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State of Logistics/Transportation/Shipping in Bosnia and Herzegovina

State of Logistics/Transportation/Shipping in Bosnia and Herzegovina

Bosnia and Herzegovina
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Due to the complex constitutional structure of Bosnia and Herzegovina (composed as it is of two entities, Republika Srpska (RS) and Federation of BiH (FBiH), and the Brcko District), logistics, transportation, and shipping matters are regulated on the state level, entity level, and – in FBiH – cantonal administrative level.

In general, although legislation in Bosnia and Heregovina (BiH) is not yet highly developed, recent changes and amendments show improvement, as BiH aims to align its legislation with EU standards (in particular under the terms of the BiH Stabilization and Association Agreement, which requires the country to complete that process by the middle of 2021). Consequently, a new Customs Policy Law was adopted to simplify the procedure of export and import (although for that law to be fully implemented a new Law on Value Added Tax also needs to be adopted). It should be noted that BiH has certain strategic advantages when it comes to the free movement of goods, as it has a solid network of free trade arrangements.

On the other hand, BiH’s complex structure has led to a lack of legislative uniformity when it comes to logistics, transportation, and shipping, and the existence of three different public postal companies with different procedures and practices, two state railway companies (divided on a territorial basis), and similar complexities inevitably leads to more time spent in “processing” than on actual transport.

FBiH, RS, and BiH have adopted a Transport Strategy to develop the local economy and social environment by securing the sustainable growth of the transport system and developing a system that will improve the mobility of goods and people and ensure physical access to markets, jobs, and education, as well as achieving other social and economic needs.

Logistics, transport, and shipping in BiH is carried out by both public and private (national and international) companies. Three public postal carriers exist in BiH – Posta Srpske, BH Posta, and HP Mostar – in addition to a number of private companies. Unofficial numbers suggest there are around 180 registered transporters.

There are approximately 25 thousand kilometers of roads in BiH, out of which only 200 are highways. A spotlight has recently been directed on the expansion of the highway network, and several new sections are currently under construction.

The Sava River, which is open for international sailing and acts as a border, has valuable economic potential, especially in the view of navigation and provision of conditions for the economic movement of goods. The main ports in BiH are Brcko, Samac, and Brod.

Four airports are currently operational in BiH. The main one is the Sarajevo International Airport, but the airports in Tuzla, Mostar, and Banja Luka are also considered to be of significant value to BiH logistics, transportation, and shipping. Currently, work is in progress to expand the Sarajevo International Airport by adding another terminal due to increased traffic, both in goods and people, and the airport in Tuzla has been recently renovated. Interestingly, BiH did not have control over its air space above ten thousand meters due to insufficient capacity, so that control was given to Croatia, Serbia, and Montenegro. Only on December 5, 2019 did BiH take control over of most of its high airspace, and significant income is expected due to the amount of flights through BiH’s airspace.

Although its potential is not being wholly realized, there are more than one thousand kilometers of railways in BiH, with 57% in FBiH, 40.4% in RS, and 2.6% in Brcko. Certain initiatives have been launched to reconstruct existing railway lines and further develop the railway network.

Even though BiH is showing improvements in all fields regarding logistics, transportation, and shipping, it seems that there is a lot more to be done in order to be on par with other EU countries.

By Indir Osmic, Head of Public Sector Matters, and Stefan Cosovic, Junior Associate, CMS Sarajevo

This Article was originally published in Issue 6.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Bosnia and Herzegovina Knowledge Partner

Maric & Co Law Firm stands on the shoulders of more than 70 years of experience and practice in the legal market of Bosnia and Herzegovina. Having in mind that it is difficult to find a small country with such a complicated political and legal system, we are fully aware that quality advice requires deep understanding of different areas of law. In a country where legislation is created on state, entity and cantonal levels, without proper harmonization, and where the same regulation can be applied differently by two different courts, only domestic lawyers who are well-versed in local regulations and court practices, and who are highly specialized in their practice area, may actually help their client.

With this understanding, today, the firm Maric and Co is the largest law office in the country dealing exclusively with business law. This means that we provide wide expertise in resolving all issues that domestic and international investors encounter when setting up and operating businesses in Bosnia and Herzegovina. The scope of the office allows each of our attorneys to highly specialize in their fields, whilst the size of our team ensures delivery of premium advice and seamless service. Our firm seeks long-term partnerships with clients with the aim of providing the best and most complete solution to the client's legal needs. We are proud to say that our clients do not leave us.

We apply the same principles to our international affairs, aware of the fact that no foreign lawyer can have the same understanding of legal regulations of a country as a domestic lawyer. Therefore, our philosophy is not to open branches in countries where our clients do business, but to closely connect with top tier lawyers in those countries. Our law firm is one of the founding members of SEE Legal – a group of ten leading national law firms from 12 South East European countries. This network enables us to provide the best advice and representation in these countries. Additionally, as a result of our strong relationship with the majority of global law firms, we are able to provide law services anywhere in the world.

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