The Constitutional Court of Bosnia and Herzegovina sitting in Plenary and composed of the following judges: Mr. Miodrag Simović, President, Ms. Valerija Galić, Ms. Constance Grewe and Ms. Seada Palavrić, Vice-Presidents and Mr. Tudor Pantiru, Mr. David Feldman, Mr. Mato Tadić, Mr. Krstan Simić and Mr. Mirsad Ćeman, in accordance with Article VI(3)(a) of the Constitution of Bosnia and Herzegovina, Article 59(2) line 5 and Article 77(1) and (3) of the Rules of the Constitutional Court of Bosnia and Herzegovina (Official Gazette of Bosnia and Herzegovina Nos. 60/05 and 64/08), having deliberated in Case No. U 5/09 on the request of Mr. Ilija Filipović, Chairman of the House of Peoples of the Parliamentary Assembly of Bosnia and Herzegovina, for an interim measure, at its session held on 3 July 2009 adopted the following DECISION ON INTERIM MEASURE The request of Mr. Ilija Filipović, Chairman of the House of Peoples of the Parliamentary Assembly of Bosnia and Herzegovina for an interim measure is hereby granted. The application of the Law on Protection of Domestic Production under the CEFTA (Official Gazette of Bosnia and Herzegovina, No. 49/09) is hereby suspended. This Decision shall enter into force immediately and shall take legal effect pending the final decision of the Constitutional Court of Bosnia and Herzegovina on the request or until otherwise decided by the Constitutional Court of Bosnia and Herzegovina. This Decision shall be published in the Official Gazette of Bosnia and Herzegovina, the Official Gazette of the Federation of Bosnia and Herzegovina, the Official Gazette of the Republika Srpska and the Official Gazette of the Brčko District of Bosnia and Herzegovina.
2 REASONING 1. On 30 June 2009, Mr. Ilija Filipovic, Chairman of the House of Peoples of the Parliamentary Assembly of Bosnia and Herzegovina ( the applicant ) filed a request for review of the constitutionality of the Law on Protection of Domestic Production under the CEFTA (Official Gazette of Bosnia and Herzegovina, No. 49/09), ( the challenged Law ). The applicant also requested that the Constitutional Court order an interim measure whereby it would suspend the application of the challenged Law pending a decision on the request. 2. The applicant states that in the course of procedure for the enactment of challenged law he offered a number of arguments related to the unconstitutionality and harmful effect of certain provisions of the contested Law on the long term interest of the State of Bosnia and Herzegovina and on the consistent application of the CEFTA (the Central European Free Trade Agreement), but his arguments were not considered. In addition, the applicant states that it was the first time that the enactment of the challenged Law was opposed by the state s executive authority and the relevant international organisations and institutions. According to the applicant, given the possible consequences at national and international levels in case of the application of the challenged Law, it is possible to assume that there will be further disagreements in the future between the Parliamentary Assembly and the Council of Ministers, since the Council of Ministers will not and cannot take over the responsibility for implementation of the Law which it did not propose and the adoption of which it opposed, and which may have serious political consequences. 3. The applicant furthermore states that the challenged bill was proposed to the House of Representatives by its member who is a co-owner of the Lijanovići Production and Trading Company from Široki Brijeg; therefore, a conflict of interest exists in respect of the proponent. In the applicant s view, the application of the challenged Law would gives rise to an additional collision between the legislative and executive authorities, which, not only are not the proponent of the challenged Law but, together with the relevant Ministry, gave a negative opinion on the challenged Law and the consequences thereof. 4. Furthermore, the applicant alleges that the reasons and objectives for the protection of domestic production are not disputed nor is the right of every country to do so contested, but it is the manner in which it has been done and the selective approach which affects the two neighbouring CEFTA member countries, and the procedure which is contrary to the concluded international
3 agreements and possible long-term economic and political consequences, which the challenged Law might produce. Besides, the applicant alleges that Article III(3)(b) of the Constitution of Bosnia and Herzegovina provides that the general principles of international law shall be an integral part of the law of Bosnia and Herzegovina and the Entities and that the mutual cooperation as well as the fulfilment of international obligations accepted in good faith are the States responsibilities, such as the CEFTA, so that, in the applicant s opinion, the challenged Law is in violation of these two principles and, thereby, in violation of the Constitution of Bosnia and Herzegovina,... The applicant also states in his request that Article 5 of the challenged Law discriminates against the Republic of Croatia and Republic of Serbia and their goods, which practically leads to a customs war between the countries concerned. The applicant furthermore asserts that the Agreement on Amendment of and Accession to the CEFTA and Annex 1 thereto, as a ratified international agreement, enjoy supremacy over national laws. Therefore, the applicant holds that the challenged Law is in violation of the CEFTA in substantive terms, since it is contrary to Article 5 of the Annex to the CEFTA which provides that no new customs duties on imports shall be introduced, and in procedural terms, because of the failure to act in accordance with the provisions of Article 23bis and Article 24 of Annex 1 to the CEFTA 5. In addition to the request, the applicant submitted an extensive documentation including the correspondence in which the national authorities and international institutions expressed their opposition and reservation over the adoption of this Law. In its opinion of 10 June 2008 relating to the Draft Law, the Council of Ministers alleges that the concluded and ratified Agreement on Amendment of and Accession to the CEFTA, as an international agreement, is of a higher rank than national laws, that this Agreement (Section C - Contingent Protection Rules) provides for the instruments for protection of domestic production in cases of excessive imports and that certain procedures are required in the event of imposition of any such measure. Furthermore, the applicant alleges that Article 5 of the challenged Law proposes a violation of the CEFTA and that the proposal for the challenged law is unjustified, unfounded and in violation of the provisions of the International Agreement. 6. Moreover, in the letter of the Head of European Commission Delegation to Bosnia and Herzegovina of 10 March 2009 addressed to the then Chairperson of the House of Peoples, it is emphasized that the challenged Law may be incompatible with the CEFTA as well as that it may not be in the spirit of the Stabilization and Association Agreement, which underlines the importance of regional cooperation and, in Article 14, it even refers explicitly to the CEFTA as an important
4 element. It is therefore proposed that Bosnia and Herzegovina should first have a consultation with the relevant CEFTA parties with a view to finding a mutually acceptable solution within the spirit and the letter of the CEFTA. 7. In addition, aide-mémoire from the Embassy of the Republic of Croatia in Bosnia and Herzegovina was submitted together with the request. Ambassador of the Republic of Croatia in Bosnia and Herzegovina presented it to the Ministry of Foreign Affairs of Bosnia and Herzegovina on 25 March 2009. On 1 April 2009, the aide-mémoire was submitted to the House of People. The aide-mémorie emphasizes that the statistics show no indicators which would indicate serious disturbance to the markets by the application of the CEFTA and that this Agreement stipulates that any importing country may take appropriate bilateral safeguard measures (Article 23 and 23bis) against the other party to the Agreement in case of serious damaging consequences for domestic producers or in case of significant imbalance in the economy sector pursuant to Article 24 of the Agreement. However, this procedure was not conducted in the instant case. It is further stated that by the adoption of the challenged Draft Law, the products from the Republic of Croatia would be placed in an unequal position in the market of Bosnia and Herzegovina which is not in the spirit of the CEFTA and which would have immeasurable consequences both in terms of economy and politics, on the bilateral relations between the two countries. 8. The applicant also submitted a note of the Ministry of Foreign Affairs and European Integrations of the Republic of Croatia of 5 May 2009, addressed to the Ministry of Foreign Affairs of Bosnia and Herzegovina, in which it is stated that the enactment of such a protectionist and discriminatory law is an entirely unjustified action which will have harmful consequences not only on the bilateral relations but also on the credibility of Bosnia and Herzegovina and it will bring into question its capability to fulfil its obligations undertaken in respect of the stabilization and association process. In its note of 19 June 2009, the Ministry of Foreign Affairs and European Integration of the Republic of Croatia presented almost identical positions and the Ministry of Economy of the Republic of Croatia did so in its letter of 28 April 2009, which was sent to the Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina. 9. The letter of the Ministry for Economic Development of Montenegro of 11 May 2009 was attached to the request stating that by the enactment of the challenged law, which introduces the customs rates for more than 900 products originating from Serbia and Croatia and leaves the possibility for the same to occur with the products from other signatory states without the
5 procedures of the CEFTA being conducted, would amount to a violation of the CEFTA and would result in far-reaching consequences. 10. The applicant requested that an interim measure be adopted in order to avoid the detrimental consequences for the country, and which could affect good relations with the neighbouring countries and the CEFTA regional organisation and, finally, consequences for the Stabilisation and Accession Agreement. 11. In examining the grounds for adoption of the interim measure, the Constitutional Court invokes the provisions of Article VI(3)(a) of the Constitution of Bosnia and Herzegovina and Article 77(1) and (3) of the Rules of the Constitutional Court. Article VI(3)(a) of the Constitution of Bosnia and Herzegovina reads: a) The Constitutional Court shall have exclusive jurisdiction to decide any dispute that arises under this Constitution between the Entities or between Bosnia and Herzegovina and an Entity or Entities, or between institutions of Bosnia and Herzegovina, including but not limited to: - Whether an Entity's decision to establish a special parallel relationship with a neighbouring state is consistent with this Constitution, including provisions concerning the sovereignty and territorial integrity of Bosnia and Herzegovina. - Whether any provision of an Entity's constitution or law is consistent with this Constitution. Disputes may be referred only by a member of the Presidency, by the Chair of the Council of Ministers, by the Chair or a Deputy Chair of either chamber of the Parliamentary Assembly, by one-fourth of the members of either chamber of the Parliamentary Assembly, or by one-fourth of either chamber of a legislature of an Entity. Article 77(1) and (3) of the Rules of the Constitutional Court of BiH reads: 1. The Chamber may, at the request of an applicant or appellant, adopt any interim measure it deems necessary in the interest of the parties or the proper conduct of the proceedings before the Constitutional Court.
6 3. The Constitutional Court sitting in plenary or the Grand Chamber may, on its own initiative or initiative of the party, adopt an interim measure such as is referred to in paragraph 1 of this Article. 12. The Constitutional Court recalls that Article 77 of the Rules of the Constitutional Court is applicable in a situation where the Constitutional Court assesses, on the basis of reasons and evidence submitted as an attachment to the request for an interim measure, that irreparable detrimental consequences could occur or that it is in the interest of the parties and appropriate for the proceedings. 13. In view of the aforesaid, the Constitutional Court primarily observes that the challenged law entered into force on 30 June 2009, which means that the application thereof is yet to commence and, accordingly, the adoption of the interim measure could prevent possible future consequences. 14. It is obvious that the circumstances of this case raise an issue as to whether the challenged law is in accordance with Article III(3)(b) of the Constitution of Bosnia and Herzegovina, which reads: the general principles of international law shall be an integral part of the law of Bosnia and Herzegovina and the Entities. In this respect, Bosnia and Herzegovina is also obliged to fulfil the international obligations undertaken in good faith. 15. The Constitutional Court notes that it follows from the name of the challenged law that its basic goal is to protect the domestic production and that in Article 1 of this Law it is stated that this law regulates the implementation of the Agreement on Amendment of and Accession to the CEFTA. Article 5 of the challenged law stipulates that the customs authorities shall collect full MFN rates of duties on imported agricultural products originating from the Republic of Croatia and Republic of Serbia. 16. On the other hand, the Chapter I of the Agreement on Amendment of and Accession to the CEFTA, titled General obligations applicable to trade in all goods, i.e. its Article 5 stipulates that no new customs duties on imports, charges having equivalent effect, and import duties of a fiscal nature shall be introduced, nor shall those already applied be increased, in trade between the Parties as from the day preceding the signature of this Agreement. 17. Bringing the provisions of the CEFTA and the provisions of the challenged law into the mutual context, the Constitutional Court concludes that the present case concerns the legitimate
7 interests of Bosnia and Herzegovina. Namely, it is an undisputed fact that Bosnia and Herzegovina, as a signatory party to the CEFTA, is obliged to comply with the provisions of the said agreement the main purpose of which is trade liberalization and promotion of mutual trade relations with other signatory countries to the Agreement. In this context, it is an absolute interest of Bosnia and Herzegovina to prove its international credibility and to show to other signatory countries to the Agreement that is it a reliable partner which is, among other things, a precondition for entry of BiH into the EU, and which is certainly the interest generally accepted in Bosnia and Herzegovina. On the other hand, the interest of BiH to protect its domestic production is indisputable and BiH is entitled to protect this interest under the provisions of the CEFTA (the provisions of Articles 22 to 25), which is also a legitimate interest. However, the Constitutional Court points to that the methods of realization and protection of this interest must not jeopardize compliance with the Constitution of Bosnia and Herzegovina, and in particular Article III(3)(b) thereof, i.e. compliance with the general principles of the international law. 18. In the instant case, in addition to the applicant s allegations about the possibility of irreparable detrimental consequences for Bosnia and Herzegovina by the application of the challenged Law, the applicant submitted some evidence, too. Namely, the clear positions are stated in the letter of the Head of European Commission Delegation to Bosnia and Herzegovina of 10 March 2009, the memorandum of the Embassy of the Republic of Croatia in Bosnia and Herzegovina, the note of the Ministry of Foreign Affairs and European Integrations of the Republic of Croatia of 5 May 2009, the letter of the Ministry for Economic Development of Montenegro of 11 May 2009 and, particularly, the Council of Ministers opinion of 10 June 2008 relating to the Draft Law, which indicate the possibility of detrimental consequences for Bosnia and Herzegovina if the challenged law were applied. 19. Moreover, in order for the Constitutional Court to adopt a decision on the merits of the request it is necessary to collect all relevant data that may be obtained in adversarial proceedings, which are to be conducted. All the more so given that there was no concurrence in the opinions of the domestic authorities, international institutions and some signatory parties to the Agreement in the course of procedure for the enactment of challenged law. 20. Finally, after assessing the arguments for and against the adoption of interim measure, without prejudging the decision on the merits of the request, the Constitutional Court considers that, even under the condition that the request for review of the constitutionality were rejected, the detrimental consequences arising from the adoption of interim measure, from the aspect of interest
8 of Bosnia and Herzegovina, are milder than those which would arise upon declaring the law unconstitutional. The reason for this is the fact that by interim measure the application of the challenged law is only temporarily suspended and if the request is dismissed after assessing the merits of the case the interim measure will become ineffective and domestic production will enjoy the protection as regulated by the mentioned law. Therefore, the Constitutional Court considers that global interests of Bosnia and Herzegovina, as a signatory party to the Agreement and a country aspiring to join the European Union, justify the adoption of the interim measure. 21. Taking into account the provisions of Article 77(1) and (3) of the Rules of the Constitutional Court, the Constitutional Court decides to grant the request for an interim measure. 22. In view of Article 77(6) of the Rules of the Constitutional Court, the decision on an interim measure shall have legal effect pending the final decision on the present request or until otherwise decided by the Constitutional Court of BiH. 23. In view of the aforesaid, the decision is taken as set out in the enacting clause of the present decision. 24. The Constitutional Court recalls that the decision on an interim measure shall in no way prejudge a decision on admissibility/merits of the request concerned. 25. According to Article VI(4) of the Constitution of Bosnia and Herzegovina, the decisions of the Constitutional Court shall be final and binding. Prof. Dr Miodrag Simović President Constitutional Court of Bosnia and Herzegovina