Federation waits years for Bankruptcy Law, while Republika Srpska saved 600 jobs with the same law

SARAJEVO, (Patria) - The Federation of Bosnia and Herzegovina is still waiting for a new Bankruptcy Law. At the session of the House of Representatives of the FBiH, held in mid-February, after a heated debate, the bill was once again not adopted. Among the reasons for non-adoption are the duration of the bankruptcy proceedings and the number of proceedings that a bankruptcy trustee can conduct.

Meanwhile, Republika Srpska is recording positive results in resolving bankruptcy problems by applying the new Bankruptcy Law. Since 2016, when the new law was adopted, 260 cases have been resolved to date, increasing the number of concluded cases by 186%. The duration of bankruptcy proceedings has been shortened from 59 to 16 months for companies with assets, and to 12 months for other companies. During less than four years of applying the new Bankruptcy Law, the monetization of assets has increased by 13% and amounts to as much as 61%.

The most significant result of the bankruptcy reform is considered to be restructuring, which aims to save companies and jobs. In Republika Srpska, from 2016 to the present day, 6 companies have been restructured, during which over 600 jobs have been saved.

Why is the Federation of BiH delaying the adoption of the proposed new legal solution, the text of which is harmonized with the adopted Bankruptcy Law in Republika Srpska and Brčko District? What relief would the new Law bring to workers and companies entering the bankruptcy process in the Federation of BiH?

"The new bankruptcy law would significantly speed up the process, as we see from the examples from Republika Srpska," believes Hakija Zajmović, bankruptcy judge and president of the Association of Judges of the Federation of BiH. "We in the Federation of BiH urgently need a new Bankruptcy Law to speed up work, restructure companies where possible, and save jobs where conditions allow. Also, the new law will maximally protect the rights of workers, as the amendments stipulate that all claims of workers arising from employment in the total gross amount will be placed in a higher payment order," concluded Zajmović.

The new Bankruptcy Law in the FBiH will maximally protect the rights of workers, regulate pre-bankruptcy and bankruptcy proceedings, enable the reorganization of the bankruptcy debtor, regulate international bankruptcy, and contribute to the creation of a positive investment climate.