Decision on the Organization of the Clearing Method for the Settlement of International Payments

Based on Articles 49 and 58 of the Law on the Central Bank of Bosnia and Herzegovina ("Official Gazette of BiH", No.: 1/97, 29/02, 13/03, 14/03, 9/05, 76/06 and 32/07) and Article 52 of the Regulation of the Central Bank of Bosnia and Herzegovina, Decision No.: 120/05 dated June 29, 2005, the Governing Board of the Central Bank of Bosnia and Herzegovina, at its 5th session held on May 28, 2007, adopted the

D E C I S I O N on the Organization of the Clearing Method for the Settlement of International Payments

Article 1. This Decision regulates the manner in which the Central Bank of Bosnia and Herzegovina organizes and conducts the interbank net settlement of international payments (hereinafter referred to as: clearing of international payments).

Article 2. Clearing of international payments is conducted for banks with their seat on the territory of Bosnia and Herzegovina with which the Central Bank of Bosnia and Herzegovina (hereinafter referred to as: the Central Bank) has concluded a contract for the conduct of international payment clearing, and for banks from the territory of a state with whose central bank the Central Bank has concluded an agreement on the net settlement of international payments.

Article 3. A bank with its seat on the territory of Bosnia and Herzegovina, within the meaning of this Decision, is a bank that has a permit for conducting foreign exchange business from the competent Bosnian-Herzegovinian agency/body for banking supervision (hereinafter referred to as: bank).

Article 4. Clearing of international payments is conducted as a net settlement through the bank's account at the Central Bank, in accordance with regulations adopted on the basis of this Decision.

Article 5. The condition for conducting clearing of international payments with banks from other states is that the Central Bank concludes an agreement with the central bank of that state for the purpose of conducting clearing of international payments, and clearing of international payments is conducted in accordance with that agreement and according to the rules for the settlement of clearing of international payments, which will be an integral part of the agreement and the authorization for the debit of the bank's reserve account based on the net position from multilateral settlement in clearing.

Article 6. Operational Rules for the clearing of international payments shall determine the manner and conditions of clearing of international payments, protective measures and liability, net position limits, collateral for the execution of clearing, receipt of orders, manner of payment execution, finality of settlement, schedule for the execution of clearing, exclusion from clearing of international payments, system working hours, and fees for the provision of clearing services for international payments. Operational Rules from paragraph 1 of this Article are provided for all participants in the clearing of international payments.

Article 7. Banks participating in the clearing of international payments submit data on their obligations based on international payments to the clearing operator electronically, in accordance with the Operational Rules. After receiving the electronic data from banks participating in the clearing of international payments, the clearing operator calculates multilateral amounts based on international payments and delivers a report on net positions of multilateral settlement for all banks from Bosnia and Herzegovina to the Central Bank. The Central Bank performs the debit and credit of the bank's account based on the settlement for net positions. Participants in the clearing are notified about the executed clearing of international payments, or about the debit and credit based on net positions, in accordance with this Decision and the Operational Rules.

Article 8. The Central Bank is obliged to regularly inform banks about any delays and other problems in the conduct of business under this Decision.

Article 9. The Governor of the Central Bank is authorized to adopt acts necessary for the implementation of this Decision.

Article 10. This Decision enters into force on the day of its adoption, and shall be applied the day following the day of its publication in the "Official Gazette of BiH", and shall also be published in the official gazettes of the entities and the Brčko District of Bosnia and Herzegovina.

Decision No.: 264/07 May 28, 2007 Sarajevo

Chairman of the Governing Board of the Central Bank of Bosnia and Herzegovina

GOVERNOR mr. Kemal Kozarić