What the decisions made by Schmidt specify: The debt of Viadukt will be paid with money belonging to the entity of RS

(Patria) - High Representative in BiH Christian Schmidt imposed a decision adopting the Law on Amendments to the Law on Financing of Institutions of Bosnia and Herzegovina (“Official Gazette of Bosnia and Herzegovina” no. 61/04, 49/09, 42/12, 87/12, 32/13 and 38/22).

The decision adopting the Law on Amendments to the Law on Financing of Institutions of Bosnia and Herzegovina enters into force immediately and is published immediately on the official website of the Office of the High Representative and in the “Official Gazette of Bosnia and Herzegovina”.

The Law on Amendments to the Law on Financing of Institutions of Bosnia and Herzegovina, which forms an integral part of this Decision, enters into force in the manner prescribed by Article 10 of the said law, on a temporary basis, until the Parliamentary Assembly of Bosnia and Herzegovina adopts it in the prescribed form.

After the implementation of the instruction provided for in paragraph 7 of this Decision, the reasons justifying the withholding of the profit payment of the Central Bank of Bosnia and Herzegovina will be considered non-existent, and accordingly, the profit funds will be distributed in accordance with the relevant provisions of the Law on the Central Bank of Bosnia and Herzegovina (“Official Gazette of Bosnia and Herzegovina”, no. 1/97, 29/02, 8/03, 13/03, 14/03, 9/05, 76/06 and 32/07”.

The profit of the Central Bank of Bosnia and Herzegovina determined by the Management Board of the Central Bank is distributed as follows:
– To the Central Election Commission of Bosnia and Herzegovina in the amount provided for in the Final Report on the implemented pilot projects for the introduction of new technologies in the election process in Bosnia and Herzegovina and the feasibility study for the introduction of specific election technologies in the election process of Bosnia and Herzegovina of February 28, 2025. This distribution will serve to cover all costs of procurement of election technologies that are being introduced for the needs of the General Elections in 2026.

Funds remaining after the distribution made in accordance with paragraph 3 of this Decision will be allocated to the budget of the institutions of Bosnia and Herzegovina and international obligations of Bosnia and Herzegovina for 2025, in favor of the institutions of Bosnia and Herzegovina.

After the submission of the specified budget request by the Central Election Commission of Bosnia and Herzegovina, the Minister of Finance and Treasury of Bosnia and Herzegovina will be obliged to make the requested funds available without delay on the relevant or dedicated accounts, regardless of the status of the budget adoption procedure for the institutions of Bosnia and Herzegovina and international obligations of Bosnia and Herzegovina for 2025. If the minister does not make the distribution within seven (7) days of receiving the relevant request, the deputy minister will be obliged to make the said distribution.

The amount determined in accordance with this Decision will be included in the proposal as well as in the budget of the institutions of Bosnia and Herzegovina and international obligations of Bosnia and Herzegovina for 2025.

Notwithstanding the intended purpose of road toll revenues prescribed by Article 21, paragraph (3) of the Law on the Indirect Taxation System in Bosnia and Herzegovina (“Official Gazette of Bosnia and Herzegovina”, no. 44/03, 52/04, 32/07, 34/07, 4/08, 50/08, 49/09, 32/13 and 91/17), and solely for the purpose of implementing the Decision of the International Centre for Settlement of Investment Disputes (ICSID) in case no. ARB/16/36 – Viaduct d.o.o. Portorož, Vladimir Zevnik and Boris Goljevšček v. Bosnia and Herzegovina of April 18, 2022, including the subsequent ICSID decision of May 1, 2024, an amount of 120 million convertible marks, which should approximately correspond to the obligation established in these decisions, including the principal debt, interest, and procedural costs, is deducted from the accumulated reserve amount for settlement from road toll revenues held in a special account of the Central Bank of Bosnia and Herzegovina. This deduction will be considered an amount corresponding to the share of Republika Srpska and will be transferred to the Ministry of Finance and Treasury of Bosnia and Herzegovina solely for the purpose of implementing the ICSID decision as stated herein.

After the transfer of the said funds to the account provided by the Ministry of Finance and Treasury of Bosnia and Herzegovina, these funds will be considered available to the enforcement applicant (Viadukt et al) and no additional interest will be calculated or paid, in accordance with this Decision. The Minister of Finance and Treasury of Bosnia and Herzegovina will, acting with due diligence, disburse these funds without delay upon receipt of a valid request from the enforcement applicant.

The Central Bank of Bosnia and Herzegovina will transfer to the Ministry of Finance and Treasury of Bosnia and Herzegovina an equivalent amount from the same source which will be immediately allocated to the Federation of Bosnia and Herzegovina. If the minister does not distribute the funds within seven (7) days of receiving a valid request, or upon receiving account details from the Ministry of Finance of the Federation of Bosnia and Herzegovina, the deputy minister is obliged to distribute the funds.

The Legal Affairs Directorate of Bosnia and Herzegovina, the Central Bank of Bosnia and Herzegovina, and BHANSA will immediately undertake activities to suspend enforcement proceedings against the financial interests and assets of Bosnia and Herzegovina and its institutions.

The amounts paid to the enforcement applicant in accordance with paragraph 7 of this Decision, as well as any remaining amount of 120 million convertible marks, which will be used to settle all procedural costs incurred from the budget of the institutions of Bosnia and Herzegovina and international obligations of Bosnia and Herzegovina, will not be considered a future claim of Republika Srpska from the account intended for road toll collection or from the Federation of Bosnia and Herzegovina or Brčko District of Bosnia and Herzegovina. The amounts paid in this way will be considered spent by Republika Srpska, and all funds necessary for achieving the purposes prescribed by the Law on the Indirect Taxation System in Bosnia and Herzegovina, in the amount whose payment was made in accordance with paragraph 7 of this Decision, will be secured from the own financial resources of Republika Srpska, including its budget.

After the Management Board adopts the methodology for the distribution of road toll revenues in accordance with the Law on the Indirect Taxation System in Bosnia and Herzegovina (“Official Gazette of BiH”, no. 55/04, 34/07, 49/09 and 91/17), necessary settlements between the entities and Brčko District of Bosnia and Herzegovina will be made, taking into account the amounts paid in accordance with paragraph 7 of this Decision. In the event that a larger amount from the settlement reserve is paid due to the implementation of the ICSID Decision than would be due to Republika Srpska after the final settlement based on the methodology for the distribution of road toll revenues adopted by the Management Board, road toll revenues will not be distributed to Republika Srpska until any claims of the Federation of Bosnia and Herzegovina and Brčko District of Bosnia and Herzegovina are fully settled, which the Indirect Taxation Administration is obliged to implement independently of additional orders or instructions from competent authorities.

Schmidt also imposed the Law on Amendments to the Law on Financing of Institutions of Bosnia and Herzegovina:

Article 1.

In the Law on Financing of Institutions of Bosnia and Herzegovina (“Official Gazette of Bosnia and Herzegovina”, no. 61/04, 49/09, 42/12, 87/12, 32/13 and 38/22), Article 2 (Definitions), paragraph (1), point j) is amended to read:

“j) Expenditures: represent a reduction in budget resources and include, among others: current expenses (salaries and employee benefits, material costs and services, insurance costs, banking services and contracted services), all debt servicing, as well as servicing of financial obligations from final and enforceable court decisions or final and enforceable decisions of other relevant bodies, in which Bosnia and Herzegovina is determined as the debtor, current grants, capital expenditures, grants awarded to other levels of government, subsidies, and donations.”

Article 2.

In Article 8 (Budget Content), paragraph (2), point b), sub-point 3 is amended by adding the following text at the end of the existing provision, which reads:

“including data on servicing financial obligations from final and enforceable court decisions or final and enforceable decisions of other relevant bodies, in which Bosnia and Herzegovina is determined as the debtor, if the execution of such an obligation is made from the budget of the institutions of Bosnia and Herzegovina and international obligations of Bosnia and Herzegovina.”

Article 3.

Article 14 (Expenditures) is amended by adding a new paragraph (9), which reads:

“(9) In cases where Bosnia and Herzegovina is determined as the debtor in accordance with a final and enforceable court decision or a final and enforceable decision of other relevant bodies, made on the basis of an international bilateral or multilateral agreement to which Bosnia and Herzegovina is a signatory, by which the obligation itself is based on an investment or commercial contractual relationship between the authorities of an entity, Brčko District of Bosnia and Herzegovina, or a lower level of government with a foreign investor, and it is a result of the action or inaction of that authority as determined by the said decision, the authority responsible for such action or inaction (hereinafter: the actual debtor) is obliged without delay, and no later than thirty (30) days from the date of finality and enforceability of the said decision, to secure the funds necessary for the execution of that decision or to directly settle the financial obligation to the enforcement applicant. Expenditures on account of the execution of these financial obligations may be realized through the Central Bank of Bosnia and Herzegovina, using funds secured in accordance with paragraph (7) of this Article and Article 13, paragraph (3) of this Law, based on the contract from paragraph (8) of this Article.”

Article 4.

After Article 14, a new Article 14a is added, which reads:

“Article 14a

(Contract with a Foreign Investor)

When concluding contracts with foreign investors, regardless of whether the foreign investor has a registered legal entity in Bosnia and Herzegovina, the Federation of Bosnia and Herzegovina, Republika Srpska, Brčko District of Bosnia and Herzegovina, or an authority at any other level of government, they are obliged to include a provision in the contract that explicitly and unambiguously stipulates that the responsibilities for any damage arising from such a contract will be borne exclusively by the contracting authority in question.”

Article 5.

This Law enters into force on the eighth day from the date of publication on the official website of the Office of the High Representative or one day after publication in the “Official Gazette of Bosnia and Herzegovina”, whichever of these two dates occurs first.