The freeze on privatisation was imposed in the RS and the Federation to prevent illegal privatisation. The freeze on privatising socially-owned apartments in the Federation remains in place.

Many individuals living in unclaimed apartments had succeeded in illegally revalidating their contracts on the use of apartments, which they had received during the war and post-war period and which were canceled by the High Representative in 1999. Further, based on the illegal revalidation they managed to privatise the apartments. In this way, a large number of apartments which under the law are to be used as alternative accommodation were lost.

The High Representative had frozen the privatisation of socially owned apartments, in both Entities, until such time as commissions are established to review the revalidation of cancelled occupancy rights and issuance of new occupancy rights to socially owned property made after 1 April 1992. On 9 March this year the RS Ministries of Urbanism & Refugees and Displaced Persons published in the official Gazette of the RS an instruction setting up these commissions. By doing this, the RS authorities will ensure that only those who meet the legal criteria under the property laws are able to remain in these unclaimed apartments. The Commissions are made up of representatives from both of these ministries, and will operate in co-operation with the RS Public Defender's Office. A further amendment to an earlier instruction issued by the RS authorities also ensures that those individuals who were forced from their homes between 1992 and 1995, but who never left their municipality of residence (so-called "floaters"), have the same rights to discounts as other displaced persons and refugees under the RS privatisation law.

In lifting the freeze, the High Representative also amended the gazetted instruction. The amendment exempts from review those apartments where the occupancy right has been passed to a legal successor, for example through the death of the original occupancy right holder, where the original occupancy right was issued prior to 1 April 1992.  It also exempts cases where new occupancy rights have been issued because the original occupancy rights were destroyed or where the name of the allocation right holder has changed.

The temporary freeze effected roughly 25% of the RS housing stock. The High Representative is pleased with the level of co-operation and determination shown by the RS Ministries of Urbanism and Refugees and Displaced Persons in resolving this issue together with the OHR and OSCE. The High Representative notes that constructive talks have been held with the Federation Ministry of Urbanism, and he therefore looks forward to the speedy resolution of this issue in the Federation.