Law on Additional Amendments and Supplements to the Law on the Central Bank of Bosnia and Herzegovina, published in the Official Gazette of BiH, No. 8/03

Law on Additional Amendments and Supplements to the Law on the Central Bank of Bosnia and Herzegovina PUBLISHED: (Official Gazette of BiH, 8/03) HIGH REPRESENTATIVE FOR BOSNIA AND HERZEGOVINA Using the powers vested in the High Representative by Article V of Annex 10 (Agreement on the Implementation of the Civil Part of the Peace Agreement) of the General Framework Agreement for Peace in Bosnia and Herzegovina, whereby the High Representative is the final authority in the country regarding the interpretation of the aforementioned Agreement on the Implementation of the Civil Part of the Peace Agreement; and specifically taking into account Article II.1(d) of the same Agreement whereby the High Representative “provides assistance, when deemed necessary, in finding solutions to all problems that arise in connection with the implementation of the civil part of the Agreement”; Recalling paragraph XI.2 of the Conclusions of the Peace Implementation Council Conference held on 9 and 10 December 1997 in Bonn, in which the Peace Implementation Council welcomed the intention of the High Representative to use his final authority in the country regarding the interpretation of the Agreement on the Implementation of the Civil Part of the Peace Agreement, in order to help in finding solutions to the aforementioned problems “by issuing binding decisions, when deemed necessary”, on certain matters, including (according to point (c) of this paragraph) “measures ensuring the implementation of the civil part of the Peace Agreement throughout the territory of Bosnia and Herzegovina and its entities”; Bearing in mind the fact that the peace implementation process, which continues under the auspices of the General Framework Agreement for Peace in Bosnia and Herzegovina, has not yet been concluded; Bearing in mind also the fact that the peace implementation process must be concluded in order to establish a stable political and security environment in Bosnia and Herzegovina which, inter alia, leads to fundamental economic reform and the return of refugees and displaced persons; Having regard to Article 4 of the Law on the Banking Agency of the Republika Srpska and Article 4 of the Law on the Banking Agency of the Federation of Bosnia and Herzegovina, which provide for the possibility that entity banking agencies may block client accounts and execute the transfer of funds from accounts to the Central Bank of Bosnia and Herzegovina or to one of its main units, in order to prevent the financing of activities that obstruct or threaten to obstruct the peace process conducted under the auspices of the General Framework Agreement for Peace in Bosnia and Herzegovina.

Whereas the Central Bank of Bosnia and Herzegovina should be granted clear powers to assist in carrying out actions designed to cut off sources of financial support for activities that assist terrorism or activities that obstruct the peace implementation process; Taking into account the entirety of the above matters, the High Representative enacts the following D E C I S I O N ENACTING THE LAW ON ADDITIONAL AMENDMENTS AND SUPPLEMENTS TO THE LAW ON THE CENTRAL BANK OF BOSNIA AND HERZEGOVINA The following Law, which forms an integral part of this Decision, shall enter into force on a provisional basis in accordance with Article 3 thereof, pending its adoption by the Parliament of Bosnia and Herzegovina in the same form, without amendments, supplements, or additional conditions. This Decision shall enter into force immediately and be published immediately in the "Official Gazette of BiH". No.: 118/03 7 March 2003 HIGH REPRESENTATIVE Sarajevo Peddy Ashdown, s.r. L A W ON ADDITIONAL AMENDMENTS AND SUPPLEMENTS TO THE LAW ON THE CENTRAL BANK OF BOSNIA AND HERZEGOVINA (Official Gazette of BiH, Nos. 1/97 and 29/02) Article 1. After Article 2, paragraph 3, point "g:", a new point is added reading: “g (i) to review the information transmitted to the Central Bank by the entity banking agencies pursuant to Article 4(1) of the Law on the Banking Agency of the Federation of Bosnia and Herzegovina and Article 4(m) of the Law on the Banking Agency of the Republika Srpska, as amended and supplemented in the general context of Chapter VIII thereof, but with the aim of adopting specific regulations regarding procedures for clearing and settlement of interbank payments, including payments by cheque and other payment instruments, if necessary to ensure compliance with blocking orders regarding the financing of terrorist activities or activities undermining the peace process as provided for in the entity banking agency laws and banking laws, and to further ensure against any access to blocked accounts as provided for in the aforementioned laws. Article 2. Article 36 is amended by adding new paragraphs 6-8, which read: “6. Upon instructions from the competent banking agency, the Central Bank shall open a special reserve account for the commercial bank requested to block deposits, transactions, etc. of persons or companies identified in the blocking order issued by the Banking Agency of the Republika Srpska or the Banking Agency of the Federation of Bosnia and Herzegovina, or issued upon their authorization. 7. The commercial bank obligated to comply with the blocking order issued as previously stated shall immediately transfer an equivalent amount from its reserve account at the Central Bank of Bosnia and Herzegovina to a special reserve account. The funds shall remain in this special reserve account until the competent agency approves their release. 8. Upon instructions from the competent banking agency, the Central Bank of Bosnia and Herzegovina shall block all reserve accounts of the commercial bank that fails to comply with the aforementioned instructions from the competent banking agency. These accounts shall remain blocked until the Central Bank of Bosnia and Herzegovina receives authorization from the competent banking agency to allow the unblocking of the accounts.” Article 3. This Law shall enter into force immediately and be published immediately in the "Official Gazette of BiH". ∗ ∗ ∗ Note: The aforementioned Decision, namely the Law on Additional Amendments and Supplements to the Law on the Central Bank of Bosnia and Herzegovina, was published in the "Official Gazette of BiH", No. 8/03, and entered into force on 07.03.2003.