BOSNIA- DODIK BACKS OUT OF DEFENSE PROPERTY DEAL,

C O N F I D E N T I A L SECTION 01 OF 03 SARAJEVO 000246 SIPDIS SIPDIS DEPT FOR EUR (DICARLO),EUR/SCE (HOH, SILBERSTEIN, FOOKS, STINCHCOMB),EUR/RPM DEFENSE FOR FATA, BEIN NSC FOR BRAUN E.O. 12958: DECL: 02/07/2018 TAGS: PGOV PREL MARR BK SUBJECT: BOSNIA- DODIK BACKS OUT OF DEFENSE PROPERTY DEAL, SIGNALS INTENT TO KEEP ARMS AND AMMUNITION REF: A. SARAJEVO 162 ¶B. SARAJEVO 150 ¶C. SARAJEVO 129 Classified By: Ambassador Charles English for reasons 1.4 (b) and (d) SUMMARY -------------- ¶1. (C) Reneging on a clear commitment to the Ambassador and NATO HQ, Republika Srpska (RS) Prime Minister Milorad Dodik failed to have his government approve the transfer agreement on movable defense property on February 7 and instead referred the matter to a working group to negotiate a "compromise text" with the Council of Ministers. We had worked closely with NATO HQ to finalize a transfer agreement that would ensure that all weapons, explosives and ammunition were transferred to the state. On January 31, the Ambassador and NATO officials agreed to amend the text to address reasonable concerns raised by Dodik and RS negotiators. Dodik himself had pledged numerous times to support the January 31 agreement as drafted. The Federation government approved the text on February 6, and PM Spiric's office signaled their intention to have the agreement approved at the next session of the Council of Ministers (COM). Dodik's decision not to honor his commitments sabotages this work. It is now extremely unlikely that movable defense property issues will be resolved prior to the February PIC. This action also raises profound questions about his long-term strategy in the RS, particularly in light of his aggressive campaign to undermine state-level institutions. We believe that we cannot back away from this latest challenge from Dodik, as it is directly tied to the maintenance of a safe and secure environment in Bosnia. End Summary. RS GOVERNMENT FAILS TO APPROVE PROPERTY AGREEMENT -------------- -------------- ¶2. (C) Despite numerous commitments made to the Ambassador and NATO HQ Sarajevo, RS Prime Minister Milorad Dodik did not press the RS government to approve the transfer agreement on movable defense property to which he had previously agreed at its session February 7. The RS government instead decided to form a RS working group to "harmonize the agreement." We also understand that Dodik is insisting that the Council of Ministers must first approve a draft agreement. Presumably, the RS working group will then "harmonize" its proposals with the CoM's agreement, working out "points of contention" and amending the CoM draft to address "entity concerns." We will have a clearer understanding of the negotiating gambit early next week, but it strikes us as another attempt to end run our bottom-line about the transfer of weapons from the entities to the state. TEXT INCORPORATES ALL RS AMENDMENTS -------------- ¶3. (C) After a lengthy discussion with the Ambassador January 31 in Banja Luka, Dodik affirmed that he supported the principle that all arms and ammunition must be transferred to the state, and stated he would support the agreement and secure its approval with a few small technical changes. Lawyers from NATO HQ then met with Dodik's Chief of Staff, RS "Military" Advisor Dusko Cetkovic and other senior Dodik staff to amend the agreement along the lines proposed by Dodik: -- that surplus non-lethal movable property would remain the property of the entities unless MOD declared within eight months that it was necessary for current or future defense needs; -- that decisions by the MOD commission tasked with disposition (i.e. sale, donation, destruction) of surplus property would be made by consensus; and, -- that the state would execute outstanding contracts for the SARAJEVO 00000246 002 OF 003 sale of defense items previously concluded by the entity MODs, but that all proceeds from the sales would go to the entities. The NATO HQ lawyers accepted the proposed amendments from the RS representatives verbatim, and the RS team pronounced the agreement acceptable. As the proposed changes did not affect our core goals, we also gave our support for the text. FIRST ATTEMPT TO BACKTRACK -------------- ¶4. (C) In a follow-up conversation on February 1, Dodik told the Ambassador that he accepted the January 31 agreement in principle, and was "95 percent sure" it would suffice for his government. He promised to call the Ambassador later that evening to give his "final approval," which he implied was a foregone conclusion. In the subsequent phone call, Dodik asserted that he required a few more "technical changes," but otherwise the agreement was acceptable. Cetkovic later sent the proposed changes to NATO HQ. The changes, far from being technical, were substantive, and were at odds with Dodik's January 31 pledge. Cetkovic's proposed amendments created loopholes which allowed the entities to maintain stockpiles of arms and ammunition, and introduced an entity veto in the disposal of military property that violated our principle of state-level ownership of all arms and ammunition. We and NATO HQ rejected the proposals, stressing that the document had already been amended to incorporate reasonable RS interests and that proposals allowing the RS to keep arms and ammunition were unacceptable. DODIK GIVES UNEQUIVOCAL SUPPORT... -------------- ¶5. (C) The Ambassador called Dodik again on the evening of February 3 to stress that we expected him to adhere to his commitment and support the January 31 agreement, adding that the new Cetkovic proposals were unacceptable. The Ambassador stressed that we and NATO HQ had addressed his and the RS government's reasonable concerns, adding that the attempt to reopen negotiations appeared obstructionist. The Ambassador told Dodik that the issue was inherently about the maintenance of a "safe and secure environment" in Bosnia, and in no way was it acceptable for the entities to maintain any stockpiles of military hardware. Backing away from Cetkovic's proposal, Dodik repeated that he accepted the January 31 draft of the agreement and would submit it to the RS government for approval that week. Dodik added "I do not want any of the weapons." The following day we presented the January 31 text to Dodik's Chief of Staff. She later informed us that the agreement as submitted was acceptable, and would be put on the agenda for the RS government session scheduled for February 7. The NATO HQ Commander, US MG Wightman, also called Dodik on February 5 to stress the importance of quickly approving the agreement, and Dodik pledged that the agreement would be approved as written. ... THEN RENEGS -------------- ¶6. (C) On February 6, we received a copy of the agenda for the February 7 RS government session. The agenda listed "consideration" of the draft agreement with the addendum "with proposed amendments." We immediately called Dodik's Chief of Staff to query what "proposed amendments" were being considered. She first told us that nearly all items for the RS Government's consideration were open to amendment and the wording on the agenda was standard practice. We pointed out that the transfer agreement was the only item on the 58 point agenda that contained the phrase "with proposed amendments," and asked whether the government intended to amend the agreement despite numerous prior assurances to the contrary. The Chief of Staff informed us that Cetkovic did indeed plan to propose amendments. The Ambassador called Dodik and reminded him of his numerous previous commitments, and urged him to not take an unnecessarily provocative step. Dodik SARAJEVO 00000246 003 OF 003 only responded "I hear you" and "we'll talk" before ending the call. ¶7. (C) In a follow-up conversation with our Banja Luka Branch Officer directly before the government session on February 7, Dodik raised numerous concerns with the agreement. Dodik wanted the RS representative to have veto rights in the MOD's property disposition committee. He also said that he feared the agreement would be used as a precedent for the broader state property issue. (Note. The Bosnian leadership, across the ideological and ethnic spectrum, has also raised this concern of precedent, and we have underscored to them all that the Law on Defense governs defense property issues only. End Note.) Dodik then claimed to have never read the agreement. Finally he asserted that the Federation and State could not be trusted to adhere to its provisions. One of Dodik's senior advisors later told us the Prime Minister had told him that he (Dodik) would "do the right thing" even if he had "to make the United States angry." COMMENT: APPARENT DECEPTION WITH MALINTENT -------------- ¶8. (C) The RS government's action in failing to approve the agreement strikes us as an attempt by Dodik to back out of his commitments and use Prime Minister Spiric and other SNSD allies in the COM to either kill the deal or redraft it along lines more favorable to the RS (i.e. allowing the RS to maintain ownership of weapons, ammunition and explosives). This is unacceptable. Anything but the full transfer of all these materials to the state is at odds with ensuring that Bosnia is a "safe and secure environment." We are maintaining that the agreement on the table, which PM Spiric has told us he fully supports, is non-negotiable and we expect PM Dodik to fulfill his commitments to the Ambassador and NATO HQ and secure its approval by the RS government. Unless Dodik reverses course, it is unlikely that the agreement will be approved before NATO's Bucharest Summit, let alone the February PIC. ¶9. (C) Dodik's behavior during this entire process has been troubling-- he deliberately chose to bring himself into a direct confrontation with us over an issue critical to Bosnia's security, even after we and NATO addressed all of his legitimate interests. Dodik had an agreement on the table that provided the RS with 80 percent of the profits from any surplus items sold, and provided direct entity involvement in identifying buyers for surplus items. Nonetheless, he has signaled that the RS has designs to maintain control over stockpiles of arms and ammunition. We kept the agreement and negotiations out of the media, NATO HQ negotiated in a transparent manner and largely accepted RS amendments verbatim, and we encouraged the other parties, the Federation and MOD, to accept the RS amendments, since they were consistent with their core interests. We did this to ensure the issue did not become a political football, and to provide Dodik with the political cover he often claims to require. We woke up February 7 to a banner headline in the RS government supported daily Glas Srpske announcing "Surplus Military Weapons Belong to the RS," which signaled that the RS government would reject the agreement. Our experience with Dodik suggests that the headline also signals his intention to frame the issue of defense property as an assault on the RS. It appears that Dodik now seems intent on dragging out the process with us as he did with the High Representative following the imposition of the October 19 measures and with the EU during police reform negotiations. End Comment. ENGLISH