BOSNIA: DODIK CHALLENGES STATE COMPETENCIES

C O N F I D E N T I A L SECTION 01 OF 02 SARAJEVO 001058

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/11/2017
TAGS: BK PGOV PREL
SUBJECT: BOSNIA: DODIK CHALLENGES STATE COMPETENCIES

REF: SARAJEVO 925

Classified By: Ambassador Douglas L. McElhaney. Reasons 1.4 (b),(d).

Summary
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1. (C) On May 4, Republika Srpska (RS) PM Milorad Dodik
publicly announced his intention to reverse past transfers of
RS competencies to the Bosnian state. Dodik's announcement
was followed closely by a lawsuit, filed by SNSD
parliamentarian Milorad Zivkovic, challenging the
constitutionality of the state Law on Procurement. Zivkovic
acknowledged his lawsuit is part of Dodik's broader
initiative and the Law on Procurement, due to its widespread
unpopularity in both the Federation and the RS, was chosen as
a test case for the strategy. Zivkovic added that the RSNA
has identified 48 other transfers of competencies to be
challenged in court. Zivkovic asserted that nationalist
rhetoric from Bosniak Haris Silajdzic, particularly his
proposal to remove Srebrenica from the jurisdiction of the
RS, precipitated Dodik's approach. Dodik's motives are
unclear. His private comments are reassuring and suggest his
latest rhetorical salvo against the state has short-term
political aims - increasing his leverage in Indirect Taxation
Authority (ITA) negotiations, and countering Bosniak member
of the Tri-Presidency Haris Silajdzic's anti-RS rhetoric.
Something more significant and sinister could be at work as
well. Regardless, Dodik's approach contributes to the
political gridlock paralyzing Bosnia and threatens to still
further complicate the reform process. End Summary.

Dodik's Opening Salvo
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2. (U) At his weekly press conference on May 4, Republika
Srpska (RS) Premier Milorad Dodik announced his intention to
begin the process of "abolishing prior RS government consent"
to past transfers of competencies from the RS to the State.
Dodik declined to be drawn out on specifics but asserted that
his decision was motivated by the ineffective execution of
the competencies by the state. Dodik's comments on the
devolution of competencies followed a long statement on the
urgency of returning to the April package of constitutional
reforms. He stated that if the April package is abandoned,
new negotiations must at a minimum recognize the RS as a
"federal unit" within Bosnia with "clear legislative,
executive and judiciary competencies."

Lawsuit Filed
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3. (C) On May 5, Ambassador discussed the press conference
statements with Dodik. The Ambassador stressed that, as the
USG has repeatedly told Haris Silajdzic, politicians who seek
to reverse Bosnia's reform process are not acting in the
interests of its citizens. Dodik asserted that his comments
were directed primarily towards an OHR-imposed settlement of
the Indirect Taxation Authority (ITA) dispute (reftel) and
not intended to challenge the authority of the state. He
also claimed that the cumbersome state-level Law on
Procurement was hampering RS efforts to meet its commitments
to Srebrenica. The Ambassador replied that the best way to
address any deficiencies in the law through the legislative
process rather than challenging the constitutionality of a
law that his own party helped pass.


4. (C) On May 8, Milorad Zivkovic, SNSD Deputy Chairman in
the State House of Representatives, announced he had filed a
suit with the Constitutional Court challenging the legality
of the state Law on Public Procurement. The law, which
entered into force in November, 2004 and was one of the EU
conditions for a Stabilization and Association Agreement
(SAA) with Bosnia, was designed to institute uniform
contracting procedures for the Federation, the RS and Brcko
District under a state level Procurement Agency. The law has
been unpopular with both the RS and Federation governments
due to its introduction of a tender system for official
contracting.


5. (C) Zivkovic told us that the lawsuit was part of PM
Dodik's strategy to challenge the constitutionality of all
past competency transfers. He said the RS National Assembly
had convened a working group to identify competencies whose
transfer to the State should be challenged. Zivkovic stated
that the group had identified 48 such competencies and would

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pursue a similar legal strategy filing lawsuits challenging
each in turn. The original transfers had been signs of
goodwill on the part of the RS government which had been met
with obstructionism and hostility by Federation-based
political leaders. Zivkovic said that with the recent rise
in nationalist politics by Bosniak leaders, with Haris
Silajdzic openly calling for the abolition of the RS, it was
time for the RS to reconsider its acquiescence to the
transfers.


6. (C) Although RS officials have not publicly discussed
other competencies that may face legal challenges, RS Finance
Minister Aleksandar Dzombic has repeatedly made reference to
repealing ITA-related laws specifically legislation creating
the joint account in favor of returning to a three-account
system. RS Interior Minister Stanislav Cadjo separately
suggested to OHR that intelligence reform and the creation of
SIPA could fall under the RSNA review of competencies.

Comment
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7. (C) Dodik's motives are unclear. His comments to the
Ambassador suggest he is likely signaling his determination
to protect the legal integrity of the RS in the face of
Haris Silajdzic's repeated calls for the elimination of the
RS. Nonetheless, the current lawsuit and those that may
follow could represent a threat to the existence and
functioning of hard-won state-level competencies such as the
ITA. We have made clear to him that his rhetoric and
threatened actions are counterproductive and that efforts to
improve the functionality of the state are not incompatible
with efficient government in the RS. Efforts to undercut
successful state-level reforms are as unacceptable as Haris
Silajdzic's efforts to undermine Dayton structures. End
Comment.
MCELHANEY