Critical legislative occurrences in Bosnia & Herzegovina – primarily focusing on the Constitutional Court, the electricity sector, as well as e-money – are the talk of the town, according to Dimitrijevic & Partners Partner Nina Vjestica.
“The passing of the Law on the Non-Application of Decisions of the Constitutional Court marks a watershed moment in Bosnia and Herzegovina's legal history,” Vjestica begins. “This law stipulates that decisions emanating from the Bosnia & Herzegovina Constitutional Court will remain inapplicable within the confines of Republika Srpska until the Parliamentary Assembly of Bosnia & Herzegovina enacts a new law governing the operations of the Bosnia & Herzegovina Constitutional Court.” This move, designed to shield individuals who refuse to comply with the court's decisions from criminal liability, sets in motion a legal and political domino effect, Vjestica reports.
Consequently, High Representative Christian Schmidt intervened and introduced a new layer of complexity to the situation. “His decision to annul the laws passed by the National Assembly has recalibrated the balance of power,” Vjestica reports. “Furthermore, Schmidt's alterations to the Criminal Code now deem actions that infringe upon the constitutional order of the state as criminal offenses. However, the ruling coalition in Republika Srpska contends that Schmidt's authority is compromised due to his appointment not being endorsed by the UN Security Council, casting doubt on his legitimacy,” she explains.
In addition, Vjestica reports that the “Assembly pushed the new law after the court changed its quorum regulations which were prescribing mandatory postponement of the session in case at least three judges who were elected by the House of Representatives of the Parliament of the Federation of Bosnia and Herzegovina and at least one judge who was elected by the National Assembly of Republika Srpska are not present.” And finally, she points out that “aside from its political effect, the legal effect of this law should be analyzed in detail, especially having in mind that the Constitutional Court has appellate jurisdiction over issues under the BiH Constitution arising out of a judgment of any court in Bosnia and Herzegovina.”
On a separate topic, Vjestica reports that a new Law on Electricity of the Federation of Bosnia and Herzegovina entered into force in August. “The enactment of the law signifies Bosnia and Herzegovina's continued alignment with the Energy Community. This law propels the nation's trajectory towards electricity market liberalization and cleaner energy practices,” she says. “By incorporating elements of the EU's legal framework, the nation is taking measured steps towards a sustainable energy future.”
In addition, Vjestica highlights Bosnia and Herzegovina’s nascent fintech sphere gradually catching up with global trends – a new draft Law on Electronic Money in Republika Srpska is in the works. “Bearing in mind that the issuance of electronic money represents a new financial service on the domestic market, the draft proposes appropriate qualitative requirements regarding the ownership and management structure of companies that intend to engage in this activity,” she shares. Still, according to her, “in addition to security and privacy concerns, various legal risks could arise from violating this law which can include money laundering, privacy protection, etc.”
Finally, Vjestica reports that the “surge in foreign direct investments in 2022, totaling BAM 1.44 billion, is a beacon of promise. A major part of FDI growth is attributed predominantly to the reinvested earnings of existing foreign-affiliated enterprises,” she says. According to her, “noteworthy investments span various sectors, including electricity production, financial services, and base metal manufacturing.” In conclusion, Vjestica stresses that the country’s banking sector is “liquid, duly capitalized, and profitable, among others driven by improved management of non-performing loans – all of which bolsters investor confidence.”