[House Document 106-18]
[From the U.S. Government Publishing Office]






106th Congress, 1st Session - - - - - - - - - - - House Document 106-18
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              A REPORT ON PEACE IN BOSNIA AND HERZEGOVINA              

                               __________

                             COMMUNICATION

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

A REPORT TO CONGRESS OF ONGOING EFFORTS TO ACHIEVE SUSTAINABLE PEACE IN 
                      BOSNIA AND HERZEGOVINA (BiH)




February 8, 1999.--Referred to the Committee on International Relations 
                       and ordered to be printed

                               --------

                    U.S. GOVERNMENT PRINTING OFFICE                    
69-011                     WASHINGTON : 1999



To the Congress of the United States:
    Pursuant to section 7 of Public Law 105-174, I am providing 
this report to inform the Congress of ongoing efforts to 
achieve sustainable peace in Bosnia and Herzegovina (BiH). This 
is the first semiannual report that evaluates progress in BiH 
against the ten benchmarks (``aims'') outlined in my 
certification to the Congress of March 3, 1998. NATO adopted 
these benchmarks on May 28, 1998, as part of its approval of 
the Stabilization Force (SFOR) military operations plan (OPLAN 
10407). The Steering Board of the Peace Implementation Council 
(PIC) subsequently adopted corresponding benchmarks in its 
Luxembourg Declaration of June 9, 1998.
    NATO, the Office of the High Representative (OHR) and my 
Administration have coordinated closely in evaluating progress 
on Dayton implementation based on these benchmarks. There is 
general agreement that there has been considerable progress in 
the past year. The basic institutions of the state, both 
political and economic, have been established. Key laws 
regarding foreign investment, privatization, and property are 
now in place. Freedom of movement across the country has 
substantially improved. Fundamental reform of the media is 
underway. Elections have demonstrated a continuing trend toward 
growing pluralism. Nevertheless, there is still much to be 
done, in particular on interethnic tolerance and 
reconciliation, the development of effective common 
institutions with powers clearly delineated from those of the 
Entities, and an open and pluralistic political life. The 
growth of organized crime also represents a serious threat.
    With specific reference to SFOR, the Secretaries of State 
and Defense, in meetings in December 1998 with their NATO 
counterparts, agreed that SFOR continues to play an essential 
role in the maintenance of peace and stability and the 
provision of a secure environment in BiH, thus contributing 
significantly to progress in rebuilding BiH as a single, 
democratic, and multiethnic state. At the same time, NATO 
agreed that we do not intend to maintain SFOR's presence at 
current levels indefinitely, and in fact agreed on initial 
reductions, which I will describe later in this report. Below 
is a benchmark-by-benchmark evaluation of the state-of-play in 
BiH based on analysis of input from multiple sources.
    1. Military Stability. Aim: Maintain Dayton cease-fire. 
Considerable progress has been made toward military 
stabilization in BiH. Entity Armed Forces (EAFs) are in 
compliance with Dayton, and there have been no incidents 
affecting the ceasefire. EAFs remain substantially divided 
along ethnic lines. Integration of the Federation Army does not 
reach down to corps-level units and below. However, progress 
has been made through the Train and Equip Program to integrate 
the Ministry of Defense and to provide the Federation with a 
credible deterrent capability. Although it is unlikely to meet 
its target of full integration by August 1999, the Federation 
Ministry of Defense has begun staff planning for integration. 
The Bosnian Serb Army (VRS) continues its relationship with the 
Federal Republic of Yugoslavia (FRY) Army. Similarly, the 
Bosnian Croat element of the Federation Army maintains ties 
with Croatia. In both cases, however, limited resources impinge 
on what either Croatia or the FRY can provide financially or 
materially; the overall trend in support is downward. In some 
areas, the VRS continues to have certain qualitative and 
quantitative advantages over the Federation Army, but the Train 
and Equip Program has helped narrow the gap in some key areas. 
The arms control regimes established under Articles II 
(confidence and security-building measures) and IV (arms 
reduction and limitations) of Annex 1-B of the Dayton Peace 
Accords are functioning. In October 1997, BiH and the other 
parties were recognized as being in compliancewith the 
limitations on five major types of armaments (battle tanks, armored 
combat vehicles, artillery, combat aircraft, and attack helicopters) 
set forth in the Article IV agreement, which were derived from the 
Annex 1B 5:2:2 ratios for the FRY, Republic of Croatia, and BiH 
respectively. The parties have since maintained armament levels 
consistent with the limitations and are expected to do so in the 
future. A draft mandate for an Article V agreement (regional stability) 
has been approved; negotiations are due to begin in early 1999. 
Military stability remains dependent on SFOR as a deterrent force.
    2. Public Security and Law Enforcement. Aim: A restructured 
and democratic police force in both entities. There has been 
considerable progress to date on police reform due to sustained 
joint efforts of the International Police Task Force (IPTF), 
Office of the High Representative (OHR), and SFOR, which have 
overcome a number of significant political obstacles. So far, 
approximately 85 percent of the police in the Federation have 
received IPTF-approved training, as have approximately 35 
percent of the police in the Republika Srbska (RS). All sides 
continue to lag in the hiring of minority officers and, as the 
IPTF implements its plans to address this problem, tensions 
will increase in the short-term. SFOR often must support the 
IPTF in the face of crime, public disorder, and rogue police. 
Monoethnic police forces have often failed to facilitate 
minority returns. In these types of scenarios, SFOR's use of 
the Multinational Specialized Unit (MSU) has been a force 
multiplier, requiring fewer, but specifically trained troops. 
At this point, SFOR's essential contribution to maintaining a 
secure environment, to include backing up IPTF in support of 
nascent civilian police forces, remains critical to continued 
progress.
    3. Judicial Reform. Aim: An effective judicial reform 
program. Several key steps forward were taken in 1998, such as 
the signing of an MOU on Inter-Entity Legal Assistance on May 
20, 1998, and establishment of an Inter-Entity Legal Commission 
on June 4, 1998. The Federation Parliament in July adopted a 
new criminal code. Nevertheless, the judicial system still 
requires significant reform. Judges are still influenced by 
politics, and the system is financially strapped and remains 
ethnically biased. Execution of judgments, in particular 
eviction of persons who illegally occupy dwellings, is 
especially problematic. The progress made in the area of 
commercial law is encouraging for economic development 
prospects.
    4. Illegal Institutions, Organized Crime, and Corruption. 
Aim: The dissolution of illegal pre-Dayton institutions. 
Corruption remains a major challenge to building democratic 
institutions of government. Structures for independent 
monitoring of government financial transactions are still not 
in place. Shadow institutions still need to be eliminated. The 
burden of creating institutions to combat fraud and organized 
crime falls mostly to the international community and in 
particular to the IPTF. SFOR contributes to the secure 
environment necessary for the success of other international 
efforts to counter these illegal activities.
    5. Media Reform. Aim: Regulated, democratic, and 
independent media. Approximately 80 percent television coverage 
has been achieved in BiH through the international community's 
support for the Open Broadcasting Network (OBN), which is the 
first (and so far only) neutral source of news in BiH. Several 
television and radio networks have been restructured and are 
led by new management boards. Most are in compliance with 
Dayton except for some regional broadcasts. The Independent 
Media Commission assumed responsibility for media monitoring 
from the OSCE on October 31, 1998. Progress has been 
significant, but BiH still has far to go to approach 
international standards.SFOR's past actions in this area are a 
key deterrent against illegal use of media asserts to undermine Dayton 
implementation.
    6. Elections and Democratic Governance. Aim: National 
democratic institutions and practices. With the exception of 
the election of a nationalist to the RS presidency, the 
September 1998 national elections continued the long-term trend 
away from reliance on ethnically based parties. The two major 
Serb nationalist parties lost further ground and, once again, 
will be unable to lead the RS government. Croat and Bosniak 
nationalist parties retained control, but saw margins eroded 
significantly. In this regard, SFOR's continued presence will 
facilitate conduct of the municipal elections scheduled for 
late 1999 but, as has been the case with every election since 
Dayton,the trend of increasingly turning over responsibility 
for elections to the Bosnians themselves will continue.
    7. Economic Development. Aim: Free-market reforms. While 
the process of economic recovery and transformation will take 
many years, some essential groundwork has been laid. 
Privatization legislation and enterprise laws have been passed, 
and banking legislation has been partially passed. Fiscal 
revenues from taxes and customs have increased significantly. 
Nevertheless, the fiscal and revenue system is in its infancy. 
Implementation of privatization legislation is slow and the 
banking sector is under-funded, but there are signs of 
development in GDP. There has been a marked increase in freedom 
of movement, further enhanced by the uniform license plate law. 
SFOR's continued contribution to a secure environment and 
facilitating freedom of movement is vital as economic reforms 
begin to take hold.
    8. Displaced Person and Refugee (DPRE) Returns. Aim: A 
functioning phased and orderly minority return process. While 
there have been some significant breakthroughs on DPRE returns 
to minority areas, such as Jajce, Stolac, Kotor Varos, 
Prijedor, Mostar, and Travnik, the overall numbers have been 
low. In some areas where minority DPREs have returned, 
interethnic tensions rose quickly. Some nationalist political 
parties continue to obstruct the return of minority DPREs to 
the areas they control. Poor living conditions in some areas 
present little incentive for DPREs to return. The Entities are 
using DPREs to resettle regions (opstinas) that are of 
strategic interest to each ethnic faction. SFOR's contribution 
to a secure environment remains vital to OHR efforts to 
facilitate minority returns.
    9. Brcko. Aim: A multiethnic administration, DPRE returns, 
and secure environment. Freedom of movement in Brcko has 
improved dramatically. Citizens of BiH are increasingly 
confident in using their right to travel freely throughout the 
municipality and the region. Police and judicial elements have 
been installed, but the goal of multiethnicity in these 
elements still has not been realized. About 1,000 Federation 
families have returned to the parts of Brcko on the RS side of 
the Inter-Entity Boundary Line, but few Serb displaced persons 
have left Brcko to return to their pre-war homes. SFOR support 
will be a critical deterrent to the outbreak of violence during 
the period surrounding the Arbitrator's decision on Brcko's 
status anticipated for early in 1999.
    10. Persons Indicated for War Crimes (PIFWCs). Aim: 
Cooperation with the International Criminal Tribunal for the 
former Yugoslavia (ICTY) leading to the transfer of PIFWCs to 
The Hague for trial. Thanks to action by the Congress, the 
Secretary of State now has the ability to offer rewards of up 
to $5 million for information leading to the arrest or 
conviction of PIFWCs. Of the 81 people indicated publicly by 
the Tribunal, only 29-36 percent--are still at large. The two 
highest-profile indictees, Karadzic and Mladic, areamong them. 
Bosniaks are cooperating with the ICTY, but the failure of the RS to 
support the ICTY is a major obstacle to progress. Bosnian Croats have 
cooperated with respect to the surrender of all but two public 
indictees, but have not cooperated fully with respect to the Tribunal's 
orders that they turn over documents needed for the fair trial of a 
number of indictees. SFOR continues to provide crucial support in the 
apprehension of PIFWCs and for ICTY exhumations.
    In my report to the Congress dated July 28, 1998, I 
emphasized the important role that realistic target dates, 
combined with concerted use of incentives, leverage, and 
pressure on all parties, should play in maintaining the sense 
of urgency necessary to move steadily toward an enduring peace.
    The December 1998 Peace Implementation Council Declaration 
and its annex (attached) offer target dates for accomplishment 
of specific tasks by authorities in BiH. The PIC decisions 
formed the background against which NATO Defense Ministers 
reviewed the future of SFOR in their December 17 meeting. 
Failure by Bosinian authorities to act within the prescribed 
timeframes would be the point of departure for more forceful 
action by the OHR and other elements of the international 
community. Priorities for 1999 will include: accelerating the 
transition to a sustainable market economy; increasing the 
momentum on the return of refugees and displaced persons, 
particularly to minority areas; providing a secure environment 
through the rule of law, including significant progress on 
judicial reformed and further establishment of multiethnic 
police; developing and reinforcing the central institutions, 
including adoption of a permanent election law, and the 
development of greater confidence and cooperation among the 
Entity defense establishments with the goal of their eventual 
unification; and pressing ahead with media reform and education 
issues.
    In accordance with the NATO Defense Minister's guidance in 
June 1998, NATO is conducting a series of comprehensive reviews 
at no more than 6-month intervals. The first of these reviews 
was completed on November 16, 1998, and recently endorsed by 
the North Atlantic Council (NAC) Foreign and Defense Ministers. 
In reviewing the size and shape of SFOR against the benchmarks 
described above, the United States and its Allies concluded 
that at present, there be no changes in SFOR's mission. NATO 
Recommended, however, that steps begin immediately to 
streamline SFOR. The NAC Foreign and Defense Ministers endorsed 
this recommendation on December 8, 1998, and December 17, 1998, 
respectively. The Defense Ministers also endorsed a report from 
the NATO Military Authorities (NMAs) authorizing further 
adjustments in SFOR force levels--in response to the evolving 
security situation and support requirements--to be completed by 
the end of March 1999. While the specifics of these adjustments 
are still being worked, they could amount to reductions of as 
much as 10 percent from the 6,900 U.S. troops currently in 
SFOR. The 6,900 troop level already represents a 20 percent 
reduction from the 8,500 U.S. troops deployed in June 1998 and 
is 66 percent less than peak U.S. deployment of 20,000 troops 
in 1996.
    The NATO Defense Ministers on December 17, 1998, further 
instructed NMAs to examine options for possible longer-term and 
more substantial adjustments to the future size and structure 
of SFOR. Their report is due in early 1999 and will give the 
United States and its Allies the necessary information on which 
to base decisions on SFOR's future. We will address this issue 
in the NAC again at that time. Decisions on future reductions 
will be taken in the light of progress on implementation of the 
Peace Agreement. Any and all reductions of U.S. forces in the 
short or long term will be made in accordance with my 
Administration's policy that such reductions will not 
jeopardize the safety of U.S. armed forces serving in BiH.
    My Administration values the Congress' substantial support 
for Dayton implementation. I look forward to continuing to work 
with the Congress in pursuit of U.S. foreign policy goals in 
Bosnia and Herzegovina.
                                                William J. Clinton.
    The White House, February 4, 1999.

                                
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