FBiH Government Sends Proposal for Amendments to the Electricity Law into Urgent Procedure

The Government of the Federation of BiH today adopted the Proposal for Amendments to the Electricity Law and forwarded it to the FBiH Parliament for adoption under urgent procedure.

One of the amendments pertains to the deletion of paragraph 9 from Article 116 of the Law, which regulated that the Ministry would exercise powers based on state capital in existing electric power companies and in companies arising after the restructuring of the energy sector.

Among the reasons for this amendment, it is stated that the Electricity Law should regulate only the area of the energy sector. Article 4 of the Law has been expanded with a provision that the energy strategy of the Federation of BiH is developed in accordance with international norms and standards of the European Union, including environmental standards and principles of environmental protection.

Amendments have also been made in the part of the Law relating to penal provisions and have been aligned with the Law on Misdemeanors.

In the Proposal for Amendments to the Law on the Allocation of Public Revenues in the FBiH, adopted at today's session of the FBiH Government and forwarded to the parliamentary procedure under urgent procedure, one of the novelties is that 51.23 percent, instead of the previous 51.48 percent, of revenues from the Single Account is prescribed for financing cantonal functions.

A provision has also been added that 0.25 percent of revenues is allocated for financing the functions of the City of Sarajevo. Furthermore, the coefficient reflecting the special needs of the Sarajevo Canton has been changed from 2.0000 to 1.9658.

The key reason for the urgent parliamentary procedure is that the Proposal for Amendments to the Law is in accordance with the ruling of the Constitutional Court of the Federation of BiH of June 10, 2015, which established a violation of the right to local self-government of the City of Sarajevo guaranteed by the provisions of the Constitution of the Federation of BiH, the European Charter of Local Self-Government, and the Law on Principles of Local Self-Government in the Federation of BiH. Based on the new legal solution, the City of Sarajevo is included in the direct distribution of revenues from indirect taxes collected on the Single Account.

With the entry into force of the amendments to the Law, all municipalities of the Sarajevo Canton, to which the corresponding funds based on indirect taxes were previously transferred from the budget of the Sarajevo Canton, are included in the direct distribution of revenues from indirect taxes. In this way, the municipalities of the Sarajevo Canton have been placed in an equal position with others in the Federation of BiH.

Given the complexity of the functioning of the single account system and the distribution of revenues among users in the Federation of BiH, the proposed harmonized solution is the result of two years of work by the interdepartmental working group for the analysis and preparation of solutions in the area of the allocation of public revenues in the Federation of BiH.