Stabilisation and restructuring law in Bosnia & Herzegovina

1. Which financial (not tax or labour) short-term compensation schemes for immediate losses due to social distancing measures have been implemented? For which industries/sizes of business?

The only financial measures currently implemented in Bosnia and Herzegovina are by the Banking Agency of the Federation of Bosnia and Herzegovina and the Banking Agency of Republika Srpska which will be explained below in more detail.

2. Which medium-to long-term stabilisation measures are in place in your jurisdiction?

Currently we are not aware of any implemented medium to long term stabilization measures in place in Bosnia and Herzegovina.

However, the Government of FBIH has adopted a Program on measures to stabilize the economy and mitigate the negative effects of the coronavirus pandemic and announced incorporation of various bodies and funds such as special funds for stabilizing the economy with the aim of supporting exporting companies, etc.

3. Which measures (Guarantees, Loans, Equity Injections, etc.) are available?

Similar mitigation measures have been adopted by Banking Agencies in FBiH and RS, however, please note that relevant decisions proscribing mitigation measures in FBiH are not published in the Official Gazette and therefore are not yet in force. Measures in FBIH relate to banks, microcredit organisations and leasing companies, whereas in RS these measures currently only relate to banks.

These measures, inter alia, include:

  • moratoriums
  • grace periods
  • extension of final payment deadlines for annuity loans
  • extension of payment deadlines for one-off repayments
  • extending additional amounts
  • other measures.

4. Have these mid- to long-term stabilisation measures already been notified with EU or other antitrust bodies?

N/A.

5. Which prerequisites are necessary to qualify for a programme?

Right to special financial measures mentioned above can only be exercised by clients who are directly or indirectly affected by extraordinary circumstances caused by COVID-19.  In addition, these measures, cannot be used, inter alia, by clients in default – i.e., already in delay over 90 days.

More decisions and other legislation regulating this matter in detail are expected to be adopted.

6. Are there any major reasons that may inhibit an applicant from successfully applying for a stabilisation measure?

Please see our answer above.

Please also note that the situation in Bosnia and Herzegovina is changing rapidly, therefore, all of the provided information is subject to change.

7. In an international context, are subsidiaries and branches of foreign parent/holding companies eligible to apply? For EU-States: Also for non-EU-third countries?

N/A

However, financial measures mentioned above only relate to entities with a validly issued license from the respective Banking Agency.

8. Do your country’s stabilisation schemes foresee restrictions on use of cash/other restrictions?

N/A

Currently, there are no restrictions on use of cash or similar restrictions in that regard of which we are aware.

9. How are insolvency application deadlines handled in times of Corona?

All non-urgent court hearings have been postponed and the courts work at a reduced capacity and continue to work only on urgent matters. Please note that on-duty judges can also individually decide to proceed with insolvency proceedings if they consider the case/circumstances urgent.

As of the day of this response, preclusive deadlines are not yet suspended, and courts in general are operational, therefore it is advisable for parties to meet all deadlines if possible.

10. How far have local insolvency/restructuring laws been changed/eased which might have an impact on international businesses?

N/A

No changes or easement measures have been implemented in relation to insolvency/restructuring laws as of the day of this response.

No cross-border insolvencies and restructuring rules related to COVID-19 exist as such.

However, for legal entities incorporated in Bosnia and Herzegovina which export goods abroad, there is a possibility to request a confirmation from the competent Chamber of Commerce that there is a state of force majeure if they are unable to meet the agreed deadlines for the delivery of products and services.

Also, all legal entities that have any issues in foreign trade are encouraged to inform the Foreign Trade Chamber of Bosnia and Herzegovina, so that this institution can inform the Ministry of Foreign Trade and Economic Relations of BiH regarding all delays and issues related to imports and exports.

N/A

No Corona-related measures regarding restructuring/insolvency are currently implemented.