European Commission on BiH: No progress in judiciary, socio-economic reforms and fight against corruption

(Patria) - The European Commission has published key parts of the 2023 Report on Bosnia and Herzegovina. The conclusion is that the European Commission did not recommend to the European Council to open negotiations with BiH, nor will such a decision be considered at the December session. The next progress report will be published in March 2024.

The Commission recalls that the General Elections were held in October 2022 and that the High Representative intervened several times in the election law, including on election night, which, according to the OSCE/ODIHR, called into question legal certainty.
All legislative and executive bodies at the state and entity level were established by May 2023. The new Council of Ministers at the state level took office at the end of January, with the support of the ruling coalition including SNSD, HDZ BiH and the 'troika' (SDP, NiP, Naša stranka). In March, the state budget for 2023 was adopted. The new Council of Ministers took significant steps in adopting EU reforms after the granting of candidate status: it adopted a strategy on organised crime, an updated risk assessment and accompanying action plan for combating money laundering and terrorist financing, as well as strategies and action plans on migration and terrorism. It also appointed a supervisory body for implementing the national strategy for processing war crimes. The contact point with Europol finally began operating in June 2023. The Council of Ministers also adopted a set of draft laws, notably on: integrity in the judiciary; prevention of torture (designating the Ombudsman as the national preventive mechanism); foreigners; and freedom of access to information. Parliament adopted them in August and September 2023.

Constitutional Court of BiH and ECtHR rulings

A number of decisions of the Constitutional Court of BiH have yet to be fully implemented, including on state property. The Constitutional Court has suspended or annulled several legal and political acts of the Republika Srpska entity. The entity leadership is committed to implementing such laws, however, undermining legal certainty. The entity assembly called on state-level constitutional judges to resign, and in June 2023 legalised the non-publication of High Representative decisions and non-implementation of Constitutional Court decisions, calling into question the authority and integrity of the Constitutional Court and violating the constitutional and legal order of the country. The assemblies of both entities should promptly appoint judges to vacant judicial positions and ensure the full composition of the Constitutional Court.
Constitutional and electoral reforms are still needed to align the Constitution with the European Convention on Human Rights, in accordance with the Sejdić-Finci court ruling.

No socio-economic reforms

No steps have been taken to develop socio-economic reforms in line with the Commission's recommendations and the joint conclusions of the economic and financial dialogue. Continued protectionist measures are a concern in the implementation of the SAA. Political dialogue within the SAA was resumed after its political blockade in 2021-2022. Bosnia and Herzegovina has still not drawn up a national plan for the adoption of the EU acquis (NPAA), as required by the SAA.
Some progress has been made in alignment with the Common Foreign and Security Policy (CFSP). Bosnia and Herzegovina has significantly improved its alignment with EU foreign policy. Entity authorities and parties of Republika Srpska advocated a neutral stance on Russia's aggression against Ukraine, challenging the country's alignment with EU statements and obstructing the full implementation of restrictive measures against Russia. Bosnia and Herzegovina has initiated the ratification of two regional mobility agreements, and the same should be done for the agreement on free travel with ID cards.

Bosnia and Herzegovina is at an early stage of preparations and has made some progress in public administration reform (PAR). Some positive steps have been taken by adopting arrangements for coordinating public administration reform (the 'joint platform'), including a political decision-making body; implementing comprehensive public financial management across the country, improving capacity for public consultations at the state level and regulatory impact assessment in the Republika Srpska entity, adopting a human resources management strategy in the Federation entity, improving professional training and performance evaluation in the Federation entity and at the state level, and adopting the Law on Freedom of Access to Information, aimed at encouraging proactive publication and transparency.
Bosnia and Herzegovina needs to complete substantive steps to improve the overall functioning of public administration by ensuring a professional and depoliticised civil service and a coordinated approach to policy-making at the country-wide level.

Judiciary without reforms, no progress in fight against corruption

Bosnia and Herzegovina is at an early stage of preparations when it comes to the judiciary. Some progress has been 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 for verifying asset declarations of judges, prosecutors and HJPC members, but with changes compared to the version on which the Venice Commission was consulted. Such changes hinder the effectiveness of the asset declaration system and therefore need to be supplemented. The Council of Ministers also appointed a new supervisory body to oversee the implementation of the national strategy for war crimes. The independence and impartiality of the judiciary have not improved. The executive and legislative branches have not adopted additional protective measures. Inconsistency and overly broad discretion persist in the application of rules on appointment, disciplinary responsibility, career advancement and conflict of interest of judges and prosecutors. Persistent and evident signs of deterioration still require urgent measures to strengthen integrity and restore public trust in the judiciary. The poor functioning of the judicial system continued to undermine the enjoyment of citizens' rights and the fight against corruption and organised crime.
Bosnia and Herzegovina is between an early stage and a certain level of preparedness in preventing and fighting corruption and organised crime. No progress has been made in the fight against corruption. Some progress has been made in the fight against organised crime. The Council of Ministers adopted a strategy on organised crime, a strategy and action plan for combating terrorism, an updated risk assessment and accompanying action plan for combating money laundering and terrorist financing.

The contact point for cooperation with Europol began operating in June 2023. The Ministry of Justice has yet to submit to the Council of Ministers for adoption a draft state law on preventing conflicts of interest in line with European standards. Although there have been some indictments related to high-level corruption, overall results in preventing and combating corruption (including at the high level) remain insignificant due to operational inefficiency and political interference. There are systemic shortcomings in operational cooperation between law enforcement agencies in the fight against organised crime, due to unaligned criminal legislation, weak institutional coordination and very limited intelligence exchange. Criminal organisations exploit legal and administrative loopholes.

The police are susceptible to political interference. Financial investigations and asset confiscation are also largely ineffective. A proactive approach remains essential to curb criminal infiltration in political, legal and economic systems. Cooperation with Eurojust and the European Public Prosecutor's Office (EPPO) has yet to be strengthened. Building on some operational successes in 2023, Bosnia and Herzegovina should continue its efforts in the fight against terrorism and drug trafficking and must increase its capacities for this. A new law on preventing money laundering and terrorist financing is urgently needed.

There has been a regression in guaranteeing freedom of expression and media freedom through protecting journalists from threats and violence and ensuring the financial sustainability of the public RTV system. Criminal penalties for defamation, reintroduced in the Republika Srpska entity in July 2023, seriously affect the environment for civil society and limit freedom of expression and media.

In September 2023, a draft law targeting civil society groups as 'foreign agents' was also adopted in the first reading in the Assembly of the Republika Srpska entity; 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. In September 2023, the Law on Foreigners was adopted. Major weaknesses continue to 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 the strategy and action plan for 2024-2029 in a timely manner.
Regarding economic criteria, Bosnia and Herzegovina is at an early stage of establishing a functioning market economy. Cooperation and coordination of economic policy-making at the state level and among entities have further deteriorated. As a result, the country's internal market remains fragmented, negatively affecting the business environment. Unemployment remains very high, and labour migration continues. The country's Economic Reform Programme (ERP) remains of poor quality, and the implementation of reforms is limited.
The quality of education has remained low, and the country continues to lag in the energy and digital transition. In response to changes in global demand, there has been some structural adjustment, with a focus on value-added services such as trade, IT and tourism. Economic integration with the EU remains high, but overall trade is below potential.

During the reporting period, limited progress was made in most chapters of the EU acquis.

Ethnic voting procedures in the Competition Council and the State Aid Council should be abolished, and a financial stability fund should be established as part of the framework for addressing bank problems. This cluster is crucial for Bosnia and Herzegovina's preparations to meet the requirements of the EU single market and is very important for early integration 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.