Bosnia and Herzegovina: Issues for U.S. Policy

CRS Report for Congress
Bosnia and Herzegovina:
Issues for U.S. Policy
February 10, 2005
Steven Woehrel
Specialist in European Affairs
Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

Bosnia and Herzegovina: Issues for U.S. Policy
Summary
The 1995 Dayton Peace Accords, brokered primarily by the United States, ended
the war in Bosnia, which had cost hundreds of thousands of lives and created over
2 million refugees and displaced persons. The Dayton Peace Accords also set up
Bosnia’s current political structure of two semi-autonomous, ethnically-based
“entities” and a relatively weak central government. It resulted in the deployment of
a NATO-led peacekeeping force, which was charged with providing a secure
environment for the implementation of the peace agreement. In December 2004, a
European Union force took over peacekeeping duties from NATO. A U.N.-
appointed High Representative, created by the Dayton Accords, oversees the civilian
implementation efforts.
In the more than nine years since the accords, the United States and other
countries have scored significant achievements in Bosnia, including sharply reduced
inter-ethnic violence, restored freedom of movement, and the return of many refugees
and displaced persons to their homes. The international community has also helped
Bosnia hold largely free and fair elections and set up many of the institutions of a
modern democratic state. However, these individual successes have not added up
to the accomplishment of the overall goal of international efforts in Bosnia: the
creation of a stable, united Bosnia, able to continue reforms on its own and integrate
into Euro-Atlantic institutions. Almost all progress on reforms and on promoting
greater unity in Bosnia continues to require direct or indirect intervention by
representatives of the international community. Reform efforts continue to be met
by obstructionism or passivity by the nationalist parties that control Bosnian
governments at all levels. Some observers also assert that the cumbersome governing
institutions set up by the Dayton Peace Accords are unworkable.
Supporters of international activism in Bosnia say that the only way to move
forward is to continue to impose reforms when necessary, and that when these
reforms reach a critical mass, they will become self-sustaining. According to critics
of current international policy on Bosnia, international interventionism has led to
dependency and irresponsibility among local elites. This problem is all the more
serious as the international commitment to Bosnia in troops and funding has
decreased in recent years.
Another important issue is whether Bosnia is still important to U.S. interests.
Some say that pressing U.S. commitments in other countries and regions argue for
transferring full responsibility for Bosnia to European countries. Others believe that
the United States still has a stake in Bosnia’s stability, as part of building a Europe
“whole and free,” the overarching U.S. objective in the region. They say continued
U.S. involvement in Bosnia may be needed to arrest indicted war criminals, as well
as to make sure that Bosnia is not used as a haven for organized crime or terrorists.^th
The 109 Congress will likely be involved in such issues as appropriating foreign aid
for Bosnia and examining Bosnia’s compliance with its obligations to the
International Criminal Tribunal for the former Yugoslavia. This report will be
updated as events warrant.

Contents
In troduction ......................................................1
Successes and Remaining Challenges..................................3
Prospects for Stability and Self-Sustaining Reforms.......................5
U.S. Policy Issues..................................................8
SFOR and Partnership for Peace..................................8
War Crimes and Cooperation with the ICTY........................9
Terrorism ...................................................11
U.S. Aid....................................................13
List of Figures
Figure 1. Map of Bosnia and Herzegovina..............................2

Bosnia and Herzegovina:
Issues for U.S. Policy
Introduction
The 1995 Dayton Peace Accords, brokered primarily by the United States,
ended three years of war in Bosnia and Herzegovina, which had cost hundreds of
thousands of lives and created over 2 million refugees and displaced persons. Under
the Dayton Peace Accords, Bosnia-Herzegovina remains an internationally
recognized state within its pre-war borders. Internally, it consists of two semi-
autonomous “entities:” the (largely Bosniak and Croat) Federation of Bosnia-
Herzegovina and the (Bosnian Serb-dominated) Republika Srpska (RS). Under the
accords, the Bosnian Federation received roughly 51% of the territory of Bosnia-
Herzegovina, while the Republika Srpska received about 49%.
Each of the entities has its own parliament and government with wide-ranging
powers, as well as its own armed forces. Each entity may establish “special parallel
relationships with neighboring states consistent with the sovereignty and territorial
integrity” of Bosnia-Herzegovina. Most powers are vested in the entities; the central
government has responsibility for foreign policy, foreign trade and customs policy,
monetary policy and a few other areas. Central government decisions are nominally
taken by a majority, but any of the three main ethnic groups can block any decision
if it views it as against its vital interests. The Federation is further divided into ten
cantons, each of which has control of policy in key areas such as policing and
education.
The Dayton Peace Accords also resulted in the deployment of a NATO-led
peacekeeping force which has been charged with providing a secure environment for
the implementation of the peace agreement. A U.N.-appointed High Representative,
created by the Dayton accords, oversees the civilian peace implementation efforts.
Since 1997, this official has had the power to fire and take other actions against local
leaders and parties as well as to impose legislation in order to implement the peace
agreement and more generally bring unity and reform to Bosnia. The current holder
of this post is Paddy Ashdown of Great Britain. Ashdown also holds the post of the
European Union’s Special Representative in Bosnia.¹

¹ The text of the Dayton Peace Accords can be found at the website of the Office of the High
Representative (OHR): [http://www.ohr.int]. For more background on Bosnia’s history,
government structures and other issues, see CRS Report RL30906, Bosnia and Herzegovina:
Background on U.S. Policy Concerns, by Steven Woehrel, March 28, 2001.

Figure 1. Map of Bosnia and Herzegovina
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In the more than nine years since the accords, the United States and other
countries have scored significant achievements in Bosnia, including sharply reduced
inter-ethnic violence, restored freedom of movement, and the return of many refugees
and displaced persons to their homes. The international community has also helped
Bosnia hold largely free and fair elections and set up many of the institutions of a
modern democratic state. However, these successes in some areas have not added
up to the accomplishment of the overall goal of international efforts in Bosnia: the
creation of a stable, united Bosnia, able to continue reforms on its own and integrate
with Euro-Atlantic institutions. Almost all progress on reforms and on promoting
greater unity in Bosnia continues to require direct or indirect intervention by
Ashdown and other representatives of the international community. Reform efforts
continue to be met by obstructionism or passivity by the nationalist parties which
control Bosnian governments at all levels. Some observers also assert that the
cumbersome institutions set up by the Dayton Peace Accords are unworkable.
According to critics of current international policy on Bosnia, international
interventionism has led to dependency and irresponsibility among local elites. This
problem is all the more serious as the international commitment to Bosnia in troops
and funding has decreased in recent years. In addition, the infringement of Bosnia’s
sovereignty represented by Office of the High Representative (OHR) may also prove
to be an obstacle in the country’s path toward European integration, according to

some observers. Critics ask how a country lacking all the attributes of sovereignty
can hope to join NATO or the EU one day, or, in the near term, participate
meaningfully in such programs as NATO’s Partnership for Peace program. They
wonder if Bosnia can or should continue to operate indefinitely as a ward of the
international community, as the rest of the region moves, however slowly in some
cases, toward European integration.
Another important issue is whether Bosnia is still important to U.S. interests,
particularly given perhaps more pressing U.S. commitments in other countries and
regions. The United States has invested substantial sums to stabilize Bosnia. From
FY1991 through FY2004, the United States spent over $13.6 billion in incremental
military costs in Bosnia, mainly for the U.S. peacekeeping contingent.² U.S. aid to
Bosnia over the same period amounted to more than $1.5 billion.³ Some observers
believe that the European Union is now capable of dealing with Bosnia’s remaining
problems on its own. Indeed, the EU already provides the bulk of financial aid and
political guidance to Bosnia, and took over the military mission there from NATO
in December 2004. However, many observers believe that the United States still has
a stake in Bosnia’s stability, as part of building a Europe “whole and free,” the
overarching U.S. objective in the region. Continued U.S. involvement in Bosnia may
be needed to arrest indicted war criminals, as well as to make sure that Bosnia is not
used as a haven for organized crime or terrorists.
Successes and Remaining Challenges
Bosnia has achieved progress on some issues since 1995, but continues to fall
short in many others. One relative success story has been the restoration of freedom
of movement within Bosnia and the gradual return of refugees to their homes.
According to the U.N. High Commissioner for Refugees (UNHCR), by October
2004, over 1 million of the 2.2 million refugees and displaced persons had returned
to their homes, including over 447,000 who returned to areas in which they are an
ethnic minority. Over 92 percent of the legal claims of persons wanting to have their
homes returned to them have been resolved.⁴
While ethnic relations are sometimes tense, and some acts of violence do occur,
the main obstacle to refugee returns is economic. The war often had the effect of
destroying local industries, along with the jobs that made communities viable. Many
returnees are elderly. Many young people want to leave Bosnia for better
opportunities elsewhere, up to two-thirds of them, according to some polls.⁵ At the

² See CRS Issue Brief IB94040, Peacekeeping and Related Stability Operations: Issues of
U.S. Military Involvement, by Nina Serafino.
³ U.S. Agency for International Development, U.S. Overseas Grants and Loans, July 1,

1945-September 30, 2002, from the AID website [http://www.usaid.gov]

⁴ UNHCR Bosnia website, online at [http://www.unhcr.ba], and the OHR website,
[http://www.ohr.int].
⁵ Tim Judah, “Half-Empty or Half-Full Towns?” Transitions Online, February 5, 2004.

end of 2003, OHR handed over responsibility for refugee issues to the Bosnian
human rights and minorities ministry.
A key focus of international efforts in Bosnia is to strengthen the rule of law.
The rule of law is particularly important in order to break down the parallel structures
connecting nationalist political parties, certain enterprises and organized crime.
Widespread corruption also retards economic development. According to an opinion
poll commissioned by Transparency International, Bosnians view corruption as the
second most serious problem the country faces, after unemployment.⁶
High Representative Ashdown has undertaken several steps to promote the rule
of law in Bosnia. He pushed through a new criminal code and a criminal procedure
code in 2003, and put into place a High Judicial and Prosecutorial Council (HJPC)
which has vetted Bosnia’s judges and prosecutors for integrity and professional
competence, with ethnic representation proportionate to the 1991 pre-war Bosnian
census. The HJPC is also responsible for disciplinary actions as well as for
appointing new judges and prosecutors. Ashdown also forced the creation of the
Bosnian State Court, with special panels dealing with organized crime. This court
has both Bosnian and international judges and prosecutors.
Until January 2003, police training was conducted by a U.N. police mission in
Bosnia. The mission vetted policemen for their professional qualifications and
participation in war crimes or illegal activity. An EU police mission, which replaced
the UN mission, is continuing the advisory and training functions of the U.N.
mission. Ashdown successfully pushed for the establishment of new central
government law enforcement institutions, including a Ministry of Justice, a Ministry
of Security, and a State Information and Protection Agency (SIPA), charged with
dealing with issues such as money laundering and organized crime, as well as
terrorism. In December 2004, a Police Restructuring Commission, composed of
Bosnian and international officials, issued a report calling for Bosnian central
government institutions to take over responsibility for all police matters. Ashdown
has also called for the elimination of entity Interior Ministries. Such proposals, if
implemented, would mark a dramatic blow to the power of the entities within Bosnia,
which had previously controlled most police functions, and have been strongly
resisted by Bosnian Serb leaders.
However, it should be noted the implementation of these reforms has been slow.
These institutions often do not function effectively, as they lack resources and
sufficient staffing. However, there have been a few successes in the area of rule of
law. Courts in both entities have prosecuted several cases against organized crime
figures. In March 2004, the Bosnian State Court handed down a guilty verdict in
Bosnia’s biggest human trafficking case.
Another area key to Bosnia’s future stability is economic reform and poverty
reduction. Here again, the situation is mixed. The International Monetary Fund has
praised Bosnia for its success in establishing macroeconomic stability, including low

⁶ “BiH Corruption Moderately Dropping,” Transparency International BiH press release,
March 11, 2004.

inflation and a stable currency, due to a currency board system that pegs the
konvertibilna marka (KM) to the Euro. International officials have pushed through
laws to establish an Indirect Taxation Authority and a value added tax in Bosnia.
Rationalizing Bosnia’s tax system is necessary in order to stimulate economic
growth, as well as to provide resources for Bosnia’s underfunded central government
institutions, as well as to assist Bosnia’s EU integration. The international
community is pressing Bosnian leaders to cut back the size and expense of entity and
lower level governments, as the central government’s rule is strengthened.
However, severe economic problems remain. Bosnia is one of the poorest
countries in Europe, with Gross Domestic Product (GDP) about 60% of the pre-war
level. About half of the population lives close to or below the poverty line.⁷
According to some experts, Bosnia’s economy may be on the verge of crisis. Many
of Bosnia’s main pre-war industries, including military industries, have collapsed,
and new businesses to replace these lost jobs have not materialized. According to
this view, a substantial part of the economy is dependent on government spending on
oversized government bureaucracies (in part a legacy of the complicated government
structures created by the Dayton Peace Accords) as well as residual international
funding. Government spending accounts for over 50% of the country’s GDP.⁸
Efforts to stimulate the economy to produce jobs and foreign investment have
only been partially successful. Ashdown established a “Bulldozer Committee”
composed of OHR officials and Bosnian businessmen to develop specific proposals
to cut through red tape and take other steps to improve the business climate in
Bosnia. Nevertheless, Bosnia still lacks many elements of a suitable legal framework
to encourage domestic and international investors. Moreover, the privatization
process, which is in the hands of the entity governments, remains slow and plagued
by endemic administrative and legal shortcomings, according to the international
officials. Foreign direct investment (FDI) is increasing, in part due to Ashdown’s
efforts, but from a very low base. FDI made up only 5% of GDP in 2003, one of the
lowest percentages in the region. ⁹
Prospects for Stability and
Self-Sustaining Reforms
A major concern for international policymakers is the long-term impact on
Bosnia of declining international attention and resources. As noted above, most of
the modest reform successes in Bosnia have been initiated and pushed forward by the
international community. International aid has played an important role in keeping
the economy afloat. The nationalist parties in power have often reacted passively on
reform issues, or even engaged in overt or covert obstructionism. Local leaders often
concentrate on political maneuvering and securing resources for political patronage.

⁷ USAID FY2005 Budget Justification to Congress, Annex III: Europe and Eurasia, 49.
⁸ Discussions with U.S. and European Balkan experts, March 2004.
⁹ European Commission, “Commission Staff Working Paper: Bosnia and Herzegovina,
Stabilization and Association Agreement 2004,” March 30, 2004.

Efforts to promote Bosnia’s unity through the strengthening of state-level institutions
have also met with indifference or opposition. Under international pressure, new
institutions have proliferated, often without the funding or staffing to make them
effective.
Analysts have therefore expressed concern about the sustainability of Bosnia’s
reforms and the country’s long-term unity. According to some analysts, part of the
problem is due to the shortcomings of the Dayton constitution. They say the
governing structures set up by Dayton are too complex, with too many layers of
government that are too expensive and not accountable to the people. Various
proposals have been made for simplifying the structure, including eliminating the
entities to create a unitary state, or a system of cantons within a more conventional
federation.¹⁰
Another problem is that while Bosniaks overwhelmingly favor a united Bosnia,
Serbs, and to a lesser extent Croats, do not. For example, a State Department-
sponsored opinion poll in the Republika Srpska (RS) in 2003 found that 69% favored
RS independence from Bosnia. Another poll from the same source found that former
Bosnian Serb leader and indicted war criminal Radovan Karadzic is the most popular
politician in the RS. On the other hand, 55% of Bosnian Serbs expect that,
notwithstanding their wishes, Bosnia will remain a single state. The poll found that
41% of Bosnian Croats favor remaining part of Bosnia, while 54% favor
independence or union with Croatia. Interestingly, Bosnian Croat support for Bosnia
has sharply increased since 1999, at the same time as Croatian governments have
publicly renounced territorial claims on Bosnia.¹¹
Ashdown and previous High Representatives have tried to exhort local leaders
to take “ownership” of reforms, without much success. The international community
also tried to influence the domestic political scene by helping non-nationalist parties
win elections and form government coalitions. However, these efforts were not very
successful, due to the heterogeneity of the coalitions and the continued popularity of
nationalist groups, which successfully play on the fears of people and still have
effective patronage networks.
After the victory of the three major nationalist parties in the October 2002
general elections, Ashdown has tried to work with the new nationalist leaders on
reform issues, but has also jumped into the middle of the Bosnian political system
himself, campaigning under the slogan “Jobs and Justice.” He has intervened
actively in the making of laws and continues to fire and take other actions against
obstructionist politicians and parties. His moves have angered Bosnian leaders at
times, but there has been little public protest against his actions. Indeed, an October
2003 State Department-sponsored opinion poll indicated little public awareness of
the “Jobs and Justice” program. According to the same poll, Ashdown is supported

¹⁰ For one such proposal see European Stability Initiative, “Making Federalism Work: A
Radical Proposal for Practical Reform,” ESI website [http://www.esiweb.org].
¹¹ “Bosnian Political Mood Hits Post-Dayton Low,” State Department Office of Research,
September 22, 2003 and “Bosniaks and Bosnian Croats Support, Serbs Oppose Unified
State,” State Department Office of Research, October 2, 2003.

by two-thirds of Bosniaks, but is opposed by two-thirds of Bosnian Croats and 94%
of Serbs.¹²
Bosnian critics of Ashdown charge that he has neglected the non-nationalist
opposition, which could have been his natural allies. Now, they charge, he is at a
political dead-end — partnered with ruling nationalist elites with little interest in
reform, and an opposition too weak and disenchanted to serve as a viable
alternative.¹³ Ashdown has replied that he has had to work with whomever the
Bosnian people elect as their leaders. Some analysts support Ashdown’s actions,
saying that however paradoxical it may seem, interventionism is needed in the short
term to provide the basis for a self-sustaining Bosnia.¹⁴ On the other hand, other
experts are concerned that local institutions cannot develop as long as OHR continues
its active, and some critics say undemocratic, intervention in Bosnian affairs. They
suggest that the development of responsible democratic local institutions should take
priority, and that OHR’s use of its powers should be more limited and more
accountable to the Bosnian people.¹⁵
Possibly acting in the international community’s favor in the long run is the
slowly increasing realization of Bosnian politicians that it is in their own interest to
promote Bosnia’s integration into the European Union. The 2003 EU summit in
Thessaloniki, Greece, held out the prospect of Bosnia and other countries in the
region joining the EU when they are ready. The problem with possible EU
membership as a motivating factor is that it may be too distant to have as powerful
an effect as it has had in Central Europe. As of early 2005, Bosnia continued to fall
short in implementing the 16 measures set by an EU feasibility study before it can
begin negotiations on a Stabilization and Association agreement, a first step in the
long road to EU membership. Bosnia’s central government has set a goal of EU
membership by 2009, although most observers view this goal as unrealistic at
present.
What would be the impact of reduced international intervention in Bosnia’s
political system and a decrease in economic assistance, particularly if reforms are
slowed as a result? It appears unlikely that the situation could explode into conflict
again in the near future, perhaps most importantly because the geopolitical situation
in the region has changed. Bosnia’s civil war was in part the playing out of the
designs of nationalist leaders in Croatia and Serbia on Bosnian territory. According
to a State Department sponsored opinion poll, about a third to slightly less than one-
half of the three main ethnic groups believes that a return to fighting could occur

¹² “Bosnian Views Diverge on the International Community,” State Department Office of
Research, October 8, 2003.
¹³ Mirsad Bajtarevic and Nerma Jelacic, “Ashdown Celebrates Lonely Anniversary,” IWPR
Balkan Crisis Report, no. 490, April 2, 2004.
¹⁴ International Crisis Group, “Bosnia’s Nationalist Governments: Paddy Ashdown and the
Paradoxes of State Building,” July 22, 2003, available at [http://www.crisisweb.org].
¹⁵ See Gerald Knaus and Felix Martin, “Travails of the European Raj: Lessons from Bosnia
and Herzegovina,” Journal of Democracy, July 2003, 60-74.

within the next few years. Only about one-tenth are “very concerned” about such an
outcome.¹⁶
The downfall of nationalist regimes in Serbia and Croatia in 2000 reduced
concerns about a partition of Bosnia, as new democratic regimes in both countries put
domestic reforms and improving relations with the West over past nationalist projects
to redraw borders. The comeback of the nationalist HDZ party in Croatia and
nationalist forces in Serbia in 2003 have caused some concern. However, the HDZ
government has shown no interest in carving up Bosnia again, knowing that to do so
would put an end to achieving its main foreign policy goal, joining Euro-Atlantic
institutions. Similar views are held by leaders in Serbia, although some voices have
raised the possibility of a partition of Bosnia if Kosovo is permitted to become
independent from Serbia. The Serbian political scene remains unsettled, and a
victory by the ultranationalist Radical Party in future elections could conceivably
pose a danger to Bosnia’s future.
On the other hand, even if a poor, disunited, unreformed Bosnia could be
nominally stable, it still might also present problems. The weakness of its
institutions could provide an environment conducive to organized crime activities
such as trafficking in weapons, drugs and persons, as well as the operations of
terrorist groups, which could threaten U.S. and European interests.
U.S. Policy Issues
SFOR and Partnership for Peace
Due in part to the improving security situation in Bosnia and the need to shift
troops to the war on terrorism and other responsibilities, the NATO-led SFOR has
undergone deep reductions in recent years. In December 2004, The European Union
took over peacekeeping duties. The EU force (EUFOR) of about 7,000 troops uses
NATO’s planning capabilities and other assets, under what is known as the “Berlin
Plus” formula. Fewer than 200 U.S. military personnel remain in Bosnia as part of
a small NATO contingent to assist Bosnian defense reform, search for indicted war
criminals, and fight terrorism.
It is unclear whether the EU successor force will have the credibility that SFOR
enjoyed partly due to the U.S. presence. Bosniaks in particular have viewed the
United States as their best ally among leading Western nations, dating back to the
perceived U.S. role in helping to put an end to the war by permitting the Bosniaks to
arm themselves. In contrast, European countries are viewed less favorably, in part
due to the perceived failures of the European-led U.N. Protection Force
(UNPROFOR) during the war. Some observers claim that many European troops in
KFOR were much less effective than U.S. troops during the March 2004 riots in

¹⁶ “Bosniaks and Bosnian Croats Support, Serbs Oppose Unified State,” State Department
Office of Research, October 2, 2003.

Kosovo, due at least in part to the restrictive rules of engagement they had received
from their governments.¹⁷
An important focus of U.S. and international efforts in Bosnia is to promote
defense reforms that will permit Bosnia to join NATO’s Partnership for Peace (PFP)
program. Bosnia and Serbia and Montenegro are the only two European countries
that are not members of PFP. SFOR, OHR and Western governments have pressed
Bosnia to undertake defense reforms that will permit Bosnia to be admitted as a PFP
member. These reforms include the unification of Bosnia’s two armies under a
single command structure, including a Minister of Defense and Chief of Staff. The
army would not be unified at lower levels, however. It would eventually comprise
three 4,000-man brigades. One brigade would be Bosniak, another would be Serb,
and the third Croat.¹⁸ The supreme command of this force would be held by Bosnia’s
collective presidency, which also is composed of one Bosniak, one Serb and one
Croat.
The Bosnian parliament has passed the legislation needed to create the new
command structure. It approved a new defense minister in March 2004, after two
previous Bosnian Serb-nominated candidates for Defense Minister were rejected by
Ashdown due to their questionable conduct during the war. Reforms that are needed
include staffing state-level defense institutions with qualified personnel, providing
these institutions with adequate funding and premises, and eliminating the entity
Defense Ministries.¹⁹
War Crimes and Cooperation with the ICTY
The most important factor hindering Bosnia’s membership in PFP and opening
talks on a Stabilization and Association agreement with the EU is Bosnia’s lack of
cooperation with the International Criminal Tribunal for the former Yugoslavia
(ICTY). An important focus of current U.S. and international efforts in Bosnia is to
apprehend indicted war crimes suspects and transfer them to the ICTY, particularly
former Bosnian Serb leader Radovan Karadzic and former army chief Ratko Mladic.
The Bosnian government and the two entity governments are required by the Dayton
Peace Agreement to fully cooperate with the ICTY. According to ICTY chief
prosecutor Carla Del Ponte, the Federation has largely cooperated with the ICTY,
but the RS has not. RS officials have not arrested a single war criminal indicted by
the ICTY since the peace accords were signed.²⁰ Indeed, some of them have
allegedly assisted indictees to evade capture. Therefore, the transfer of war criminals
thought to be hiding in the RS to the ICTY has been left almost entirely to voluntary
surrenders of suspects, as well as action by international peacekeepers and agents of
Western governments.

¹⁷ Discussion with a Serbian official, May 2004.
¹⁸ RFE-RL, February 5, 2004.
¹⁹ OHR website, [http://www.ohr.int].
²⁰ However, the RS government in November 2004 arrested eight Bosnian Serb war crimes
suspects wanted by Bosnian authorities.

The United States and its allies are motivated in their search for war criminals
by a desire for justice as well as a belief that the arrest and transfer of these two men
and other war criminals would deal a serious blow to those forces obstructing
reforms in Bosnia. According to press reports, both Mladic and Karadzic move
within Bosnia and between Bosnia and Serbia and Montenegro. Both EUFOR and
the remaining NATO presence in Bosnia participate in developing intelligence for
the possible seizure of war crimes suspects, although the actual seizures themselves,
if they occurred, would likely be carried out by specially-trained teams based outside
of Bosnia.
High Representative Ashdown has tried to weaken the support network for the
war criminals. He has removed many RS officials from their posts, including high-
ranking Bosnian Serb police officers, and Mirko Sarovic, a senior official of the
Serbian Democratic Party, formerly headed by Karadzic and now a ruling party in the
Republika Srpska. Ashdown has frozen the assets of these and other persons
suspected of helping war criminals, as has the European Union. The United States
has also added these people to a list of persons who are barred entry into the United
States and whose U.S. assets are frozen. In April 2004, Ashdown blocked state
funding to the nationalist Serbian Democratic Party (SDS), charging that the SDS had
helped to finance Karadzic’s efforts to avoid arrest. Skeptics have noted that most
SDS funding does not come from the state, but from state-owned firms run by SDS
supporters.²¹
In December 2004, in a further move to punish the Republika Srpska for its non-
compliance on war crimes issues, Ashdown removed nine Bosnian Serb officials of
the State Border Service, the Intelligence and Security Service, and the RS Interior
Ministry. Ashdown also announced plans to abolish entity Interior and Defense
Ministries by fall 2005, leaving only central government ministries for these
functions. Ashdown warned that he will take further steps against the assets and
institutions of the RS if Bosnian Serb leaders continued to block Bosnia’s PFP
membership by failing to cooperation with the ICTY. In taking such moves,
Ashdown also may be using RS war crimes non-compliance to weaken the RS and
the whole system of ethnically-based entities set up by the Dayton Accords, which
some observers see as a key stumbling block to reform and Euro-Atlantic integration.
The United States also introduced measures in December 2004 to punish the RS
for non-cooperation with the ICTY, freezing all SDS assets in the United States and
imposing a visa ban on all members of the SDS and the Party for Democratic
Progress (PDP), a key member of the RS government. A number of high level
Bosnian Serb leaders in the RS and the Bosnian central government resigned their
posts in protest.
The United States has offered a $5 million reward to anyone providing
information leading to the capture of Karadzic or Mladic. Del Ponte claimed that
Karadzic had narrowly escaped capture during an SFOR raid in the Bosnian Serb city
of Pale in February 2004. Subsequent SFOR raids have failed to capture Karadzic,

²¹ Institute for War and Peace Reporting (IWPR), Balkan Crisis Report No. 492, April 16,

2004.

including a raid in April 2004 that resulted in severe injuries to a Serbian Orthodox
priest and his son. International critics of SFOR say that it has failed to develop
much useful intelligence on the whereabouts of war criminals and does not
coordinate sufficiently with the ICTY and other international organizations in
Bo s n i a .²²
In addition to pursuing Karadzic and Mladic, the United States and the
international community have promoted efforts to have war criminals tried by local
courts. This policy is part of the international “completion strategy” for the ICTY,
adopted in U.N. Security Council Resolution 1503 in August 2003. The resolution
calls for the ICTY to complete its investigations by 2004, its trials by 2008, and all
appeals by 2010.
In October 2003, international donors held a conference on the establishment
of a war crimes chamber in the state court of Bosnia and Herzegovina. The United
States contributed $5 million and said it would contribute an additional $5 million
in 2004. However, it is unclear how effective the new court will be. Bosnian courts
have tried a few war crimes cases so far, but have been criticized for long delays,
insufficient protection for witnesses, and ethnic bias. Recognizing this fact, the court
will have international judges and prosecutors working with their Bosnian
counterparts for the first few years, similar to Bosnian courts currently charged with
prosecuting high-profile organized crime cases. However, the court will have to
depend on local police forces to assist its work. Domestic war crimes prosecutions
will also depend on Ashdown’s efforts to improve Bosnia’s judicial system,
including by dismissing corrupt and ineffective prosecutors and judges, as well as
imposing tougher criminal laws.
Terrorism
Since the September 11, 2001 terrorist attacks, the main focus of U.S. foreign
policy has been the war on terrorism. Terrorism has also become an important focus
of U.S. policy toward Bosnia, which has been a haven for Al Qaeda and other
terrorist groups, although it has not played as important a role in this regard as other
European countries such as Spain, Germany and Britain. One way in which Bosnia
is different from other countries in Europe is the role of several thousand Islamic
fundamentalist fighters during the 1992-1995 war in Bosnia. Most left Bosnia at U.S.
insistence after the deployment of the NATO-led peacekeeping force in December
1995. However, a few stayed and became Bosnian citizens by marrying Bosnian
women. Perhaps more troublesome have been Al Qaeda ties among some Islamic
charities and humanitarian organizations that proliferated during and after the war.
Al Qaeda used a few of them for planning attacks in Bosnia and elsewhere. Some
Al Qaeda operatives in Bosnia reportedly have had connections to members of
Bosnia’s intelligence service, another legacy of Bosniak wartime cooperation with
Islamic militants. In 2003, six former Federation officials were investigated for their

²² IWPR Balkan Crisis Report No. 490. April 2, 2004.

role in helping to establish a terrorist training camp in Bosnia with Iran’s help during
the mid-1990s.²³
The issue of terrorism has been politicized in Bosnia to some extent, as each
ethnic group has used the label “terrorist” to define its adversaries. Some Bosnian
Serb officials have alleged that Bosniaks were harboring Islamic terrorists. However,
it should be stressed that Bosnian opposition to terrorism has been remarkably broad,
despite the still-deep ethnic divide in the country. The United States enjoys a strong
reservoir of support in Bosnia, especially among Bosniaks, for bringing peace to the
country and providing post-war aid. In addition, Bosniaks are known in the Muslim
world as particularly secular and European in outlook. This has often caused friction
between foreign Islamic extremists and many ordinary Bosniaks. Efforts by foreign
Islamists to recruit Bosniaks into their organizations have met with limited success.
Some Bosniaks also fear that the terrorists will give Bosnia a bad name in Europe,
thereby hindering their ability to travel there, and setting back Bosnian efforts to join
European institutions in the long run.²⁴
In general, the Bosnian constitution gives domestic powers to fight terrorism to
the entities, while the central government deals with international efforts to fight
terror. Bosnian efforts to fight terrorism are hampered by the weakness and
inefficiency of its government institutions, which have created an environment in
which crime and corruption have flourished. One example of this corrupt
environment was the 2002 sale of arms from Bosnia to Saddam Hussein’s Iraq.
Ashdown’s efforts to strengthen state-level institutions and the rule of law may
increase the effectiveness of Bosnia’s fight against terrorism. With help from the EU
and United States, Bosnia has deployed a State Border Service throughout virtually
all of the country’s territory. Ashdown is also pushing for implementation of
legislation to increase the effectiveness of the State Information and Protection
Agency, which is charged with combating terrorism, organized crime, trafficking and
smuggling of weapons of mass destruction. However, as with other issues,
Ashdown’s efforts have been slowed by local politicians opposed to an increase in
central government power. The 2003 State Department report on Patterns of Global
Terrorism said that Bosnia’s commitment to the fight against terrorism has slowed
since the victory of nationalist forces in Bosnia’s October 2002 elections. On the
other hand, the report notes that the Federation Financial Police has continued to
shut down NGOs and bank accounts linked to terrorists.²⁵
The presence of SFOR and other international officials on Bosnia’s territory has
also helped in the fight against terrorism. NATO troops and intelligence services can
work with their Bosnian counterparts and independently track down and arrest
suspected terrorists. The powerful influence exercised by international officials in

²³ Patterns of Global Terrorism 2003, available from the State Department website at
[ h t t p : / / www.s t a t e . go v/ ] .
²⁴ Colin Woodward, “In Rebuilt Bosnia, No Terror Toehold,” Christian Science Monitor,
March 24, 2004, 1.
²⁵ 2003 State Department Patterns of Global Terrorism report.

Bosnia gives the United States more freedom to arrest and deport terrorists than in
many other countries, which might object on civil liberties or other grounds.
However, the delivery of five suspected terrorists in January 2002 by the Bosnian
government to SFOR was criticized by some Bosnian legal experts as a violation of
the rule of law. After SFOR’s withdrawal in December 2004, a NATO headquarters
in Bosnia continues to play a role in anti-terrorist efforts in Bosnia, as does the EU
successor force to SFOR.
U.S. Aid
U.S. aid to Bosnia has declined gradually in recent years, after an initial post-
war surge to deal with urgent humanitarian and reconstruction needs. The United
States is the largest bilateral donor to Bosnia, although the European Union and the
World Bank are the largest donors overall. U.S. aid has shifted to programs to help
Bosnia develop democratic institutions and a free market economy. From Bosnia’s
independence in 1992 through FY2002, the United States provided $1.56 billion in
aid. The United States provided $44.7 million in aid for Bosnia under the SEED
program in FY2004, and an estimated $41 million for FY2005. The Administration
has requested $40 million in SEED funding for Bosnia in FY2006. U.S. aid
programs focus on such issues as strengthening the country’s legal system,
supporting small and medium-sized businesses, and making refugee returns
sustainable, through infrastructure repair, strengthening utility companies and helping
refugees become economically more self-sufficient.²⁶

²⁶ U.S. Agency for International Development, U.S. Overseas Grants and Loans, July 1,
1945-September 30, 2002, 170 and FY2006 Budget Summary and Highlights, International
Affairs Function 150, February 2005.