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In the exercise of the powers vested in the High Representative
by Article V of Annex 10 (Agreement on Civilian Implementation on the Peace
Settlement) to the General Framework Agreement for Peace in Bosnia and
Herzegovina (hereinafter: General Agreement for Peace), according to which the
High Representative is the final authority in theatre regarding interpretation
of the said Agreement on the Civilian Implementation of the Peace Settlement;
and Article II.1 (d) of the last said Agreement, which requests from the High
Representative to facilitate the resolution of any difficulties arising in
connection with civilian implementation of the General Framework Agreement for
Peace in Bosnia and Herzegovina;
Recalling paragraph XI.2 of the Conclusions of the Peace
Implementation Conference held in Bonn on 9 and 10 December 1997, in which the
Peace Implementation Council welcomed the High Representative’s intention to use
his final authority in theatre regarding interpretation of the Agreement on the
Civilian implementation of the Peace Settlement in order to facilitate the
resolution of any difficulties as aforesaid “by making binding decisions, as he
judges necessary” on certain issues including (under sub-paragraph (c) thereof)
measures to ensure the Peace Agreement throughout Bosnia and Herzegovina and its
Entities”;
Noting that the competent authorities in Bosnia and Herzegovina
have yet to establish a systemic legislative mechanism for apportioning
financial assets belonging to Bosnia and Herzegovina pursuant to the Agreement
on the Succession Issues of the Former Socialist Federal Republic of Yugoslavia,
(hereinafter, Succession Agreement) (“Official Gazette of Bosnia and
Herzegovina”, No. 10/01), between the State and other levels of government, and
for determining the appropriate use of these assets;
Recalling that the Parliamentary Assembly of Bosnia and
Herzegovina has thus far enacted only partial solutions on the apportionment and
use of the financial assets, including the enactment of the Law on Purpose and
Utilization of a Portion of the Property that Bosnia and Herzegovina Obtained
Under the Agreement on Succession Issues (Official Gazette of Bosnia and
Herzegovina, no. 11/02), by which monetary proceeds in the amount of
156,011,373.15 KM were allocated to Bosnia and Herzegovina at the ratio of 13%,
the Federation of Bosnia and Herzegovina at the ratio of 46%, and Republika
Srpska at the ratio of 25%, whereas the remaining 16% was placed in capital
reserves with the Central Bank of Bosnia and Herzegovina;
Recalling further that on 2 of March 2009, the Minister of
Finance and Treasury of Bosnia and Herzegovina, Minister of Finance of the
Federation of Bosnia and Herzegovina and the Minister of Finance of Republika
Srpska signed a Protocol on the Temporary Distribution of Funds Received Under
the Agreement on Succession Issues, (hereinafter, Protocol), by which they
agreed to temporarily allocate 170,892,841.01 KM in pecuniary assets received
under the Succession Agreement “in accordance with the principle applied by the
Law on Purpose and Utilization of a Portion of Property that was Obtained by
Bosnia and Herzegovina Under the Succession Agreement;”
Notwithstandingthe aforementioned Law on Purpose and
Utilization of a Portion of Property that was Obtained by Bosnia and Herzegovina
Under the Succession Agreement, which assigned a portion of the Succession
Agreement assets between Bosnia and Herzegovina, the Federation of Bosnia and
Herzegovina and Republika Srpska respectively at the ratio of 13%, 46%, and 25%,
the BiH Fiscal Council adopted a conclusion on 9 March 2009 purporting to
support the Protocol between the State and Entity finance ministers but which
prescribed that the portion of succession funds specified by the Protocol shall
be distributed at the ratio of 65% for the Federation of Bosnia and Herzegovina
and 35% for Republika Srpska;
Noting that pursuant to the aforementioned conclusion of the
BiH Fiscal Council, on 2 April 2009 the Council of Ministers of Bosnia and
Herzegovina adopted the Decision on the Temporary Allocation of a Portion of
Property of Bosnia and Herzegovina Obtained Under the Agreement on Succession
Issues, (Official Gazette of Bosnia and Herzegovina, no. 34/09), affirming the
aforementioned Protocol and directing that 170,584,245,841.01 KM in succession
assets be apportioned exclusively between the Federation of Bosnia and
Herzegovina and Republika Srpska, respectively at the ratio of 65% and 35% until
such time as a law may be enacted that fixes the final distribution ratios, and
providing that the Single Account of the Indirect Taxation Authority be used to
secure the return of any funds that may be necessary to implement the final
apportionment specified by such law;
Recalling the letter of the High Representative of 20 April
2009 to the Chair of the Council of Ministers of Bosnia and Herzegovina by which
he noted that the exclusion of the State from the apportionment of succession
funds under the aforementioned conclusion of the BiH Fiscal Council and decision
of the Council of Ministers contradicts the distribution ratios encompassed by
the 2002 Law on Purpose and Utilization of a Portion of Property that was
Obtained by Bosnia and Herzegovina Under the Succession Agreement, and by which
he noted that such exclusion “represents a worrisome precedent for future cases
of apportionment of these funds” in light of the obligations of Bosnia and
Herzegovina arising under Annex “C” of the Succession Agreement that could be
covered from these funds, a part of which might become due this year;”
Recalling further the aforementioned letter of the High
Representative of 20 April 2009 by which he also noted that the Brčko District
of Bosnia and Herzegovina is also excluded from the temporary apportionment of
succession funds endorsed by the Council of Ministers, and by which he reminded
the Council of Ministers that “such systemic exclusion of Brčko District in this
type of agreement led to the initiation, in 2005, of proceedings before the
Arbitral Tribunal for the Dispute Over Inter-Entity Boundary in Brčko Area, and
that the reopening of similar proceedings cannot be ruled out;”
Cognizant of the 14 May 2009 letter of the Supervisor of Brčko
District of Bosnia and Herzegovina to the Chairman of the Council of Ministers
of Bosnia and Herzegovina by which he emphasized that “Brčko District of Bosnia
and Herzegovina is an integral part of the fiscal system of Bosnia and
Herzegovina that contributes to the collection of indirect tax revenues, which
has -and continues to meet- obligations arising from BiH’s external and internal
debts (…) therefore has a right to participate in the apportionment of
succession funds in order to carry out its responsibilities in accordance with
the awards of the Arbitral Tribunal for Dispute over Inter-Entity Boundary in
Brčko Area and the Constitution of Bosnia and Herzegovina;”
Considering the Communiqué of 30 June 2009, by which the
Steering Board of the Peace Implementation Council noted that the Entities have
not yet fulfilled their remaining obligations under the Awards of the Arbitral
Tribunal for Dispute over Inter-Entity Boundary in Brčko Area to resolve,
inter alia, the issue of “the share of gold and other proceeds from SFRY
assets due to the Brčko District of Bosnia and Herzegovina, and called upon the
Entities, and the State, where appropriate, to resolve these issues no later
than 15 September 2009;”
Notwithstanding the Draft Law on the Distribution, Purpose and
Use of Financial Assets Obtained under Annex “C” to the Agreement on the
Succession Issues, adopted by the Council of Ministers Bosnia and Herzegovina on
14 September 2009, which foresees the apportionment, purpose and use of the
financial assets received by Bosnia and Herzegovina under the Agreement, the
authorities of Bosnia and Herzegovina have failed to fully regulate the share of
gold and other proceeds from succession assets due to the Brčko District of
Bosnia and Herzegovina within the 15 September 2009 deadline set by the Steering
Board of the Peace Implementation Council;
Regretting that the failure to resolve outstanding issues
identified by Steering Board of the Peace Implementation Council, including the
share of gold and other proceeds from succession assets due to the Brčko
District of Bosnia and Herzegovina represents a continuing detriment to Brčko
District of Bosnia and Herzegovina institutions;
Having considered, borne in mind and noted all the matters aforesaid, the
High Representative hereby issues the following:
DECISION
Enacting the Law on the Distribution, Purpose and Use of
Financial Assets Obtained Under Annex “C” to the Agreement on the Succession
Issues
The Law which follows and which forms an integral part of this Decision shall
enter into force as provided for in Article 11 thereof on an interim basis,
until such time as the Parliamentary Assembly of Bosnia and Herzegovina adopts
this Law in due form, without amendment and with no conditions attached.
This Decision shall enter into force forthwith and shall be published in the
“Official Gazette of Bosnia and Herzegovina” without delay.
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Sarajevo, 18 September 2009 |
Dr. Valentin Inzko |
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High Representative |
LAW
ON THE DISTRIBUTION, PURPOSE AND USE OF FINANCIAL
ASSETS OBTAINED UNDER ANNEX “C” TO THE AGREEMENT ON THE SUCCESSION
ISSUES
Article 1
(Scope of the Law)
This Law shall regulate the distribution, purpose and use of financial assets
that Bosnia and Herzegovina obtained under Annex “C” to the Agreement on the
Succession Issues as ratified by the Decision on Ratification of the Agreement
on the Succession Issues (Official Gazette of BiH – the International Treaties,
10/01), (hereinafter referred to as: the Agreement).
Article 2
(Types of Financial Assets)
The financial assets obtained by Bosnia and Herzegovina under Annex “C” of
the Agreement comprised of pecuniary assets, proceeds obtained through the sale
of monetary gold, the value of shares, dividends and interests.
Article 3
(Pecuniary Assets)
Pecuniary assets shall constitute the funds that belong to Bosnia and
Herzegovina pursuant Annex “C” of the Agreement, which are deposited on
segregated escrow accounts held by the Central Bank of Bosnia and
Herzegovina.
Article 4
(Proceeds Obtained Through the Sale of Gold)
Monetary gold shall be transferred to the Central Bank of Bosnia and
Herzegovina and shall be converted into banknotes through sale at national and
international markets on the basis of an assessment by the Central Bank of
Bosnia and Herzegovina and the Ministry of Finance and Treasury of Bosnia and
Herzegovina regarding the most favorable time and conditions for sale.
The Decision on the Assignment of the Property of Bosnia and Herzegovina
Obtained Through the Agreement on Succession Issues and its conversion into
banknotes that was enacted by the Council of Ministers of BiH on 12th
January 2006 (Official Gazette of BiH, no. 14/06 and 21/06) is hereby
repealed.
Article 5
(Shares and Dividends)
The value of shares and dividends obtained shall be determined in the manner
and under the terms and conditions of regular stock market operations.
Article 6
(Interests)
The interests arising from the time-tied pecuniary deposits obtained under
the Agreement in national and international banks shall constitute pecuniary
assets that together with the principal amount make the integral part of the
total stock of assets obtained on the basis of the succession agreement.
Article 7
(Time and conditions for Sale)
Upon the recommendation of the Ministry of Finance and Treasury of Bosnia and
Herzegovina, the Council of Ministers shall decide, as necessary, on the most
favorable time and conditions for sale.
Article 8
(Distribution of the Financial Assets)
All financial assets received by Bosnia and Herzegovina pursuant to Annex “C”
of the Agreement shall be apportioned according to the following proportions:
a. Bosnia and Herzegovina -
10%;
b. The Federation of Bosnia
and Herzegovina - 58%;
c. The Republika Srpska -
29%; and
d. Brčko District of Bosnia
and Herzegovina - 3%.
Upon the instruction issued by the Ministry of Finance and Treasury of Bosnia
and Herzegovina, the financial assets received according to the Agreement shall
be apportioned in accordance with the proportions as specified in paragraph 1 of
this Article.
Article 9
(Purpose of the Financial Assets)
The financial assets obtained under the Agreement, allocated for the needs of
Institutions of Bosnia and Herzegovina shall be used, inter alia, for the
settlement of the liabilities arising from Annex “C” to the Agreement, and for
other purposes as may be decided by the Council of Ministers of Bosnia and
Herzegovina.
The Entities and Brčko District of Bosnia and Herzegovina shall use the
financial assets obtained in accordance with this law for the settlement of
liabilities arising from Annex “C” to the Agreement, including for the
settlement of liabilities for frozen foreign currency accounts in accordance
with applicable law and for other purposes, as decided by the respective
governments.
Article 10
(Distributed Assets)
The settlement and transfer of the funds previously distributed in accordance
with the Decision on the Temporary Distribution of One Part of Assets of
Bosnia and Herzegovina Obtained under the Agreement on the Succession Issues
(“Official Gazette of Bosnia and Herzegovina,” no. 34/09), according to which
the amount of KM 170,892,841.07 was allocated between the Federation of Bosnia
and Herzegovina and Republika Srpska, shall be returned to the Institutions of
Bosnia and Herzegovina and the Brčko District of Bosnia and Herzegovina in the
corresponding ratios prescribed by Article 8 of this Law.
According to aforementioned Decision, 111,080,346.70 KM was made available to
the Federation of Bosnia and Herzegovina and the amount of 59,812,494.37 KM was
made available to Republika Srpska. In accordance with the final apportionment
ratios prescribed by Article 8 of this Law, the Federation of Bosnia and
Herzegovina received 11,962,498.88 KM in excess of its specified share and
Republika Srpska received 10,253,570.46 KM in excess of its specified share.
The return of the excess funds received by the Federation of Bosnia and
Herzegovina and Republika Srpska in accordance with this Article, and the
settlement of the final apportionment of financial assets on behalf of the
Institutions of Bosnia and Herzegovina and Brčko District of Bosnia and
Herzegovina specified by Article 8 shall be implemented through the current
revenues within the Single Account of the Indirect Taxation Authority in the
following manner:
a. 17,089,284.11 KM shall be
reallocated to the Institutions of Bosnia and Herzegovina;
b. 5,126,785.23 KM shall be
reallocated to the Brčko District of Bosnia and Herzegovina.
The Central Bank of Bosnia and Herzegovina shall allocate and transfer any
remaining financial assets specified by the Decision on the Temporary
Distribution of One Part of Assets of Bosnia and Herzegovina Obtained under the
Agreement on the Succession to the Institutions of Bosnia and Herzegovina,
the Federation of Bosnia and Herzegovina, Republika Srpska and the Brčko
District of Bosnia and Herzegovina, in the ratios prescribed by Article 8 of
this law.
Article 11
(Dynamics for Realization of Settlement)
The amounts due from the Federation of Bosnia and Herzegovina and Republika
Srpska, as established in Article 10 of this law, shall be deducted from the
Single Account of the Indirect Taxation Authority belonging to the Entities and
allocated on a daily basis between 1 January 2010 and 31 March 2010 to the
accounts of the Institutions of Bosnia and Herzegovina and the Brčko District of
Bosnia and Herzegovina.
The Director of the Indirect Taxation Authority shall be responsible for the
execution of the settlement as defined by the provisions of Articles 10 and
11.
Article 12
(Entry into force)
This Law shall enter into force forthwith and shall be published in the
“Official Gazette of Bosnia and Herzegovina” without delay.
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