Article III.5(b)

Does Article III.5(b) constitute a transfer mechanism distinct from that provided under Article III.5(a) or does it merely provide for an obligation for the Entities to begin negotiations? One could argue indeed that Article III.5(b) merely provides for an obligation to negotiate. Should such negotiations result in a decision to transfer responsibilities to Bosnia and Herzegovina, responsibilities would need to be transferred on the basis of the transfer agreement mechanism foreseen by Article III.5(a).

The case law of the Court seems to interpret Article III.5(b) otherwise. Article III.5(b) has been interpreted as providing a distinct basis for the Entities to conclude agreements transferring responsibilities to the institutions of Bosnia and Herzegovina. The Entities themselves have interpreted Article III.5(b) as such. We note for example that the Entities have decided to establish the HJPC on the basis of an agreement concluded pursuant to Article III.5(b). The Constitutional Court has interpreted Article III.5(b) similarly. In U 17/05, it held:

“[…] considering the fact that Entities commenced negotiations […], in the present case ‘on utilization of energy resources’ which were finalized by [the] signing of the Agreement, whereby the state Bosnia and Herzegovina was vested with the competence to form the Company for Transfer of Electric Power and adopt corresponding laws.”²⁶⁸⁷

The Court seems to have considered that the agreement reached in this case formed an integral part of the negotiations referred to in III.5(b) and that the effect of such an agreement was to transfer new responsibilities from the Entities to the State of BiH.

If Article III.5(b) constitutes an additional basis upon which the Entities can reach agreements to transfer responsibilities, one may wonder whether the six (6) month period set forth therein limits their capacity to do so? In more simple terms, does the transfer mechanism provided under Article III.5(b) remain available to the Entities after the expiry of the six-month period stipulated therein?

In U 17/05, the Court considered an agreement under Article III.5(b) reached several years after the expiry of the six-month period referred therein to be valid.²⁶⁸⁸ The transfer agreement relating to the establishment of the HJPC was reached pursuant to Article III.5(b) and was concluded after the expiry of the six-month period stipulated therein.²⁶⁸⁹ The Court confirmed its validity in U 11/08.²⁶⁹⁰

What is the intensity of the obligation to negotiate? As mentioned above, it has been argued, in U 42/01, that the Republika Srpska had violated Article III.5(b) by reaching an agreement on special relationships with the Federal Republic of Yugoslavia according to which both parties agreed to foster cooperation regarding the economy and the utilisation of natural resources. The applicant argued that the agreement prejudiced and limited Republika Srpska’s capacity to fulfil its obligations to negotiate under Article III.5(b).²⁶⁹¹ The Court rejected the applicant’s argument and held that the contested provisions of the special relationship agreement could be interpreted in a manner consistent with the Constitution. The Court also observed that the provisions of the agreement were general in nature, were not directly applicable and required the formulation of implementing annexes.²⁶⁹²

We can conclude at a minimum that the obligation to negotiate stemming from Article III.5(b) does not prevent Entities, within the framework of Article III.2(a), to reach arrangements covering matters referred to in Article III.5(b).