State of Compliance

  • Competition Law

    Competition Law

    The Competition Act of Bosnia and Herzegovina, adopted in 2005 and amended in 2007 and 2009, is in line with the competition acquis.

    The Competition Council’s enforcement activities in the energy sectors are mainly focused on concentrations. However, it also rendered two decisions regarding the abuse of dominance: one against KJKP Toplane – Sarajevo d.o.o. and one against Gradska toplana Doboj a.d. Doboj, where it found that by applying their tariff methodology they abused their dominant position on the market for heating.

    The Competition Council’s cooperation with the Secretariat and other national competition authorities in the framework of the Energy Community Competition Network is rather limited.

  • State Aid Law

    State Aid Law

    The Law on the System of State Aid is generally in line with the State aid acquis.

    The independence of the State Aid Council remains questionable as both the decision-making body as well as the Secretariat are closely linked to the Government in terms of nomination of its members and financing. Furthermore, effective enforcement of the State aid acquis is hindered by the limited human resources of the enforcement authority. The Secretariat forwarded to the State Aid Council information regarding two cases of state guarantees for thermal power plant projects (Banovici and Tuzla 7); however, it closed both cases due to incomplete notifications by the alleged State aid grantor.

    With regard to the second project, Tuzla 7, the State Aid Council was re-notified and rendered a decision finding that the guarantee provided by the Federation of Bosnia and Herzegovina for the loan of EUR 614 million from the Chinese Export-Import-Bank to “Elektroprivreda BiH” for the Tuzla 7 project does not entail State aid. This decision is subject to a complaint submitted to the Secretariat. The Secretariat shares the complainant’s concerns regarding compliance of this decision with the State aid acquis and opened a dispute settlement procedure. It is currently subject to a mediation procedure under the Energy Community Secretariat’s Dispute Resolution and Negotiation Centre. Therefore, implementation of the State aid Law and its enforcement are yet to be achieved. This is subject to an open dispute settlement case initiated already in 2010 (Case ECS-1/10).

    Furthermore, the Secretariat received complaints regarding State support in the form of settling unpaid debts of companies active in the mining sector, which the Secretariat is currently assessing.

    Although the State aid acquis is fully transposed into national legislation, full compliance with the Treaty’s obligations in the area of State aid requires an independent State aid authority which actively enforces the acquis in a compliant way.