Acted on Schmidt's decision: Central Bank of Bosnia and Herzegovina transferred money to settle debt to Slovenian company Viadukt

The Central Bank of Bosnia and Herzegovina (BiH) has opened an account and transferred money to the BiH Ministry of Finance, intended for the payment of debt to the Slovenian company Viadukt, the bank confirmed to Radio Free Europe.

This state institution acted on the decision of the High Representative of the International Community in Bosnia and Herzegovina, Kristian Schmidt, who imposed a decision on July 17th according to which the 56 million euro debt to Viadukt would be paid from fuel tolls, from the part that should have been paid into the budget of the Republika Srpska entity (RS).

The Slovenian company Viadukt has initiated arbitration proceedings against BiH because the RS government awarded a concession to its own Elektroprivreda RS in 2013, which jeopardized an earlier Slovenian hydroelectric power plant project on the Vrbas River.

Following the ruling of the ICSID, an arbitration court in Washington, in 2022, Viadukt initiated proceedings to seize state assets of BiH in the country and abroad to settle the debt, including the assets of the BiH Air Navigation Services Agency (BHANSA).

A forced collection of the assets of the Central Bank of BiH, namely its real estate in several cities in BiH, was also requested.

For seven years, the authorities in BiH have been unable to reach an agreement on the distribution of more than 160 million euros from the collected tolls paid with every liter of fuel sold, which should be used to finance the construction of highways and roads throughout the country.

The distribution of this revenue between the entities of the Federation of BiH and RS, and the Brčko District of BiH as a separate administrative unit, could not be agreed upon by the state and two entity finance ministers. They form the Board of Directors of the Indirect Taxation Authority of BiH, which collects money from value added tax (VAT), customs, excise duties and other indirect taxes.

According to earlier statements by the Minister of Finance of the Federation of BiH, Toni Kraljević, the representatives of the RS requested a larger amount than, according to estimates from the Federation of BiH, was collected in road tolls in the RS area.

At the same time, the RS authorities and their representatives in the state government refused to comply with the arbitration decisions in the Viadukt case, despite the entity's obligations under the 2017 Agreement with the Council of Ministers of BiH on mutual rights and obligations in that proceeding.

"This share (of the tolls that will be used to pay off the debt towards Viadukt) is not intended for RS budget expenditures and has no impact on RS budget stability. It will not affect any payments or services for RS citizens," said Šmit.

He explained that the funds will be transferred to the Ministry of Finance and Treasury of BiH so that the Ministry can make the payment to Viadukt.