Federal Prosecutor’s Office adopts TI BiH complaint: Order to not conduct investigation into million-mark debts for concessions in SBK annulled

The decision of the Cantonal Prosecutor’s Office of Central Bosnia Canton (SBK) not to conduct an investigation against responsible persons for non-payment of concession fees worth over 1.7 million KM has been annulled by the Federal Prosecutor’s Office. The decision followed a complaint by Transparency International in BiH, which reported this case two years ago, but the acting prosecutor, and then the chief prosecutor of SBK, decided not to conduct an investigation against responsible persons in the cantonal Government who failed to initiate forced collection procedures.

However, the Federal Prosecutor’s Office adopted the TI BiH complaint and ordered that actions be taken with the aim of fully establishing the circumstances and facts in this case. TI BiH indicated in its report that a large number of concessionaires in this canton were not paying their obligations, that some were subsequently dissolved while the Ministry of Economy of SBK was not terminating contracts, while the Ministry of Finance was not initiating procedures for forced collection through activation of promissory notes. From receipt of requests to blocking of accounts of individual concessionaires, up to nine months would pass, thereby enabling concessionaires to avoid paying obligations, which resulted in significant damage to the budgets of the canton and municipalities.

TI BiH believes that the prosecutor’s office must determine whether those responsible through these actions favored concessionaires, who continued to exploit concession subjects without paying obligations. The Law on Concessions clearly prescribes the possibility of contract termination if a concessionaire is three months late with settling obligations, but instead concessionaires only received warnings, although the Law does not recognize this institute in the context of settling obligations. In only one case, due to untimely filing of a lawsuit against one concessionaire, a debt of 59,339.74 KM became statute-barred, because the lawsuit was filed three years after the due date of the last claim.

The need for competent authorities to examine the conduct of those responsible in this case was also indicated by the Audit Office of FBiH, which stated in its report that “responsible persons for the aforementioned non-action provided oral clarification that government consent is required for contract termination, but no documentation was presented confirming that the Ministry actually sought such consent.”

Despite everything, the Cantonal Prosecutor’s Office refused to conduct an investigation, and from the order delivered to TI BiH it does not appear that responsible persons were examined at all regarding the stated circumstances, or whether any verification of potential close ties with concessionaires was conducted.

Transparency International in BiH has long indicated that numerous concessionaires throughout Bosnia and Herzegovina who exploit significant natural resources do not pay their obligations, thereby causing damage to public revenues. Due to all this, TI BiH published a concession registry which for the first time made available to the entire public data on over 500 concessionaires, concession fee payments, debts arising on this basis, and revenues that all levels of government realize.