New Decree on Exercising Authority in Companies with State Capital Participation Adopted

The FBiH Government today adopted and sent to the FBiH Parliament the Bill on State Capital Management in Companies in FBiH. By adopting this Bill, the FBiH Government has complied with the ruling of the Constitutional Court of FBiH on the request of the FBiH Vice President Milan Dunović, which determined that the Decree adopted on 3.11.2015 was unconstitutional, reports the BiH news agency Patria.

According to the provisions of the Law, in the Federation of BiH, authorities based on state capital participation in companies are exercised by the Federation of BiH, cantons, cities, and municipalities within their jurisdictions. In companies with state capital participation where authorities based on state capital participation are exercised by municipalities, cities, and cantons, these authorities are regulated by their own regulations by municipalities, cities, and cantons, each within their own jurisdiction.

A company with one hundred percent state capital participation may be founded by a special law, and the Federal Government may establish such a company when it assesses that it is in the interest of FBiH or for the business of companies with state capital participation.

The FBiH Government directly exercises authorities based on state capital participation in companies with state capital participation, through participation in the work and decision-making of the assembly, selection and nomination of candidates for the appointment of supervisory board members and the dismissal of supervisory board members, and by giving consent for the appointment of management board members and the dismissal of management board members. The Government, through federal administrative bodies and federal administrative organizations, carries out registration, administrative supervision, and oversight of general acts, work monitoring, and reporting to the FBiH Government.

The Federal Government adopts a decision determining the List of companies in which it exercises authority based on state capital participation within the jurisdiction of FBiH. The Government may transfer the exercise of authority based on state capital participation in a company from federal to another level of government, with the mandatory prior consent of the FBiH Parliament and the competent authority of the level of government to which the authorities are transferred. It may also transfer the exercise of authority in a company from the jurisdiction of other levels of government to the jurisdiction of FBiH, also with the consent of the relevant authorities.

The procedure for the selection and nomination of candidates for the appointment of supervisory board members, on behalf of state capital, in accordance with the provisions of the Law on Ministerial, Government, and Other Appointments of FBiH, is initiated by the Federal Government by a decision to announce a public competition. Exceptionally, without conducting the procedure, the Government may determine a proposal of candidates for the appointment of acting supervisory board members on behalf of state capital who are appointed until the completion of the competition procedure.

The selection of candidates for management board members of a company with majority state capital participation is carried out by the body determined by the statute of that company based on a published public competition in accordance with the general and specific conditions established by law and the company's statute.

New Decree Adopted

The FBiH Government, at today's session, adopted the Decree on Exercising Authority in Companies with State Capital Participation within the Jurisdiction of the Federation of BiH, which regulates the exercise of authority based on state capital participation in companies within the jurisdiction of FBiH, administrative supervision, oversight of general acts, and special provisions on the procedure in registers.

The Decree will be applied until the adoption of the Law on State Capital Management in Companies in the Federation of BiH.

In companies with state capital participation within the jurisdiction of the Federation, authorities based on state capital participation are exercised by the FBiH Government, directly or through federal administrative bodies (federal ministries and federal administrations) and federal administrative organizations.

In companies with state capital participation within the jurisdiction of the Federation, the Federal Government directly exercises authorities related to participation in the work and decision-making of the assembly, selection and nomination of candidates for the appointment of supervisory board members and dismissal of supervisory board members before the expiry of their term, and giving consent for the appointment of management board members and dismissal of management board members before the expiry of their term.

In companies with state capital participation within the jurisdiction of the Federation, the Government, through federal administrative bodies and federal administrative organizations, carries out tasks of registration, administrative supervision, and oversight of general acts, work monitoring, and reporting by federal administrative bodies and federal administrative organizations to the FBiH Government.

The Federal Government determines the list of companies in which it exercises authority based on state capital participation within the jurisdiction of the Federation. The list assigns federal administrative bodies and federal administrative organizations the responsibility for monitoring work, exercising supervision, and submitting reports to the FBiH Government for each company with state capital participation within the jurisdiction of the Federation. The list is an integral part of this decree and includes 53 companies.

This decree regulates the direct authorities of the FBiH Government in companies with state capital participation within the jurisdiction of the Federation, which include participation in the work and decision-making of the company's assembly, selection and nomination of candidates for the appointment of supervisory board members and dismissal of supervisory board members before the expiry of their term, and giving consent for the appointment of management board members and dismissal of management board members of companies with majority state capital participation.

The Decree also defines the authorities that the FBiH Government exercises through federal administrative bodies and federal administrative organizations in companies with state capital participation within the jurisdiction of the Federation. Federal administrative bodies and federal administrative organizations that, on behalf of the FBiH Government, exercise authorities related to registration, administrative supervision, oversight of general acts, work monitoring, registration of the initial composition, and registration of each new appointment and dismissal of supervisory board and management board members of companies from the List, may do so exclusively if the applicant for registration of changes, in addition to other required documents, provides the relevant act of the FBiH Government specified in this decree.

The Decree also includes penalty provisions that will be applied for non-compliance with its provisions.

Supervision over the implementation of this decree is carried out by the FBiH Government.

Companies on the List are obliged to align the provisions of their statutes with this decree within 60 days of its entry into force.