The legal structure of Bosnia and Herzegovina (“BiH”) is very complex, which directly impacts on legislation as well as policies regulating and supervising companies and their directors.
BiH consists of two separate and distinct administrative entities: Federation of Bosnia and Herzegovina (“FBiH”) and Republika Srpska (“RS”), plus the Brcko District (“BD”) as a separate administrative unit. The two entities and the Brcko District have their own governmental structures as well as legislation, regulations and policies, so company law may be subject to legislative provisions at entity level, i.e. at FBiH, RS or BD level. Directors of affected companies can use the available measures adopted by the competent government in order to relieve the negative impacts caused by the COVID-19 crisis, but as mentioned above, each government (i.e. FBIH or RS and BD) adopts its relief measures independently so the measures may differ between them.
During March, the government of FBiH issued recommendations for employers and employees, mostly referring to protecting the health of employees in the manner of, for example:
- reducing working hours
- reorganising the work process in shifts
- instructing employees to work from home and to take leave, both paid and unpaid
- issuing instructions on how to organise non-cancellable meetings
- ensuring the implementation of hygiene measures in the company’s facilities, and
- providing employees with protective equipment (e.g. masks and gloves).
All the above recommendations are applicable if the nature of the work process allows and they are in accordance with the company’s internal acts, employment rulebook, collective agreement and the law.
Furthermore, the government of FBiH adopted the Law on mitigation of negative economic effects, making available the following measures to companies under prescribed conditions:
- subsidising contributions for compulsory insurances
- suspension of the calculation and payment of default interest on public revenues
- abolition of the obligation to pay an advance on income tax
- abolition of the obligation to pay an advance on income tax from independent activity
- interruption of the calculation of default interest on late payments in debtor-creditor relations
- interruption of forced collection
- maintaining the stability of certain payments
- postponement of the application of certain regulations during the state of emergency, and
- establishment of the Guarantee Fund.
Additionally, the government of FBiH adopted a Decision on deadlines and acting in court proceedings during the state of emergency in the territory of FBiH.
The government of RS adopted several decisions to mitigate the negative effects of the COVID-19 crisis including, inter alia, the following:
- decision on the Solidarity Fund for reconstruction
- decision on tax measures to mitigate the economic effects of COVID-19
- decision on deadlines and acting in administrative proceedings and other proceedings regulated by special material regulations
- decision on deadlines and acting in court proceedings during the state of emergency
- decision on method of settlement of income tax and contributions, and
- decision on temporary suspension of payment of tax obligations.
On 31 March the government of BD adopted measures to assist BD’s economy and prescribed the criteria for companies and entrepreneurs that have the right to access such measures. These measures concern reimbursement of minimum gross salaries paid to companies and entrepreneurs whose work is prohibited, or legal entities whose work performance is prevented, due to the nature of their work or their affiliation with the companies whose work is prohibited. In addition, companies and entrepreneurs, except for those who are exempted by the subject decision, also have the right to access government measures related to subsidies for paid tax and contributions on salary.
Both the Banking Agency of RS and the Banking Agency of FBiH have adopted several banking and finance measures to mitigate the effects of the COVID-19 crisis including, inter alia, a moratorium on loan repayment, which has been introduced with specific criteria.
Additionally, all governments in BiH have prescribed direct price control measures for certain goods and services during the COVID-19 crisis.
To mitigate the effects of the COVID-19 crisis, the Foreign Trade Chamber of Bosnia and Herzegovina is issuing Vis Maior (i.e. force majeure) confirmations which enable affected companies to demonstrate to their business partners that they are unable to fulfil their contractual obligations for objective and/or unforeseeable reasons.
Due to the limitations of lockdown prohibiting movement at specific times, directors are requested to issue their employees with confirmation that they are engaged in work between certain hours. This relates, for example, to employees in companies that have organised work into shifts. Additionally, directors are required to issue a confirmation/certificate of engagement for drivers engaged in the international transport of goods.