summary of the case
| status: | closed by Ministerial Council Decision / not complied after Art.91 MC Decision |
|---|---|
| registered: | ex officio |
The situation of the gas sector in Bosnia and Herzegovina has long been an issue of concern to the Secretariat. This goes in particular for the lack of legislation and regulatory institutions at the state level, but also concerns the arrangements made at the level of the two entities, Republika Srpska and the Federation of Bosnia and Herzegovina. The lack of an appropriate legal framework constitutes an obstacle to the development of the gas sector both on national and regional level, and therefore jeopardizes the achievement of a key objective of the Energy Community Treaty. The Secretariat assisted extensively in overcoming this situation.
In the Secretariat’s view, issues of non-compliance by Bosnia and Herzegovina in the gas sector include the lack of regulatory authorities for gas in the Federation of Bosnia and Herzegovina, the lack of proper legal, functional and account unbundling in either entity, the lack of properly set and published network tariffs, issues related to exemptions for new infrastructure, the lack of market opening in line with the deadlines set in the Gas Directive 2003/55/EC. The Secretariat further requests Bosnia and Herzegovina to transpose the provisions of the Gas Regulation 1775/2005 and the Security of Supply Directive 2004/67/EC.
On 24 October 2013, the Ministerial Council decided on the failure by Bosnia and Herzegovina to comply with certain obligations under the Treaty related to the transposition of Directive 2003/55/EC. With the adoption of Decision 2013/04/MC-EnC, the procedure under Article 91 of the Treaty in Case ECS-8/11 is closed. On 18 July 2014, the Secretariat initiated Case ECS-8/11S by submitting a Reasoned Request to the Ministerial Council under Article 92 of the Treaty.
procedural history
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7 October 2011: Opening Letter
Case
On 7 October 2011, the Secretariat sent an Opening Letter to Bosnia and Herzegovina in accordance with Article 12 of the Rules of Procedure for Dispute Settlement. In the Opening Letter, the Secretariat takes the preliminary view that Bosnia and Herzegovina failed to fulfill its obligations under the Energy Community Treaty by not having put in place appropriate legislation in the gas sector.
Procedure
By sending an Opening Letter, the Secretariat initiates a preliminary procedure, the purpose of which is giving the Party concerned the possibility, within two months, to react to the allegation of non-compliance with Energy Community law, and enabling the Secretariat to establish the full background of the case.
According to Articles 6 and 16 of the Rules of Procedure for Dispute Settlement, interested parties may be granted access to the case file and may submit written observations on the present case to the Secretariat within one month from 7 October 2011.
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24 January 2013: Reasoned Opinion
Steps taken
On 24 January 2013, the Energy Community Secretariat submitted a Reasoned Opinion in Case ECS-8/11 against Bosnia and Herzegovina. In the Secretariat’s view, the country’s legislation governing the gas sector fails to implement the acquis communautaire on gas, namely Directive 2003/55/EC and Regulation (EC) No 1775/2005. Having taken into account the reply of the Government to the Opening Letter the Secretariat maintains the findings made therein.
Reasoning
After years of discussions between the two entities in Bosnia and Herzegovina, and despite the Opening Letter sent in October 2011, there is still no gas legislation in place at the State level. The Ministry of Foreign Trade and Economic Relations itself acknowledges that the development of gas legislation in the country is in a deadlock.
Procedure
With the Reasoned Opinion, Bosnia and Herzegovina was requested to rectify the identified issues of non-compliance within a time-limit of two months. The Secretariat reiterates its offer to assist the country in drafting compliant legislation on State level if there is political will to do so.
A Reasoned Opinion is the second step in a dispute settlement procedure initiated by the Secretariat under Article 90 of the Energy Community Treaty. In the light of the reply by the Government, the Secretariat may submit the case to the Ministerial Council for a decision on Bosnia and Herzegovina’s compliance with Energy Community law.
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1 October 2013: Reasoned Request
Steps taken
In May 2013, the Secretariat of the Energy Community submitted a Reasoned Request to the Ministerial Council concerning case ECS-8/11 on gas legislation in Bosnia and Herzegovina, pursuant to Article 90 of the Energy Community Treaty and Article 28 of the Rules of Procedure for Dispute Settlement.
Reasoning
Despite the recent entry into force of the amendments to the Law on Gas in Republika Srpska and the development of a draft Law on Gas by the Federation of Bosnia and Herzegovina, the Secretariat considers that Bosnia and Herzegovina still fails to comply with the acquis on gas in many respects.
Procedure
In the Reasoned Request, the Secretariat seeks a Decision from the Ministerial Council that Bosnia and Herzegovina fails to comply with its obligation from the Energy Community Treaty to implement the acquis communautaire on gas, namely Directive 2003/55/EC and Regulation (EC) No 1775/2005. The Advisory Committee established by the Rules of Procedure for Dispute Settlement gave its Opinion on the Reasoned Request on 11 September 2013. The case will be heard by the Ministerial Council on 24 October 2013.
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24 October 2013: Ministerial Council Decision on failure
Steps taken
After having considered the Opinion by the Adivsory Committee, the 11th Ministerial Council took a decision on the failure by Bosnia and Herzegovina to comply with certain obligations under the Treaty.
In the Article 1 of the Decision, the failure is listed in detail. In Article 2 of the Decision, the ministers urge Bosnia and Herzegovina to "take all appropriate measures to rectify the breaches identified in Article 1 and ensure compliance with Energy Community law, in cooperation with the Secretariat, by June 2014". Bosnia and Herzegovina is asked to report to the Ministerial Council about the measures taken. As stated in its Conclusion, the "Ministerial Council will consider the failure to do so as a serious and persistent breach within the meaning of Article 92 of the Treaty". In such a case, it would invite the Secretariat to launch the required proceedings.