Feeling the repercussions of global economic issues, Bosnia & Herzegovina finds itself in a more or less usual position in unusual times – with an upcoming general election this fall and swaths of legislative developments seeking to reshuffle the landscape in which lawyers operate, according to Dimitrijevic & Partners Partner Stevan Dimitrijevic.
“As it is everywhere else, global economic developments have not failed to hit Bosnia & Herzegovina too,” Dimitrijevic begins. Even with BiH being less exposed to the overall migration of businesses and people due to the Ukrainian crisis when compared to its neighboring countries or others hit by the developments, it is still feeling the ramifications of the war in Ukraine.
“The EU-imposed sanctions on Russia have spilled over to our markets as well and we are scrambling to make sure our clients remain compliant in every way,” Dimitrijevic continues. “We as lawyers are left in a bit of a no man’s land with respect to what we can and cannot do, because we have to be completely clear what constitutes behavior that is compliant with the sanctions and what does not – where only recently we saw the explicit exclusion of legal services in the explanations related to the sixth package of EU sanctions. This was expected.” The citizens of Bosnia & Herzegovina have also felt the consequences of the overall crisis, with the “average consumer basket cost going up by 10.2%,” he reports.
Furthermore, Dimitrijevic says the political situation in the country is “complex, as it is so often. We have general elections upcoming this autumn and the tensions between the government and opposition parties are reaching a high point.” He also reports there has been a significant number of “challenges made to the role of High Representative Christian Schmidt. Schmidt is still attempting to implement certain rules and regulations, but is facing a lot of opposition from the Republika Srpska part of the country,” he says.
Speaking of new laws and regulations, there are proposed changes in several areas. “There is a new bankruptcy law in the Federation of Bosnia and Herzegovina, which updated the overall framework with modern instruments to be implemented in settlements with creditors,” Dimitrijevic reports. “Also, the law on pension insurance in the same part of the country has been updated, so that unmarried couples can also benefit from spousal coverage.”
However, what’s most interesting is the new law on fiscalization enacted in Republika Srpska. “This has always had a strong opposition from the lawyers and the private sector as such,” Dimitrijevic stresses. “The bar association feels that lawyers should be exempt from fiscalization on grounds of privacy. While the government agrees with this point, it was not included in the law itself but was left to be specified in delegated acts and bylaws.” Still, Dimitrijevic feels that the independence of lawyers will remain a concern: “giving the government the competence to decide who falls under the auspices of the law and who doesn’t is a less than ideal situation.”
Finally, going over the most interesting deals of late, Dimitrijevic mentions a few. “The formerly regionally owned laboratory Konzilijum was sold to Medicover, where we have assisted one of the sellers. Also, the UNIS factory in Derventa was sold via an asset deal – in the wind-down procedure of this former giant – to Fructa Trade,” he reports. “We are, of course, witnessing various projects developing renewable energy across the country”. With Bosnia & Herzegovina offering a nice environment to work in, he says “IT developers are expected to be moving here in high numbers, reflecting the growth of the IT sector.” The IT sector, Dimitrijevic concludes, “is performing admirably, in stark contrast to those business sectors suffering from international supply chain issues, like construction. Also, Bosnia & Herzegovina and all countries in the region should anticipate the impact of the distorted supply chain, as it is not unrealistic to see, in the near future, the relocation of some of the production activities closer to the consumers, placing them in the region instead.”