On 4 October 2017 the Government of the Republic of Srpska held a joint session with the Government of the Federation of BiH in Sarajevo. The session focused on the issue of grey economy and adoption of a joint Action Plan to address this issue.
Prime Minister of the Republic of Srpska Zeljka Cvijanovic stated after the session that the Action Plan which the two Governments discussed was an extensive document which was setting concrete measures, clear deadlines and precise stakeholders.
The Prime Minister said that they also discussed other modes of cooperation and how entity governments could address their joint initiative to other governance levels primaryily the Council of Ministers of BiH that could contribute to common goals and that is fighting and preventing grey economy.
"The agenda included certain measures discussed earlier within the talks on the Reform Agenda and certain improvements have been recorded", Prime Minister Cvijanovic said and added that the results of such a work have been manifested through higher inflow of funds into the budget.
The Government ministers also discussed how to protect domestic economy especially the wood processing industry and provide enough raw material for their production.
The Government of the Republic of Srpska for example passed a Decree applicable for six months which foresaw the timber export and trade ban and the Federation Government announced it would pass the same measure. Protection of domestic agricultural production and taking some concrete measures to protect farmers and agricultural producers had also been one of the matters of discussion.
Another issue of discussion was how to use non-prospective defense property for the purpose of entity development. Prime Minister Cvijanovic stated in this regard that the interest of the Republic of Srpska and the Federation of BiH was to turn such complexes which are now unutilized into business zones and places that would generate new employment.
Prime Minister of the Federation of BiH Fadil Novalic stated that the main reason for adopting 27 concrete measures to combat grey economy was related to the fact that 25% of the gross domestic product was in the domain of the grey economy.
"This in itself is not the main issue since grey economy is also a kind of economy and provides living for the people. The grey economy however generates certain deformities in the society since the companies that operate within the grey economy zone are, as oppose to legal companies, cheaper from those that regularly pay their obligations", Prime Minister Novalic said and added that those deformities had urged the need for the two Governments to work together on this item of the Reform Agenda.
"If we work only in one entity and not in the other then the problem or the benefit moves to another entity. Let us take notary activities for example. If some thing is not regulated in the Republic of Srpska, then thy all move to Federation of BiH or vice versa", Prime Minister Novalic said.
Federation Prime Minister emphasized that the main goal was to eliminate those deformities and commended the session efficiency saying that he never attended a government session which resolved so many technical issues and which resulted in so many solutions, proposals and conclusions.
Speaking about the need to adopt changes on excise taxes, Mr. Novalic said that that this issue has turned into the question whether BiH needs roads and added that nobody in Federation of BiH could give a negative answer to that question including the Government of Federation of BiH.
Prime Minister Novalic emphasized that BiH needed investments in the sector of infrastructure and that higher excise taxes were needed but that the problem was of technical nature and related to different money flow in the Federation of BiH and in the Republic of Srpska and that the Government of the Federation of BiH was guaranteeing that the money would be used in accordance with laws and legal regulations.
"At one of our next session we shall pass a Decree on the Export Ban for Timber Trunks. As a country we are recognized by the wood processing and in both entities that industry employs 50,000 people. Some assessments say that 70% of that industry was exporting wood at low processing levels. The measure of placing the ban on timber export would close possibility to export raw materials at the lowest phase of processing that would later on enable to examine the effects of this measure", Prime Minister Novalic said.
Prime Minister of the Federation of BiH further stated that the agreement was reached to work on protection of domestic agricultural production and that four respective ministries would sent a proposal of measures in this regard to the Council of Ministers of BiH and that cooperation between the two Governments and ministries would continue.
Assistant Minister of Finance of the Republic of Srpska Jovo Radukic and Advisor to the Federation of BiH Prime Minister Zlatko Hurtic have been tasked to prepare a list of consolidated priority measures for the fight against grey economy and define the mechanism of inter-entity coordination and monitoring and to submit a harmonized document by 1 November to entity governments for approval.
The Governments of Federation of BiH and Republic of Srpska accepted today during their third joint session held in Sarajevo the Information Note on the activities taken with regard to combating grey economy and agreed on the Proposal of Priority Measures for mutual cooperation in combating grey economy.
Federation Ministry of Agriculture, Water Management and Forestry and the Ministry of Agriculture, Forestry and Water Management of the Republic of Srpska have been commissioned to prepare a text of joint Initiative within 30 days that Prime Minister Cvijanovic and Prime Minister Novalic would forward to the Council of Ministers of BiH.
The two Governments would also forward a Joint Initiative to the Council of Ministers of BiH for passing a decision on banning the timber trunks export and trade.
The Governments of Federation of BiH and Republic of Srpska accepted the Information Note on the status of non-prospective defense property and expressed hope that this matter would be resolved in accordance with valid regulations, the priority to lift the ban on disposing of military assets which has common and public interest for both entities and to be placed in the function of development and fostering of new employment in the Republic of Srpska and the Federation of BiH,.
The two Governments commissioned the Ministers of Justice to nominate persons that would deal with the issue of the legal status of non-prospective defense property.