022 recommendations remain broadly valid.  

implementing 

in 

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 across the country and aligning with the EU acquis  and  adopt 
a country-wide strategy for agriculture and rural development for 2022-2027; 

→  adopt  a  state-level  law  on  organic  production  and  all  the  required  by-laws  for  the 
implementation  of the Law on the organisation  of the wine market,  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).  Bosnia  and  Herzegovina  needs  to 
improve  sector  coordination  and  strengthen  administrative  capacity  at  all  levels  of 
government.  For the country to  benefit from  the instrument  for pre-accession  assistance for 
rural  development  (IPARD),  the  authorities  need  to  set  up  the  necessary  institutional 
structures.  Direct  payments  still  need  to  be  aligned  with  the  EU  acquis.  Bosnia  and 
Herzegovina 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  Parliament  adopteda 
state-level Law on the organisation of the wine market, for which all required by-laws now 
need to be adopted for it to start being applied. The setting up of a register of grapes and wine 
producers and of a vineyard register is still pending.  

Bosnia and Herzegovina made no progress in harmonising rural development programmes 
and  support  measures.  The  relevant  levels  of  government  should  address  it  in  their  policy 
implementation.  

122 

 
 
Reporting  on  the  implementation  of  the  2018-2021  strategic  plan  for  rural  development  is 
lacking,  as  the  last  report  available  is  from  2018.  The  system  of  data  collection  and 
processing for planning agricultural and rural development policies and its implementation as 
well as monitoring and reporting needs to substantially improve. A 2022-2027 country-wide 
strategic plan for agriculture and rural development still needs to be adopted.  

No  progress  was  noted  on  quality  policy.  The  legal  framework  still  needs  to  be  improved 
and harmonised with the relevant EU acquis and  a clear distribution of competences in this 
area is needed.  

There was no progress on organic farming. The state-level law still needs to be developed in 
line  with  the  EU  acquis  and  the  regulatory  framework  harmonised  across  all  levels  of 
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,  the  protection  against  harmful  organisms  and  animal 
nutrition.  

Bosnia and Herzegovina has some level of preparation in this area. No progress was made 
over  the  reporting  period.  Significant  work  is  still  necessary  to  align  with  the  EU  acquis, 
particularly  as  regards  official  checks,  animal  health  and  plant  health.  The  administrative 
capacity of laboratories  has yet to be strengthened and official checks need to be bolstered. 
To ensure alignment with the EU acquis, the country’s central databases and animal registers 
require further improvements. The Commission’s recommendations from last year were not 
met, therefore they remain valid. 

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

→  introduce  inter-laboratory  comparative  test  system  as  a  regular  practice,  particularly 
between  laboratories  in  charge  of  the  analysis  of  samples  for  notifiable  diseases,  to 
increase  checks  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 inspections, food and feedstuff analysis; 

→  improve the action plan for reliable certification of the necessary animal health statements 

contained in the certificate for the export of fresh meat to the EU market;  

In the area of general food safety, food safety rules and specific rules for feed, no progress 
was made in improving the current system to fulfil the public and animal health requirements 
for  the  export  of  bovine,  ovine  and  caprine  meat.  This  means  the  authorities  still  cannot 
reliably  certify  the  necessary  animal  health  statements  contained  in  the  certificate  for  the 
export  of  fresh  meat  and  meat  products  to  the  EU  market.  The  database  for  animals  and 
official  checks  is  not  fully  reliable,  and  the  surveillance  programme  for  relevant  notifiable 
diseases  is  very  limited.  Official  laboratories  lack  the  necessary  capacity  and  are  not 
accredited for methods to detect foot and mouth disease. Bosnia and Herzegovina prepared its 
action  plan  aiming  to  respond  to  the  inefficiencies  identified,  but  these  have  not  yet  been 
addressed.  

Further  work  is  still  needed  to  improve  the  official  control  system  in  Bosnia  and 
Herzegovina, notably for the registration of farm holdings and the deregistration of holdings 

123 

 
 
that  are  no  longer  active,  plus  to  ensure  the  reliability  of  livestock  numbers  and  species 
present  on  active  holdings.  Substantial  work  is  also  required  to  ensure  the  reliability  of 
information in the central database for animal identification. Alignment has yet to be ensured 
for  the  surveillance  of  notifiable  diseases,  particularly  when  it  comes  to  an  early  detection 
system and the awareness-raising of farmers. The inter-laboratory comparative test system in 
Bosnia  and  Herzegovina  is  still  not  set  up,  so  not  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 fully implement the EU acquis in this area, the setting up of national 
reference  laboratories  for  food  and  feed  needs  to  be  stepped  up;  hygiene,  veterinary  and 
phytosanitary checks need to be improved; and the accreditation of laboratory methods used 
for these checks needs to be accelerated. Bosnia and Herzegovina has not yet met the criteria 
for the export of table eggs to the EU and its updated national salmonella control plan is not 
yet fully implemented. No progress was made on setting up its flock register, nor in ensuring 
the availability and completeness of data to ensure accurate reporting, in particular regarding 
prevalence and incidence. 

Bosnia and Herzegovina’s alignment with the EU acquis remains low, notably on the state-
level  laws  on  food  (2004)  and  veterinary  medicine  (2002).  A  state-level  law  on  official 
checks has not yet been prepared or adopted, and both the law on animal health and the law 
on  animal  welfare  have  yet  to  be  updated.  Further  work  is  still  necessary  to  implement 
effectively and harmonise the legislation at all levels of governance, particularly the hygiene 
package. 

Bosnia and Herzegovina continued to monitor pesticide residues in and on food of plant and 
animal  origin.  The system  for recognition  of mineral  and spring waters  as well as for table 
waters was improved and the state register of these waters was updated. 

No  progress  was  made  on  veterinary  policy  and  substantial  work  is  still  necessary  on  the 
control,  prevention  and  eradication  of  communicable  animal  diseases.  Significant  work  is 
required to improve monitoring and surveillance of brucellosis and  rabies, which is  not  yet 
considered  eradicated  in  Bosnia  and  Herzegovina  as  well  as  to  improve  coordination  of 
managing the outbreak of African swine fever.   

The  country’s  system  of  managing  animal  disease  notification  and  outbreak  information  is 
not yet aligned with the EU acquis; nor are the central animal identification and registration 
systems  for  sheep,  goats,  pigs  and  horses.  While  Bosnia  and  Herzegovina  obtained 
permission to export fishery products to the EU market, there continue to be concerns about 
the monitoring of residues and contaminants in live animals and animal products, including 
inspections of veterinary medicinal products.    

No progress was made concerning the placing on the market of food, feed and animal by-
products. Bosnia and Herzegovina’s food and feed control system is not yet aligned with the 
EU acquis and further structural and administrative work is still necessary at all levels of the 
government,  particularly  concerning  inspection  services  and  laboratories,  for  which  inter-
laboratory comparative tests have still not been introduced.  

In  the  area  of  phytosanitary  policy,  to  align  with  the  EU  acquis,  reforms  are  still  needed. 
Key  state-level  laws,  notably  the  new  plant  health  law  and  a  state-level  law  on  official 
checks,  have  not  been  adopted.  While  the  implementation  of  the  programme  for  special 
surveillance  of  quarantine  pests  for  potatoes  continued,  as  well  as  the  registration  of  plant 
operators  and  varieties  in  a  single  phyto-registry,  no  progress  was  made  on  issuing  plant 
passports and nor were the OECD seed schemes adopted. The country has not yet fulfilled the 
EU  acquis  requirements  of  setting  up  its  laboratories  as  reference  laboratories  providing 

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phyto-sanitary  checks.  The  principles  of  integrated  pest  management  have  yet  to  be 
implemented in a harmonised manner.  

No progress was made in the area of genetically modified organisms (GMOs), on which the 
level  of  alignment  with  the  EU  acquis  remains  low.  Inspection  services  at  all  levels  of  the 
government  are  still  insufficient  and  no  progress  was  made  in  setting  up  the  country’s 
reference  laboratory  for  testing,  controlling  and  monitoring  the  presence  of  GMOs  in  food 
and feed.  

Chapter 13: Fisheries and aquaculture 
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 control and inspection, rules on markets and 
aquaculture  and  support  for  fisheries  and  coastal  communities.  Further,  it  promotes  a 
sustainable aquaculture.   

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 country-wide fisheries 
and acquaculture strategy in line with EU acquis. As the recommendations of 2022 were not 
implemented, they remain valid.  

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

→  prepare  and  adopt  a  country-wide  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  and  aquaculture 

products across the country and establish relevant statistics. 

There  was  no  progress  in  developing  a  country-wide  policy  framework  and  legislation  on 
inland  and  marine  fisheries  to  prepare  for  the  EU’s  common  fishery  policy  (CFP). 
Preparation  and  adoption  of  a  country-wide  strategy  and  state-level  legislation  on  fisheries 
and aquaculture should be stepped up and country-wide harmonisation ensured.  

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

No  progress  was  made  in  setting  up  relevant  measures  and  strengthening  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 fisheries 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.  Bosnia  and 
Herzegovina still lacks any structural and State aid measure in line with the EU acquis.  

Concerning market policy, marketing standards for certain fishery and aquaculture products 
are  in  place,  but  there  was  no  further  progress  including  on  the  framework  to  recognise  s 
producer organisations in line with the EU acquis.  

Regarding  international  agreements,  Bosnia  and  Herzegovina  continues  to  cooperate  on  
fisheries with the General Fisheries Commission for the Mediterranean (GFCM), of which it 
is  a  cooperating  non-contracting  party  and  the  UN’s  Food  and  Agriculture  Organisation 
(FAO). As a party to the Malta MedFish4Ever Declaration, Bosnia and Herzegovina should 
contribute to its effective implementation. 

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Bosnia  and  Herzegovina  is  encouraged  to  promote  regional  cooperation  with  partner 
countries. 

Chapter 22: Regional policy and coordination of structural instruments  
Regional  policy  is  the  EU’s  main  tool  for  reducing  regional  disparities  and  investing  in 
sustainable  and  inclusive  socio-economic  growth.  It  is  operating  through  “shared 
management”  between  the  Commission  and  EU  Member  States.  The  implementation  of 
cohesion  policy  programmes  requires  appropriate  administrative  capacity  on  programme 
and project level, the establisment of systems of sound financial management and control and 
also the fulfilment of other EU acquis elements such as environmental or public procurement 
legislation. 

Bosnia  and  Herzegovina  remains  at  an  early  stage  of  preparation  in  the  area  of  regional 
policy  and  coordination  of  structural  instruments.  No  progress  was  made  during  the 
reporting  period.  Although  the  IPA  III  Framework  Partnership  Agreement  (FFPA)  was 
ratified in  August  2022,  the obligation to  appoint a National  IPA Coordinator (NIPAC) for 
IPA  III  has  not  been  met.  Last  year’s  recommendations  were  not  implemented  and  remain 
valid.  

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

→  prepare a country-wide regional development strategy; 

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

→  urgently appoint a National IPA Coordinator (NIPAC) for IPA III and reach an agreement 
on coordination procedures 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 the legislative framework, Bosnia and Herzegovina still needs to establish a system for 
managing  EU  structural  funds.  It  still  lacks  a  number  of  country-wide  strategies  in  fields 
relevant  to  cohesion  policy.  There  is  no  sound  country-wide  regional  development  policy 
with  accompanying  institutional  structure  and  performance  monitoring  framework.  The 
NUTS II regions are only provisionally defined and accepted by the 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 a 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 IPA planning, the IPA III FFPA was ratified in 
August  2022.  In  order  for  IPA  funding  to  continue,  Bosnia  and  Herzegovina  needs  to 
urgently appoint a National IPA Coordinator (NIPAC) for IPA III, in line with the FFPA. The 
authorities  need  to  agree  on  coordination  procedures  for  the  effective  use  of  pre-accession 
funds  while  respecting  the  role  of  the  NIPAC.  The  role  of  the  NIPAC  also  needs  to  be 
strengthened. 

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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  strengthen  administrative  capacity  to  implement  EU  regional 
policy.  

Difficulties  persist  as  a  result  of  lack  of  agreement  on  how  to  reconcile  the  IPA  legal 
framework with the system of coordination of European integration.  

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

to  gain  experience 

the  programming  and 
Bosnia  and  Herzegovina  continues 
implementation  of  regional  policy  territorial  cooperation  through  cross-border  cooperation 
and transnational  and interregional  cooperation programmes.   Bosnia and Herzegovina also 
participates  in  two  macro-regional  strategies  for  the  Adriatic  and  Ionian  region  and  for  the 
Danube  region, which promote cooperation and synergies among participating EU and non-
EU countries.  

in 

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

With the exception of cross-border cooperation programmes, Bosnia and Herzegovina is still 
lacking  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 FFPA 
still need to be established. 

Chapter 33: Financial and 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  on  strengthening  administrative  capacity  for 
coordination  and  management  of  own  resources.  Significant  further  efforts  are  needed  to 
ensure  sound  capacity,  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 capacity and inter-agency cooperation to combat tax and customs fraud; 

→  bolster 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 no progress in improving the capacity of ITA and in implementing an accounting 
system  for customs duties to  distinguish between recovered debts  and outstanding  debts,  in 
line with the EU’s traditional own resources accounting. There was no progress in aligning 
the VAT law with the EU acquis, in particular as regards special schemes and exceptions. 

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On  gross  national  income  (GNI)  resource,  the  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 still needs 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 monitoring of own resources.  

CLUSTER 6: EXTERNAL RELATIONS  

This  cluster  covers:  external  relations  (Chapter  30);  foreign,  security  and  defence  policy 
(Chapter 31).  

Bosnia and Herzegovina should implement the action plan for the Common Regional Market 
by  adopting  and  implementing  the  relevant  protocols  to  the  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 strengthen arms control and monitoring regimes. 

Chapter 30: External relations 
The EU has a common commercial policy towards third countries, based on multilateral and 
bilateral  agreements  and  autonomous  measures.  There  are  also  EU  rules  on  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 has 
yet  to  be  strengthened.  Bosnia  and  Herzegovina  again  introduced  temporary  export 
restrictions  in  May  2023  on  certain  wood  products.  These  decisions  should  be  revoked 
without  delay,  and  Bosnia  and  Herzegovina  should  abstain  from  taking  further  unilateral 
trade measures without valid justification and prior consultation with the Commission in line 
with  its obligations under the SAA. The Commission’s recommendations  of 2022 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  2021-2024  Common  Regional  Market  action  plan,  in  particular  by 
implementing CEFTA Additional Protocol (AP) 5 on trade facilitation and CEFTA AP 6 
on trade in services, and negotiate and ensure 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, 
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 

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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  has  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  swift  adoption  of  the  CEFTA  AP  7  on  dispute  settlement  and  proceed  with  the 
implementation of the 2021-2024 Common Regional Market action plan.  

In May 2023, Bosnia and Herzegovina introduced a further temporary export ban for certain 
wood products,  following similar measures taken in  2022. The ban was introduced without 
providing sufficient  justifications or notifying or  consulting the Commission in  advance, as 
required under the SAA. This  decision has now lapsed  but  Bosnia and Herzegovina should 
abstain  from  taking  further  unilateral  trade  measures,  without  prior  consultation  with  the 
Commission  and  without  a  valid  justification,  in  line  with  its  obligations  under  the  SAA. 
Bosnia and Herzegovina should also  take  action  to  cease the practice by  certain  cantons of 
excluding certain imported medicines from the lists of medicines that can be prescribed and 
dispensed at the expense of the compulsory health insurance. 

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 
Regulation (EU) 2021/821 and its annual updates as regards the list of dual-use items.  

As  regards  bilateral  agreements  with  third  countries,  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.    Bosnia  and  Herzegovina  has  36  bilateral 
investment treaties in force, 18 of which are with EU Member States. 

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.  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,  in  accordance  with  EU  policies  and  principles,  and  to  build  dedicated 
administrative structures.  

Chapter 31: Foreign, security and defence policy 
Member States must be able to conduct political dialogue 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  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.  Alignment  with  EU  restrictive  measures  remains  a  matter  of  political 
dispute, and certain ministries have hindered their implementation. Bosnia and Herzegovina 
has  yet  to  join  a  number  of  international  arms  control  regimes  as  well  as  to  strengthen  the 
monitoring  regime  regarding  weapons  and  military  equipment.  Bosnia  and  Herzegovina 
continued to participate in EU crisis management missions and operations under the common 
security and defence policy. 

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

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→  achieve  and  maintain  full  alignment  with  EU  Common  Foreign  and  Security  Policy, 
ensure  the  thorough  implementation  of  restrictive  measures  stemming  from  EU 
alignment,  and  make  further  efforts  to  close  space  for  foreign  interference  and 
information manipulation; 

→  align legislation and procedures with EU standards on marking and deactivation of small 

arms and light weapons, including for seized and confiscated weapons; 

→  appoint  the  ‘political  director’  and  ‘European  correspondent’  within  the  Ministry  for 

Foreign Affairs. 

The political dialogue between the EU and Bosnia and Herzegovina on foreign and security 
policy  issues  continued,  including  at  high  level.  In  March  2023,  Bosnia  and  Herzegovina 
participated at ministerial level at the first Schuman Security and Defence Forum and in May 
2023 in the working lunch with members of the Foreign Affairs Council. In April 2023, the 
deputy foreign minister participated in the informal EU-Western Balkans meeting of political 
directors in Brussels.  

The  implementation  of  Bosnia  and  Herzegovina’s  2018-2023  foreign  policy  strategy  in  the 
reporting  period  was  affected  by  frequently  divergent  positions  among  the  members  of  the 
Presidency.  

Bosnia  and  Herzegovina  still  needs  to  appoint  a  ‘political  director’  and  ‘European 
correspondent’  within  the  Ministry  of  Foreign  Affairs.  Rules  and  practices  based  on  ethnic 
quotas in appointing the diplomatic and consular staff have a negative impact on the capacity 
of the ministry, adversely affecting Bosnia and Herzegovina’s foreign policy objectives.  

On common foreign and security policy (CFSP), Bosnia and Herzegovina has significantly 
improved  its  alignment with  EU  statements  and relevant  Council  Decisions,  including  with 
restrictive  measures  following  Russia’s  unprovoked  war  of  aggression  against  Ukraine. 
Alignment with EU sanctions remains a matter of political contestation as one member of the 
Presidency  advocated  for  a  neutral  stance  on  Russia’s  war  of  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 2022, Bosnia and 
Herzegovina’s alignment rate with relevant High-Representative statements on behalf of the 
EU and with Council Decisions reached 80%. As of August 2023, Bosnia and Herzegovina’s 
alignment rate was of 98%  as the country started to align also with EU positions on Iran and 
Syria. Bosnia and Herzegovina aligned with the EU position at the United Nations General 
Assembly  (UNGA),  the  OSCE  and  the  Council  of  Europe  on  Russia’s  war  of  aggression 
the  principles  underlying  a 
the  UNGA  resolution  on 
against  Ukraine, 
comprehensive,  just  and  lasting  peace  in  Ukraine  adopted  in  February  2023.  Bosnia  and 
Herzegovina should reach full alignment with EU foreign policy to signal its commitment to 
the EU path and continue to strengthen its capacity to implement and enforce the sanctions in 
place. 

including 

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 the OSCE. Bosnia and Herzegovina 
chaired the OSCE Forum for Security Co-operation from January to April 2023. Bosnia and 
Herzegovina has been participating in NATO’s membership action plan since 2019.  

Bosnia  and  Herzegovina  maintains  a  bilateral  immunity  agreement  with  the  United  States, 
granting US citizens exemptions from the jurisdiction of the International Criminal Court. In 
doing this, Bosnia and Herzegovina does not comply with the EU common positions on the 

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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.  

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

On  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  weapons  and  military 
equipment produced and traded within the country. 

Bosnia and Herzegovina is party to the Chemical Weapons Convention and has legislation in 
place to implement it, together with a state-level coordination body.  

As regards small arms and light weapons, Bosnia and Herzegovina is implementing the 2018 
regional roadmap and the 2021-2024 strategy and action plan. Bosnia and Herzegovina needs 
to  mark  and  register  all  weapons  of  the  country’s  security  forces  into  a  single  registry  to 
ensure  adequate  traceability,  develop  post-manufacture  marking  requirements  for  weapons 
earmarked for deactivation, in line with EU standards, and improve the traceability of seized 
and confiscated weapons, notably by amending the Law on marking to cover these types of 
firearms. 

In  terms  of  security  measures,  Bosnia  and  Herzegovina  continued  to  implement  the 
agreement with the EU on security procedures for the exchange of classified information.  

Regarding the common security and defence policy (CSDP), Bosnia and Herzegovina has 
established  a  framework  with  the  EU  for  participation  in  crisis  management  missions  and 
operations. Bosnia and Herzegovina contributes to the EU Training Mission (EUTM) in the 
Central  African  Republic.  Bosnia  and  Herzegovina  also  takes  part  in  UN  missions  in  the 
Democratic  Republic  of  the  Congo  and  in  Mali.  The  Armed  Forces  of  Bosnia  and 
Herzegovina act as a functional, professional military organisation in spite of the protracted 
shortage  of  personnel  and  equipment.  Bosnia  and  Herzegovina  is  invited  to  step  up 
participation in CSDP military missions and operations.  

The  demining  battalion  of  the  Armed  Forces  of  Bosnia  and  Herzegovina  is  essential  to 
achieve a mine-free Bosnia and Herzegovina. The civilian 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. 

Bosnia  and  Herzegovina  takes  part  in  the  European  Peace  Facility  Balkan  Medical  Task 
Force assistance measure and is a beneficiary of an assistance measure for the Armed Forces 
of Bosnia and Herzegovina.  

Bosnia  and  Herzegovina  does  not  have  an  overall  assessment  or  a  policy  framework  for 
addressing hybrid threats, and remains vulnerable to cyberattacks. In 2022, several serious 
cyberattacks  targeted the country’s institutions, including the Parliament. 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. In line with the Declaration of the 
EU – Western Balkans summit (Tirana, 6 December 2022), Bosnia and Herzegovina needs to 
make further efforts on closing space for foreign interference and information manipulation, 
including disinformation, taking actions towards building societal resilience against all forms 

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of hybrid threats. 

132 

 
 
 
 
ANNEX I – 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  restarted  throughout  the  reporting 
period  after  political  blockade  in  2021-2022.  Following  completion  of  the  6th  cycle  of 
subcommittees,  the  SA  Committee  took  place  on  16  June  and  the  SA  Council  on  19  July 
2023. The country also participates in Economic and Financial Dialogue between the EU and 
the Western Balkans and Türkiye, where joint recommendations were adopted at ministerial 
level on 16 May 2023.  

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 63% of the country’s trade in goods (74% 
of exports and 57% of imports), for a total trade volume of EUR 15.1 billion in 2022.  

Bosnia  and  Herzegovina  had  applied  for  EU  membership  in  2016,  and  in  May  2019  the 
Commission  adopted  its  opinion  (avis)  setting  out  14  key  priorities  in  the  areas  of 
democracy/functionality,  rule  of  law,  fundamental  rights,  and  public  administration  reform. 
Fulfilling  the  14  key  priorities  will  allow  the  Commission  to  recommend  opening  EU 
accession  negotiations  with  Bosnia  and  Herzegovina.  In  December  2022  the  European 
Council  granted  Bosnia  and  Herzegovina  candidate  country  status,  on  the  understanding 
that a number of steps are taken, as outlined in the Commission recommendation in October 
2022.  

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 sixth report under the visa suspension mechanism in October 2023 
concluded that Bosnia and Herzegovina continues to meet the visa liberalisation benchmarks.  

Bosnia  and  Herzegovina  significantly  improved  alignment  with  EU  common  foreign  and 
security policy positions and declarations. Bosnia and Herzegovina continued to participate 
in  EU  crisis  management  missions  and  operations  under  the  common  security  and  defence 
policy. The EU continued to deploy considerable resources in Bosnia and Herzegovina. 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  UN  Security  Council  extended 
EUFOR’s mandate until November 2024.  

The Armed Forces of Bosnia and Herzegovina benefit from EUR 20 million assistance from 
the  European  Peace  Facility  (EPF),  which  enhances  their  capacity  to  participate  in  CSDP 
military missions and operations. Their demining battalion is essential for achieving a mine-
free Bosnia and Herzegovina and benefits from EPF support in purchasing vehicles and metal 
detectors. The Armed Forces of Bosnia and Herzegovina received EPF support in chemical, 
biological,  radiological  and  nuclear  (CBRN)  protection,  and  also  take  part  in  the  EUR  6 
million EPF Balkan Medical Task Force assistance measure.  

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  and  EUR  188  million  under  IPA  III  2021-23.  
Bosnia and Herzegovina benefits from EUR 70 million (IPA 2023) for a State and Resilience 
133 

 
 
Building  Contract  as  part  of  the  EUR  1  billion  Energy  Support  Package  for  the  Western 
Balkans,  aimed  to  help  to  mitigate  the  increase  of  energy  prices  for  vulnerable  households 
and businesses in the immediate term and support energy transition and energy security in the 
Western Balkans. Under the EIP, Bosnia and Herzegovina benefits from a portfolio of EUR 
934  million of  ongoing/active  bilateral  IPA  funds,  mobilising  additional  funding  of  EUR 
2.595 billion.  

The EU provides support via IPA and the Foreign Policy Instrument to  strengthen Western 
Balkans  partners’  resilience  to  face  hybrid  threats  including  cyber  and  foreign  information 
manipulation and interference.   

Bosnia  and  Herzegovina  also  benefits  from  investments  through  the  Western  Balkans 
Investment  Framework  (WBIF).    WBIF  provided  to  Bosnia  and  Herzegovina  since  2009 
approx.  EUR  717  million  of  grants  for  investment  and  technical  assistance.  The  current 
WBIF portfolio  amounts  to  EUR  640  million  of  grants  leveraging  investments  estimated 
at EUR 2 billion.  

Bosnia  and  Herzegovina  participates  in  three  cross-border  cooperation  programmes,  as 
well  as  in  transnational  cooperation  programmes.  To  facilitate  the  development  of  public 
procurement in the country, Bosnia and Herzegovina is participating as an observer in a pilot 
project under the Technical Support Instrument. 

Bosnia and Herzegovina also participates union programmes, such as Horizon 2020, Creative 
Europe, Fiscalis 2020, Erasmus+ (international dimension),  the Civil Protection Mechanism 
of the Union (as of 2023), and the Single Market Programme. Bosnia and Herzegovina has 
expressed  interest  or  is  considering  joining  several  more  programmes:  Customs,  Health, 
Justice,  Citizens,  Equality,  Rights  and  Values  (CERV),  Employment  and  Social  Innovation 
(EaSI), as well as Digital Europe programme, during or after 2023. 

134 

 
 
 
Note 

1) 

Note 

STATISTICAL DATA (as of 31/08/2023) 
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 (%) 
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) 
Birth rate: number of enterprise births in the reference period (t) divided by the number of 
enterprises active in t (%) 

Note 

135 

2010 
3 844 s 
51 209 w 

2017 
3 510 s 
51 209 w 

2018 
3 500 s 
51 209 w 

2019 
3 492 ps 
51 209 w 

2020 
: 
51 209 w 

2021 
: 
51 209 w 

2010 
25 365 
12 969 
3 374 s 
7 500 
29.8 s 
0.9 
: 
: 

: 
: 
: 

8.0 
21.3 
5.2 
65.6 s 
106.9 
20.8 
-  1.1 
29.7 
51.3 
: 

2010 
93.7 
: 
: 

2017 
31 803 
16 261 
4 633 s 
9 300 
31.1 s 
3.2 
: 
: 

: 
: 
: 

6.5 
23.1 
4.8 
65.5 s 
95.7 
21.7 
3.0 
40.3 
56.3 
: 

2017 
107.7 
68 761 b 
11.5 p 

2018 
33 942 
17 354 
4 958 s 
10 000 
32.4 s 
3.8 
: 
: 

: 
: 
: 

6.9 
23.8 
4.8 
64.6 s 
93.0 
22.4 
2.0 
42.0 
56.4 
: 

2018 
109.5 
68 085 
11.1 p 

2019 
35 785 
18 297 
5 240 ps 
10 500 
32.7 s 
2.9 
: 
: 

: 
: 
: 

6.5 
22.9 
5.0 
65.6 s 
91.7 
22.7 
2.1 
40.0 
54.5 
: 

2019 
103.5 
67 981 
10.4 p 

2020 
34 728 
17 756 
: 
10 200 
33.1 s 
-  3.0 
: 
: 

: 
: 
: 

7.0 
22.8 
5.4 
64.7 s 
92.7 
22.1 
1.0 
34.2 
47.9 
: 

2020 
96.7 
66 873 
: 

2021 
39 107 
19 995 
: 
: 
: 
7.4 
: 
: 

: 
: 
: 

6.0 
24.5 
5.1 
64.3 s 
87.5 
21.4 
4.6 
42.2 
53.9 
: 

2021 
106.2 
70 794 pw 
: 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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) 

Inflation rate and house prices 
Consumer price index (CPI), change relative to the previous year (%) 
**Annual change in the deflated house price index (2015 = 100) 

Balance of payments 
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 (%) 
Net balance (inward - outward) of foreign direct investment (FDI) (million euro) 
Foreign direct investment (FDI) abroad (million euro) 
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 (%) 

: 

: 

: 
: 

2010 
2.1 w 
: 

2010 
-  782.8 
- 3 674.3 
876.0 
210.9 
1 804.6 
76.2 

: 
: 
272.2 w 
58.8 w 
: 
331.0 w 
156.7 w 
-  53.7 w 
7.8 sw 

Note 

2) 

Note 

3) 
4) 3) 
5) 
4) 3) 
3) 5) 
4) 
4) 

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 

6) 
6) 
6) 

2010 
-  2.4 w 
30.2 w 
42.9 w 
45.3 w 

9.5 p 

10.3 p 

3.8 p 

: 

: 

69.5 bsw 

69.1 sw 

69.1 sw 

69.6 sw 

69.1 psw 

4 845 bsw 
7 681 b 

5 269 sw 
8 393 

5 780 sw 
9 040 

5 677 sw 
8 829 

6 733 psw 
10 689 pw 

2017 
0.8 w 
: 

2017 
-  777.3 
- 3 792.2 
1 191.0 
-  134.6 
1 958.5 
35.9 

-  4.8 
31.3 
366.8 w 
88.4 w 
59.4 w 
455.2 w 
292.7 w 
-  46.4 w 
8.3 s 

2017 
2.6 w 
36.1 w 
43.0 w 
40.4 w 

2018 
1.4 w 
: 

2018 
-  559.3 
- 3 845.5 
1 335.6 
-  99.6 
2 050.2 
15.1 

-  4.2 
30.6 
491.0 w 
16.4 w 
-  14.4 w 
507.4 w 
290.8 w 
-  42.2 w 
8.4 s 

2018 
2.3 w 
34.1 w 
43.0 w 
40.8 w 

2019 
0.6 w 
: 

2019 
-  474.1 
- 4 071.4 
1 430.2 
-  30.8 
2 198.0 
49.1 

-  3.5 
25.1 
377.8 w 
19.7 w 
-  26.1 w 
397.4 w 
207.7 w 
-  37.3 w 
8.4 s 

2019 
1.9 w 
32.7 w 
42.5 w 
40.6 w 

2020 
-  1.1 w 
: 

2020 
-  575.1 
- 3 204.5 
763.4 
-  99.2 
1 965.3 
66.7 

-  3.0 
13.9 
322.2 w 
61.6 w 
27.3 w 
383.8 w 
253.6 w 
-  35.3 w 
7.3 s 

2020 
-  5.3 w 
36.6 w 
42.1 w 
47.4 w 

2021 
2.0 w 
: 

2021 
-  472.0 
- 3 666.0 
1 314.6 
-  288.7 
2 168.0 
31.6 

-  2.7 
20.8 
459.8 w 
68.9 w 
26.2 w 
528.7 w 
213.0 w 
-  30.8 w 
7.8 s 

2021 
: 
 w 
: 
: 

Financial indicators 
Gross external debt of the whole economy, relative to GDP (%) 
Gross external debt of the whole economy, relative to total exports (%) 
Money supply: M1 (banknotes, coins, overnight deposits, million euro) 

Note 

4) 
4) 
7) 

2010 
72.0 sw 
242.4 w 
3 016.6 w 

2017 
66.8 sw 
163.4 w 
5 405.6 w 

2018 
65.6 sw 
153.9 w 
6 209.7 w 

2019 
63.1 sw 
155.5 w 
6 775.2 w 

2020 
64.3 sw 
185.6 w 
7 697.6 w 

2021 
60.1 sw 
136.1 w 
9 166.2 w 

136 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money supply: M2 (M1 plus deposits with maturity up to two years, million euro) 
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 (%) 
Euro exchange rates: average of period (1 euro = … national currency) 
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) 
Value of reserve assets (including gold) (million euro) 

8) 
10) 
10) 11) 
12) 13) 
12) 
12) 

14) 
15) 
16) 

6 967.5 w 
 w 
7 232.3 w 
-  0.1 w 
-  0.6 w 
61 w 
 w 
7.89 w 
0.19 w 
1.956 
98 w 
0 sw 

11 307.9 w 
 w 
9 419.2 w 
8.3 w 
3.4 w 
58 w 
 w 
4.38 w 
0.07 w 
1.956 
102 w 
0 sw 

12 368.7 w 
 w 
9 962.9 w 
9.1 w 
3.3 w 
58 w 
 w 
3.79 w 
0.05 w 
1.956 
103 w 
0 sw 

13 463.7 w 
 w 
10 620.9 w 
8.0 w 
3.8 w 
59 w 
 w 
3.29 w 
0.06 w 
1.956 
104 w 
0 sw 

14 443.5 w 
 w 
10 403.5 w 
3.7 w 
-  1.2 w 
59 w 
 w 
3.05 w 
0.07 w 
1.956 
106 w 
0 sw 

16 113.7 w 
 w 
10 776.7 w 
9.9 w 
: 
: 
 w 
3.20 w 
0.05 w 
1.956 
108 w 
0 sw 

4) 

3 301.8 w 

5 427.0 w 

5 944.1 w 

6 441.1 w 

7 091.0 w 

8 359.1 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) 
Terms of trade (export price index / import price index * 100) (number) 
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 
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) 

Labour market 
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 

Note 

17) 

Note 

2010 
6 962 
3 628 
- 3 334 
: 
69.0 s 
60.3 s 

2010 
-  0.4 

6.4 
: 
: 

2017 
9 298 
5 653 
- 3 646 
101.3 sw 
70.4 s 
60.0 s 

2018 
9 855 
6 085 
- 3 770 
102.7 sw 
72.2 s 
59.7 s 

2019 
9 969 
5 876 
- 4 093 
102.3 sw 
72.3 s 
61.1 s 

2020 
8 634 
5 379 
- 3 254 
105.6 sw 
72.4 s 
60.8 s 

2021 
11 042 
7 298 
- 3 744 
104.4 sw 
72.8 s 
58.9 s 

2017 
-  2.0 

2018 
-  2.4 p 

2019 
: 

2020 
: 

2021 
: 

: 
: 
: 

: 
: 
: 

: 
: 
: 

: 
: 
: 

: 
: 
: 

Note 
18) 19) 

2010 
58.4 w 

2017 
58.4 w 

2018 
58.4 w 

2019 
59.0 w 

2020 
62.3 bw 

2021 
63.4 bw 

18) 19) 

42.8 w 

46.6 w 

47.7 w 

49.7 w 

52.5 bw 

52.6 bw 

18) 19) 
18) 19) 

18) 19) 

54.6 w 
31.2 w 
26.8 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 

66.0 bw 
39.1 bw 
35.6 bw 

137 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 (%) 
Youth unemployment rate: proportion of the labour force aged 15–24 that is unemployed 
(%) 
Long-term unemployment rate: proportion of the labour force that has been unemployed 
for 12 months or more (%) 
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) (%) 

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 
*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 (%) 

Standard of living 
Number of passenger cars relative to population size (number per thousand population) 
Number of mobile phone subscriptions relative to population size (number per thousand 
population) 
Mobile broadband penetration (per 100 inhabitants) 
Fixed broadband penetration (per 100 inhabitants) 

Infrastructure 
Density of railway network (lines in operation per thousand km²) 

Length of motorways (kilometres) 

18) 19) 
18) 19) 
18) 19) 

18) 19) 
18) 19) 

: 
: 
: 
: 
18.6 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 
23.9 bw 
9.5 bw 
54.7 bw 
19.1 bw 

9.4 bw 
24.4 bw 
9.1 bw 
57.0 bw 
19.8 bw 

18) 19) 

81.4 w 

81.6 w 

81.6 w 

82.8 w 

80.9 bw 

80.2 bw 

18) 19) 
18) 19) 
18) 19) 
18) 19) 

27.3 w 
25.6 w 
29.9 w 
57.5 w 

20.7 w 
19.0 w 
23.3 w 
45.8 w 

18.5 w 
17.3 w 
20.5 w 
38.8 w 

15.9 w 
13.8 w 
19.0 w 
33.8 w 

15.9 bw 
14.2 bw 
18.6 bw 
36.6 bw 

17.4 bw 
14.4 bw 
22.0 bw 
38.3 bw 

18) 19) 

22.3 w 

17.0 w 

15.2 w 

12.1 w 

11.9 bw 

13.7 bw 

18) 19) 

28.2 w 

19.5 w 

19.1 w 

: 

19.5 bw 

21.8 bw 

18) 19) 

13.2 w 

14.6 w 

13.9 w 

10.9 w 

10.9 bw 

10.8 bw 

Note 

22) 

18) 23) 

Note 

24) 

24) 
24) 

2010 
798 w 
: 

: 
: 
7.9 w 

2010 
189.0 
784.3 ew 

: 
: 

Note 

1) 

2010 
20.1 sw 

35 w 

2017 
851 w 
: 

: 
: 
5.1 w 

2017 
230.0 
981.7 w 

43.4 w 
19 w 

2017 
19.9 sw 

172 

2018 
879 w 
: 

: 
: 
5.4 w 

2018 
240.0 
989.9 w 

52.7 w 
20 w 

2018 
19.9 sw 

198 

2019 
921 w 
: 

: 
: 
3.8 w 

2020 
956 w 
: 

: 
: 
4.7 w 

2021 
998 w 
: 

: 
: 
4.7 w 

2019 
245.0 
1 075.5 w 

2020 
244.0 
1 010.0 w 

2021 
256.0 
1 088.6 ew 

44.7 w 
21 w 

2019 
19.9 sw 

208 

46.7 w 
22 w 

2020 
19.9 sw 

218 

52.3 ew 
23 ew 

2021 
19.9 sw 

218 

Innovation and research 

Note 

2010 

2017 

2018 

2019 

2020 

2021 

138 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 (%) 

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) (%) 

Energy 
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) 
Gross electricity generation (GWh) 

Agriculture 
Agricultural production volume index of goods and services (at producer prices) (2010 = 
100) 
Utilised agricultural area (thousand hectares) 
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) 
Harvested crop production: cereals (including rice) (thousand tonnes) 
Harvested crop production: sugar beet (thousand tonnes) 
Harvested crop production: vegetables (thousand tonnes) 

Source: Eurostat and/or the statistical authorities in Bosnia and Herzegovina 

: = not available 
  b = break in series 
  e = estimated value 
  n =  not significant value 
  p = provisional 

139 

Note 

25) 

Note 

Note 

: 
: 
: 

: 

2010 
75.6 w 
: 

60.4 w 
62.3 w 

2010 
: 
: 
: 
: 
: 
: 
: 

2010 
: 

1 708.7 e 
462.0 
581.0 
1 110.0 s 
: 
1 264.4 e 
0.0 
273.4 e 

4.1 sw 
0.20 sw 
0.04 

4.0 sw 
0.19 sw 
0.06 

4.1 sw 
0.19 
0.09 

4.3 sw 
0.20 
0.09 

: 
: 
: 

: 

69.2 

72.0 

72.8 

75.5 

2017 
: 
428.4 

39.6 
78.9 w 

2017 
4 624 
0 
3 612 
0 
2 299 s 
6 754 
16 438 

2017 
: 

1 762.0 e 
445.0 e 
548.0 e 
1 090.0 s 
: 
1 176.9 e 
0.0 
291.5 e 

2018 
: 
456.8 

41.5 
78.7 w 

2018 
5 672 
0 
3 659 
0 
1 814 s 
7 478 
19 160 

2018 
: 

1 779.6 e 
438.0 
542.0 e 
1 085.0 s 
: 
1 764.1 e 
0.0 
298.7 e 

2019 
: 
429.3 

45.5 
77.4 w 

2019 
5 405 
0 
3 403 
0 
1 979 s 
7 230 
17 493 

2019 
: 

1 806.3 e 
430.0 e 
543.0 e 
1 085.0 s 
: 
1 685.6 e 
0.0 
298.8 e 

2020 
: 
435.2 

49.3 
78.8 w 

2020 
5 237 
0 
3 329 
0 
1 805 s 
7 108 
16 874 

2020 
: 

1 845.6 e 
427.0 e 
547.0 e 
1 085.0 s 
: 
1 966.8 e 
0.0 
323.7 e 

2021 
: 
420.4 

46.3 
78.8 w 

2021 
5 223 
0 
3 121 
0 
2 002 s 
7 374 
18 536 

2021 
: 

1 865.8 e 
339.5 
569.6 
1 083.2 s 
: 
1 425.1 e 
0.0 
292.7 e 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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) M1 money supply comprises cash outside banks and transferable deposit in domestic currency of all domestic sectors (except central government deposits). 

8) 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). 

9) Central Bank of BiH produces only the following  monetary aggregates: M1, QM and M2 based on IMF recommendations. 

10) Based on IMF monetary and financial statistics manual, 2000. 
11) 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 millions KM in private enterprises and 
household sectors. 

12) Data for monetary financial institutions. 
13) The Central Bank of Bosnia and Herzegovina started with other financial corporation statistics from 2006. 
14) Money market is not yet  established in Bosnia and Herzegovina. 
15) Short-term lending rates in national currency to non-financial corporations (weighted average). 
16) Demand deposit rates in national currency of households (weighted average). 
17) Paasche export and import unit value indices 
18) 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. 

19) From January 2021, the Agency for Statistics of Bosnia and Herzegovina began to apply the new, redesigned methodology of the Labour Force Survey. The redesign of the survey 

took place on the basis of and in accordance with the new Regulation of the European Parliament and the Council, which entered into force on 1th January 2021. With the introduction 
of the new, redesigned methodology of the Labour Force Survey from January 2021, the series of data published in the previous year was interrupted. 

20) The public sector includes NACE Rev. 1.1 Sections L, M and N while the private sector includes other NACE Sections. 
21) The public sector includes NACE Rev. 2 Sections O, P and Q while the private sector includes other NACE Sections. 
22) Net earnings. 
23) From 2020 onwards LFS is conducted on a quarterly basis leading to break in series compared to results from previous years. With the introduction of the new, redesigned 

methodology of the Labour Force Survey (Regulation (EU) 2019/1700; Implementing Regulation (EU) 2019/2240) from January 2021, the series of data published in the previous year 
was interrupted. This means that the data for 2020 and 2021 are also not comparable. 

24) Data for variables TEL1200Z, TEL3100Z, TEL3200Z are estimated for 2021 based on estimated total number of population for 2020 reference year. Official estimate of total number of 

population for 2021 will be available by the end of October 2022. Revised data will be submitted in the 2nd wave of data collection 

25) Data not collected on inland waterways. Road share of inland freight transport based on road and rail transport. 

140 

 
 
 
 
 
 
 
 
141