Sjednice
Council of Ministers of Bosnia and Herzegovina Holds Its 54 Session
07/04/2024
The Council of Ministers of BIH defined unanimously a Draft Law on Budget of BIH Institutions and International Obligations of BIH for year 2024, with correction made at the session, referring, inter alia, to increase of the Ministry of Defence budget for KM 1,750,000 relevant to originally planned resources, and increase of the BIH Presidency budget for KM 500,000.
Simultaneously, the Ministry of Security budget was decreased for KM 950,000 relevant to initially planned funds, to the Veterinary Office for KM 500,000, and the Institute for Execution of Sanctions, Detention and Other Measures, for KM 800,000.
The Ministry of Finance and treasury will provide the Draft Budget immediately to the BIH Presidency, authorised for proposing thereof to the BIH Parliamentarian Assembly, which finally adopts the Budget, with a proposal for an urgent consideration.
The total revenues, receivables and funding of BIH Institutions within 2024 Budget are KM 1,355,400,000, as increased for KM 40 million relevant to 2203 Budget of BIH Institutions. Indirect Tax revenues are planned to amount KM 1,020,500,000, same as the previous year, when they were increased for about Km 155 million, relevant to the 2022 Budget. Among finance sources there are non-taxable revenues of BIH Institutions in amount of KM 248,049,000, which is an increase of about 95.9 million, compared with the year before.
The total expenditures of BIH Institutions are KM 1,355,400,000 and are higher for 3% relevant to the previous year, while BIH foreign debt servicing in 2024 Budget amounts to KM 2,786,133,053, which is an increase for KM 224,766,691 or 9.1% relevant to 2023.
The Draft Budget supports, as a priority, continuation of reforms and fulfilment of conditions for the European Partnership, and Stabilisation and Accession Agreement implementation. Among priorities there os an increase of the Ministry of Defence budget for KM 1,750,000 relevant to initially planned funds; these resources will enable a smooth operation of the Ministry and its participation, together with other Ministries and Institutions of the Council of Ministers, in programmes and activities under the Partnership for Peace (PfP) and other forms of cooperation with NATO.
Previously, the Council of Ministers of BIH adopted a Framework Budget Document (FBD) of Institutions of Bosnia and Herzegovina for 2024-2027, harmonised with the Global Framework of Fiscal Balance and Policies in BIH for relevant time period, adopted by the Fiscal Council of BIH on January 23,2024.
The Ministry of Finance and Treasury will publish the FBD 2024-2027 at its web site.
FINANCIAL SUPPORT TO PROECTS IN BIH
The Council of Ministers of BIH took the Ministry of Communications and Transport-proposed four decisions, by which it will supports, though KM 62 million, road infrastructure projects, development of telecommunications and ITC society sectors, as well as financing of infrastructure projects in Bosnia and Herzegovina.
It is about a decision on defining of purpose of a part of funds collected from licences for use of radiofrequency spectrum for service provision through mobile access centres of total value of KM 50 million. So, defined were beneficiaries and purpose of KM 15,750,000 for projects of development of information and communication society sector in BIH, and KM 34,250,000 for transport development projects in BIH.
Within a part referring to ICT sector, for integration of SDH and optical networks of the Electro-distribution of Bosnia and Herzegovina, intended was 2,000,000, for improvement of security and e-Government system KM 1,750,000, and for realisation of project “Financing of Services of Extension and Maintenance of Integrated Video-Surveillance System of the BIH Border Police and Automatic Recognition of Car Plats System at BIH Border Crossings” it was planned KM 1,250,000.
For development of a portal and data base on infrastructure projects intended was KM 500,000, for implementation of a Framework Strategy of Broadbank access in BIH it was planned 1,250.000, and for digital transformation projects it was planned for the Federation of BIH 5,535,000, for Republika Srpska 3,375,000, and for the Brčko district of BIH KM 90,000.
Funds for traffic development in BH were distributed, so that for reconstruction of inter-government bridge Brčko (Bosnia an Herzegovina) – Gunja (Republic of Croatia) intended was KM 5,000,000, for reconstruction of Novi Grad (Bosnia and Herzegovina) - Dvor (Republic of Croatia) bridge intended was Km 5,000,000, and for improvement of navigable part of the Sava River at Jaruge – Novi Grad site intended was KM 1,000,000.
A decision was made on defining purpose for funds deposited at special purpose account for road transport improvement projects in total amount of KM1,130,086. Funds are distributed for setting-up electronic register in road transport (KM 600,000), for setting-up data base of traffic accidents, homologation, certification of vehicles and catalogues of questions for test taking for drivers’ licences (KM 400,000), and for tachograph informatics system (KM 130,086.53).
A decision taken today on use of transferred special purpose funds from allocated licence for universal mobile telecommunication systems, defining the use of a part of transferred funds paid in during 2014 and 2015 in total amount of KM 4,451,852.59. These funds are intended for development of telecommunications sector, and pursuant to the Decision, are allocated to the Government of the Federation of BIH (KM 2,737,889.28), Government of Republika Srpska (KM 1,669,444.69), and Government of the Brčko district of BIH (Km 44,518.53).
The Council of Ministers of BIH took a decision on use of a part of accumulated surplus revenues over expenditures of the Communications Regulatory Agency of Bosnia and Herzegovina, realised conclusive to Dec.31, 2021, in total amount of KM 6,578,241.66.
The funds were intended for support to development and improvement of communications sector in BIH and are allocated to the Government of the Federation of BIH (KM 4,045,618.62), Government of Republika Srpska (KM 2,466,840.62), and to Government of the Brčko District of BIH (65,782.42).
NO SALARY OR VACATION ALLOWANCE IN BIH INSITUTTIONS IN 2024
The Council of ministers f BIH adopted the Ministry of Finance and Treasury-proposed several decisions on a level of base salary and of vacation allowance to employees in Institutions of Bosnia and Herzegovina for 2024, without an increase relative to 2023.
The level of base salary remains, as in 203, KM 600, and vacancy allowance is in amount of KM 40.
For the purpose of improvement of material standing of employees and considering requests by representative trade unions of employees in BIH institutions, per diem for official trip inside the country was corrected from KM 25 to KM 40.
GRANT FOR STRENGTHENING OF CAPACITIES OF REPUBLIKA SRPSKA GOVERNMENT
The Council of Ministers of BIH defined a Proposal Grant Agreement TF0C4163 – Surveillance Over Public Companies in Bosnia and Herzegovina Project between Bosnia and Herzegovina and the International Bank for Reconstruction and Development, International Development Association, acting as administrator of a multi-donor roof trust fund for financial management.
It is a USD 800,000 grant intended for strengthening of capacities of the Government of Republika Srpska for data collection and surveillance over public companies. The funds are earmarked for strengthening of ICT with the Secretariat-General of the Government of Republika Srpska. The Proposal Agreement with Platform for its conclusion will be passed to the BIH Presidency for further decision-taking procedure, with a proposal for the Minister of Finance and Treasury to act as the BIH signatory thereof.
SECURED ADDITIONAL EUR 5 MILL. FOR ILIDŽA-HRASNICA TRAM LINE
The Council of Ministers of BIH defined a Proposal Contract No. 1 on Amendment to Loan Contract, singed on Feb. 1, 2023 (GrCF2 W2 E2- Tram Line Ilidža - Hrasnica) between Bosnia and Herzegovina and the European Bank for Reconstruction and Development, with proposition for the Minister of Finance and Treasury as the BIH signatory. The Proposal Contract will be provided to the BIH Presidency.
It is about EUR five million additional borrowing with allocation to the Federation of BIH, Sarajevo Canton Ministry of Transport, with 15-year term, three-year grace period, and concessive EURIBOR interest rate.
The realisation of the project will improve quality of public passenger line transport of by introduction of European standards, protection of natural environment, and safety of employees and service users, which will increase economic competitiveness of Sarajevo.
TWO AGREEMENTS RATIFIED
The Council of Ministers of BIH defined a Proposal Decision on Ratification of a Finance Agreement for Interreg IV-B IPA 2021-2027 Programme for the Danube Region between the European Union, Bosnia and Herzegovina and Hungary, after it was signed this April.
The Agreement sets forth conditions for financing and implementation nof the Programme in BIH, with financial support of the European Fund for regional Development, IPA III and Instrument for Neighbourhood, Development and International Cooperation -Global Europa, in addition to national co-financing.
The Programme will additionally secure support to countries-beneficiaries outside EU for implementation of institutional, legal, social and economic reforms, for the aim of gradual harmonisation with rules, standards, policy and practice of the EU in the process of acquiring the EU membership.
The Agreement implementation will start by signing of several finance agreements.
The Council of Ministers of BIH defined the Ministry of Foreign Affairs-tabled Proposal Decision on Ratification of Agreement between Serbia and Bosnia and Herzegovina for IPA III 2021-2027 Serbia – Bosnia and Hezrgovina Cross-Border Cooperation Programme.
The Agreement relates to relations between the Republic of Serbia and Bosnia and Herzegovina, their roles and obligations regarding management and implementation of the Cros-Broder Cooperation Programme, which will strengthen their good neighbourly relations in the process of the EU integrations.
The Ministry of Foreign Affairs of BIH will provide individual decisions on ratification of these agreements to the BIH Presidency for further ratification procedure.
EUROPEAN PARTNERSHIP OF CROATIA AND BIH
The Council of Ministers of BIH took the Ministry of Foreign Affairs-proposed decision on appointment of Co-Chair and members of the Joint Monitoring Committee for implementation of a Contract between the Council of Ministers of Bosnia and Herzegovina and Government of the Republic of Croatia on European Partnership.
Representatives of the Ministry of Foreign Affairs and Directorate for European Integrations were appointed on behalf of the Council of Ministers od BIH, and Deputy Minister of Foreign Affairs Josip Brkić was appointed Co-Chair of the Committee.
The Republic of Croatia extends this way assistance and wishes to facilitate accession of Bosnia and Herzegovina to the European Union, with affirmation of European values in bilateral and regional cooperation, wishing to contribute further stabilisation of the SEE region.
RESTRICTIVE MEASURES
The Council of Ministers of BIH took the Ministry of Security-tabled decision on including Enes Borovac to the list of marked individuals to which restrictive measures will be applied in terms of freezing of funds and livelihoods, for the purpose of temporary prevention of disposal of property.
In elaboration of the decision, it was said that listing of the individual was made based on explained request by the Ministry of Interior of Republika Srpska, with received positive opinion by the Task Force for Fight against Terrorism and Prosecutor’s Office of BIH.
It is about a founded suspicion that Borovac joint a terrorist organisation ‘Al Nusra Front for People of Levant, which the Security Council Committee included into a list of terrorist organisations, in accordance with resolutions from 1999 and 2011, in connection with Al Qaida.
An Action Plan implementation for removal of imperfections in fight against money laundering, earlier adopted by the Council of Ministers of BIH, requires implementation of resolution 1373 of the UN Security Council, which refers to targeted financial sanctions concerning terrorism and financing of terrorism, in accordance with FATF special recommendation.
ANAYISIS OF TRADE EXCHANGE OF AGRICULTURAL FOOD PRODUCTS
The Council of Ministers of BIH adopted an Analysis of Trade Exchange of Agricultural Food Products of Bosnia and Herzegovina with foreign countries in 2023, drafted by the Ministry of Foreign Trade and Economic Relations.
According to the analysis, the total volume of trade exchange of agricultural food products is in a steady increase, but the export stagnated over the past two years at the level of KM 1 billion, while import increased, reaching KM 4.5 billion in 2023. The deficit of KM 3,.5 billion and coverage of import by export of 23% point at a high vulnerability of BIH to shock changes and disturbances in food trade. Agricultural food products make solid 6% in total BIH export to foreign market, while on the import side the share is higher, and it reaches 16%. Bosnia and Herzegovina has no clear competitive advantage, except in three sub-sectors, namely, dairy, fruit and vegetable growing sectors. The leading export products are still sunflower seed oil, which marked a drop in export for 19% in 2023, and less import was evidenced for white sugar for 40% and frozen raspberries for 34%.
The European Union is traditionally key trade partner to BIH. About 55% of import of agricultural food products is from the European Union, while BIH places to the EU market about 46% of total import, mostly to Croatia, Germany, Italy, Slovenia and Austria, and less to Sweeden and France. Simultaneously, about 85% total import of agricultural food products from the European Union comes from Croatia, Germany, Italy, Poland, Hungry, Netherlands, Austria and Slovenia.
The CEFTA market, with Serbia as a leading partner, is an important trade partner to BIH relevant to trade exchange of agricultural food products. BIH exported in 2023 about 41% of total export to CEFTA market, while 29% was imported.
SUPPORT TO ECONOMY FOR VAT RETURN ON RECIPROCITY PRINCIPLE
The Council of Ministers of BIH accepted an Initiative by the Indirect Taxation Administration Steering Board for launching a procedure for establishment of bilateral mutuality (reciprocity) on VAT return to foreign taxpayers between Bosnia and Herzegovina and other states.
Acceptance of bilateral mutuality creates preconditions for our registered VAT payers, economic subjects from BIH, may have VAT return in these countries. Legal obstacles as to VAP return to taxpayers without central office in BIH were removed by adoption of a Rulebook on amendments of Rulebook on application of Law on Value Added Tax from 2020, based on which Bosnia and Herzegovina has no limitations in terms of reciprocity.
Currently, Bosnia and Herzegovina has a leak of funds based n VAT return to foreign tax payers, and enjoys no funds from VAT return.
Therefore, the Councill of Ministers of BIH tasked the Ministry of Foreign Affairs of BIH to take diplomatic activities towards states having the reciprocity principle, and priority should be the states with which Bosnia and Herzegovina has considerable foreign trade exchange. This way, a bilateral reciprocity would be established concerning VAT return, and date defined of bilateral agreements between Bosnia and Herzegovina and other states.
RESPONSE TO DEPUTY’S INITIATIVE ON INTRODUCTION OF AMBER ALERT
The Council of Ministers of BIH defined a Proposal Response of the Ministry of Security to a Deputy’s Initiative by Predrag Kojović, Sabina Ćudić and Aida Baručija, Deputies in the House of Representatives of the BIH Parliamentarian Assembly, on introduction of Amber Alert system in BIH.
The Ministry of Security points out in the Proposal Response, supported by the Council of Ministers of BIH at today’s session, that such systems would have multiply benefit to child security, in cases of missing underage individuals in territory of BIH. The Ministry of Security has no planned budget funds in 2024 for these purposes, and needed equipment procurement requires donor funds.
The Proposal Response points that the implementation of these activities requires inclusion and consent of all-level authorities, primarily Ministries of Interior, and that the Ministry of Security will continue to coordinate relevant activities. (end)
Photography:
https://www.flickr.com/photos/vijeceministara/albums/72177720318463665