The Council of Ministers of Bosnia and Herzegovina adopted "Principles and standards of investment protection in the agreements on the promotion and protection of investments which Bosnia and Herzegovina concludes"

In the past ten or more years, host states of investments have faced with investments claims initiated against them by foreign investors under the provisions of concluded international agreements on the promotion and protection of investments, in ad hoc or institutional international arbitration.

 

According to the latest fully available UNCTAD data, investors have filed 1257 publicly known ISDS claims against host states of investments under international investment agreements, by the end of 2022. Аccording to the International Center for the Settlement of Investor-State Disputes (ICSID), 57 ISDS claims were initiatedin 2023. As some arbitrations may be confidential, the real number of disputes brought in 2022 and prior years is sure to be higher. Until today, 133 states have been sued at least once or more on this basis.

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Compared to other countries of similar size or economic strength, Bosnia and Herzegovina has faced a relatively small number of arbitration proceedings brought against it by investors until today. In order to protect the state from unfounded claims, as well as to protect the right of the state to regulate in the public interest without being sued for it, the competent services of the Ministry began to actively participate in the multilateral processes of regime reform contracted through this type of agreements. As part of this process, the Council of Ministers of Bosnia and Herzegovina, considered and adopted a very detailed analysis prepared by this Ministry on 29 December 2016 and made a decision introducing a moratorium on the conclusion of new agreements of this type, until the end of the activities from the adopted analysis and until the end of the reform.

 

At the proposal of the Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina, the Council of Ministers of Bosnia and Herzegovina adopted the new "Principles and standards of investment protection in agreements on the promotion and protection of investments which Bosnia and Herzegovina concludes"at its 20th session held on 23 August 2023.

 

The principles and standards have been prepared in accordance with the most modern practice in the world, which reflects the results of the reform processes that have been taking place for nearly ten years in various multilateral and regional forums. They are also based on the obligations undertaken by Bosnia and Herzegovina in other international agreements and conventions, such as, but not exclusively: the Stabilization and Association Agreement between Bosnia and Herzegovina and the European Union, the Energy Charter Treaty, the Paris Agreement, Agenda 2030, conventions on the protection of labour and human rights, conventions and agreements on environmental protection, CEFTA 2006 Agreement, etc.

 

The principles and standards are based on the solutions agreed in the latest texts of the agreements concluded by the European Union, the modernized text of the Energy Charter Treaty, the Regionally Accepted Standards of the Western Balkans’s for Negotiating of International Investment Agreements (adopted within the framework of the Action Plan for the Common Regional Market 2021-2024), the provisions of the World Trade Organization on dispute resolution, the model ISDS clause prepared by experts through the GIZ project, etc.

 

The basis for conducting negotiations and concluding an agreement on the promotion and protection of investments between Bosnia and Herzegovina and another country, prescribed by the Law on the procedure for the conclusion and implementation of international agreements (“Official Gazette of BiH”, no. 29/00 and 32/13), will contain the Bosnia and Herzegovina’s draft text of the agreement or comments on the proposal of agreement of the other contracting party, which will be based on the stated Principles, and the provisions made in the manner established in the Principles.