ii. Does the content of a transfer agreement extend the normative field that can be used by the Court to control the constitutionality of an act?

In more simple terms, can the Court rely upon the content of a transfer agreement to control the constitutionality of a given act? The case law of the Court is not entirely clear. The Court took a very restrictive approach in Case U 17/05. In this case, the applicant had requested that the Court examine the compatibility of a number of provisions of legislation adopted pursuant to an agreement reached under Article III.5(b) with the provisions of the agreement itself. The Court noted that it was authorised to examine the constitutionality of the contested provisions only in relation to the provisions of the Constitution (and not in relation to the provisions of the agreement itself). The Court went further and indicated that the provisions of the agreement were not part of the Constitution.²⁶⁵⁵

The Court’s position in U 17/05 seems overly restrictive and significantly at odds with previous positions taken in an earlier decision. In U 14/04 it was requested, as outlined above, that the Court examine the constitutionality of laws adopted by an Entity in the field of indirect taxation. The applicant argued that legislation adopted by Bosnia and Herzegovina on the basis of an agreement transferring responsibilities in the field of indirect taxation required that the promulgation or amendment of legislation on indirect taxation by the Entities needed to be approved by a Governing Board. Given that such approbation had not been given, the applicant argued that the Entity laws were unconstitutional. The Court agreed with the position of the applicant and held:

“28. Therefore, the Constitutional Court points out that the Parliament of the Federation of Bosnia and Herzegovina, by adopting the contested laws, failed to observe the procedure laid down in Article 25 paragraph 4 of the Law on Indirect Taxation System. By doing so, the Federation of Bosnia and Herzegovina de facto assumed competences that it, according to the Agreement of 5 December 2003, transferred to the State of Bosnia and Herzegovina. The Constitutional Court holds that such course of action questioned the functioning of Bosnia and Herzegovina on the principle of the “rule of law”. In particular, it violated the provision of Article III.3(b) of the Constitution of Bosnia and Herzegovina since the Parliament of the Federation of Bosnia and Herzegovina failed to comply with the procedure laid down in the Law on Indirect Taxation System. This law was adopted by the Parliamentary Assembly of Bosnia and Herzegovina and it indubitably represented “a decision of the joint institutions of Bosnia and Herzegovina”. Furthermore, by adopting the contested laws without the consent of the Governing Board of the Indirect Taxation Administration, the Parliament of the Federation of Bosnia and Herzegovina violated the provision of Article III.5(a) of the Constitution of Bosnia and Herzegovina by entering the scope of competences transferred to Bosnia and Herzegovina by the Federation of Bosnia and Herzegovina by means of an agreement.

29. Given the aforesaid, the Constitutional Court concludes that the provisions of Articles 1 and 2 of the Law on Amendments to the Law on Turnover Tax on Goods and Services (OG of FBiH, No. 39/04) and the provisions of Articles 1 and 2 of the Law on Amendments to the Law on Special Tax on Non-Alcoholic Drinks (OG of FBiH, No. 39/04) are not consistent with the provisions of Articles III.3(b) and III.5(a) of the Constitution of Bosnia and Herzegovina. (emphasis added)”

The Court went much beyond using the provisions of a transfer agreement concluded pursuant to Article III.5(a) in order to assess the constitutionality of a normative act. It relied instead upon provisions of a law that had been adopted by Bosnia and Herzegovina pursuant to such a transfer agreement. The Court explicitly stressed that the failure of the legislature of the Federation of Bosnia and Herzegovina to comply with the system of approbation set forth by State legislation amounted to a violation of Article III.5(a) of the Constitution. There is little doubt that these provisions formed an integral part of the Court’s assessment.²⁶⁵⁶

The opinion of the Court in U 14/04 appears to be more suited to the new realities that are necessarily engendered by a transfer agreement. The Court is indeed likely to be called upon to protect the integrity of the new apportionment of responsibilities emerging from such agreements and will inevitably find itself at the centre of any such shift of responsibilities. As we have observed above, the Court has already suspended the validity of acts taken by an Entity in order to protect responsibilities that had been transferred to the State²⁶⁵⁷ and has even suspended the effect of legislation through interim measures.²⁶⁵⁸ The role of the Court in protecting the coherence of such arrangements is key in this regard and should continue to be exercised.²⁶⁵⁹