[Federal Register Volume 64, Number 75 (Tuesday, April 20, 1999)]
[Notices]
[Pages 19398-19399]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9894]


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DEPARTMENT OF STATE

[Public Notice 3030]


Bureau of European Affairs; U.S. Bilateral Assistance to Bosnia 
and Serbia

    The Acting Secretary of State issued on April 12, 1999, a waiver 
under Section 570 of the Foreign Operations, Export Financing and 
Related Programs Appropriations Act, 1999, authorizing a U.S. vote in 
favor of a World Bank credit to Bosnia, including the Republika Srpska 
(RS). Presented hereunder are the Determination and accompanying 
Memorandum of Justification.

FOR FURTHER INFORMATION CONTACT: Office of the SEED Coordinator, Larry 
C. Napper, Department of State, 2101 C St NW, Washington, DC 20521 
(202-647-0853).

Determination on U.S. Position on Proposed World Bank Program for 
Bosnia and Herzegovina

    Pursuant to the authority vested in me by section 570 of the 
Foreign Operations, Export Financing, and Related Programs 
Appropriations Act, 1999, as enacted in P.L. 105-277 (``FOAA''), I 
hereby waive the application of Section 570 of the FOAA with regard to 
the U.S. position on the proposed program of the World Bank to 
establish a Local Development Fund (LDF) in Bosnia and Herzegovina.
    The U.S. representative may vote in favor of the proposed LDF 
program.
    I hereby determine that this program would directly support the 
implementation of the Dayton Agreement and its Annexes.
    This Determination shall be published in the Federal Register.

    Dated: April 12, 1999.
Strobe Talbot,
Acting Secretary of State.

Memorandum of Justification Under Section 570 of the Foreign 
Operations, Export Financing, and Related Programs Appropriations 
Act, 1999, to Approve Local Development Fund Program in the 
Republika Srpska

    Beginning with the formation in January 1998 of the Milorad Dodik 
government, the international community has continued efforts to 
strengthen moderate forces in the Republika Srpska (RS). The effort to

[[Page 19399]]

steer RS politics into a moderate course is now at a critical phase. 
Hardliners are using recent events--the Brcko arbitral award, the 
dismissal of hardline nationalist RS President Poplasen, and the NATO 
action against the Federal Republic of Yugoslavia--to try to derail the 
Dodik government and whip up public feeling against the international 
community.
    The United States has made clear repeatedly at RS and municipality 
levels that all assistance is contingent on continued progress in 
implementing the Dayton accords and announced its readiness to 
terminate any projects if the situation warrants. The U.S. has also 
encouraged other donors to deliver the same message. Progress toward 
full implementation of the Dayton accords includes progress on 
arresting indicted war criminals, formation of a broad-based moderate 
government in the RS, and other key Dayton goals.
    Section 570 of the Foreign Operations, Export Financing, and 
Related Programs Appropriations Act, 1999, imposes restrictions on 
assistance to states or entities that fail to ``take necessary and 
significant steps to apprehend and transfer'' to the International 
Criminal Tribunal for the Former Yugoslavia all persons who have been 
publicly indicted by the Tribunal. The Secretary of State determined in 
November 1998 that Serbia and the Republika Srpska were subject to this 
restriction. However, Section 570 also provides for a selective use of 
the waiver authority.
    An upcoming decision by the World Bank to establish a Local 
Development Fund (LDF), to lend to municipalities for infrastructure 
reconstruction, fits the criteria for a waiver. The LDF, which would 
commit a total of $15 million, is a longer-term (four years) effort to 
upgrade lending expertise of local banks and debt management 
capabilities of municipal governments.
    The U.S. has made clear to the World Bank that it expects strict 
controls to ensure that no persons publicly indicted of war crimes 
should benefit from the program, and that no municipalities openly 
harboring such persons should benefit. The World Bank will institute 
strong control and audit mechanisms. International banks and 
consultants responsible to the World Bank will be involved in the 
selection of participating banks and eligible municipalities. The World 
Bank is fully aware of the need to avoid a situation where its funds 
could benefit persons publicly indicted for war crimes, or 
municipalities responsible for harboring such persons. It will consult 
regularly with the Office of the High Representative in Sarajevo on the 
administration of this program.
    Our record on war criminals remains strong and unequivocal. U.S. 
encouragement of moderate elements in the RS has helped improve the 
climate for bringing indicted war criminals to justice. To date, there 
have been ten forcible detentions and six voluntary surrenders in the 
RS. Of these, there were seven forcible detentions by SFOR and five 
voluntary surrenders during 1998. Since April of 1997, the number of 
war criminals brought before the Tribunal has increased from 7 to 35, 
due in large measure to the persistent pressure applied by the U.S. 
Government.
    The fact that the detentions occurred without major incident, and 
that there is a relatively high proportion of voluntary surrenders, 
reflects directly on the climate created by the cooperative 
relationship with the international community of the Dodik government. 
We believe that by strengthening moderate and democratic forces in the 
Republika Srpska, we have strengthened institutions, capabilities, and 
resolve that will lead to the fulfillment of the Dayton objective of 
seeing those war criminals who remain at large detained and brought to 
justice.
    The international community has repeatedly warned that 
obstructionism will lead to serious repercussions, including the 
curtailment of economic assistance. However, positive signals are also 
needed. The currently volatile climate in the RS should not sway the 
international community from a long-term policy that strengthens 
moderates and rewards those who cooperate with Dayton implementation.

[FR Doc. 99-9894 Filed 4-19-99; 8:45 am]
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