Stabilization and Association Process represents main framework of EU policy for BiH, as well as for other five countries of the region. For the first time SAP offers possibility of becoming a member of EU to five countries in the region, based on gradual access adjusted to circumstances of an individual country. This possibility is a historical turning point in relations of these five countries and EU. SAP is a strategy of EU towards countries of the South Eastern Europe, which main characteristics are: equal conditions for all, clear perspective of membership in EU, individual approach and significant importance of regional cooperation.

SAP offers strong impetus to the countries, and at the same time, it sets demanding political and economic conditions, highlighting the need to cooperate at regional level. In order to develop closer relation with the Union, countries should reconcile their political, economic and institutional development with values and models on which EU is based, such as: democracy, respect of human rights and market economy. There are several instruments that serve to strengthen political, economic and institutional relations of EU with SAP countries, with a final goal to get them prepared for membership in EU. Those instruments are as follows:

• Stabilization and Association Agreement
  
  
• European Partnership
  
  
• Financial and technical help and other EU programs 
  
  
• Political dialogue, followed by cooperation in the sphere of justice and internal affairs, cooperation within the Common Foreign and Security Policy of EU

Stabilisation and Association Agreement Between Bosnia and Herzegovina, of the One Part, and The European Communities and their Member States, of the Other Part  

Agreements available at DEI BiH web page  

Bosnia and Herzegovina signed the Stabilization and Association Agreement on June 16th 2008 in Luxemburg.

Interim Agreement on Trade and Trade-related Matters was signed along with the Stabilization and Association Agreement, and is being implemented as of July 1st 2008, until the finalization of ratification procedure of the SAA in all signatory countries.

By signing the Stabilization and Association Agreement the formal contractual relation has been established between Bosnia and Herzegovina and the EU for the first time

Stabilization and Association Agreement represents the third generation of the European association agreements assigned to the Western Balkans countries included in the stabilization and association process.

Stabilization and Association Agreement sets forth comprehensive contractual framework between BIH and the EU, and as such, represents an important step forward on BIH path towards the EU membership.

Stabilization and Association Agreement is a preferential agreement that is supposed to contribute to economic and political stabilization of BIH and establishment of close and long-term relations between contracting parties. The Agreement is concluded for an indefinite period.

The Agreement sets forth the following:

Basic text is divided into the following Chapters:

• General Principles
• Political Dialogue  
• Regional Cooperation
• Free movement of goods
• Movement of  workers, establishment, supply of services, movement of capital
• Approximation of laws, law enforcement and competition rules
• Justice, freedom and security
• Cooperation policies  
• Financial cooperation  
• Institutional, general and final provisions

Following Annexes and Protocols make an integral part of the Agreement:

Annexes

• Annex I. (Article 21) - Tariff concessions of Bosnia and Herzegovina for Community industrial products
• Annex II. (Article 27, Paragraph (2)) - Definition of "baby beef" products
• Annex III. (Article 27) - Tariff concessions of Bosnia and Herzegovina for agricultural primary products originating in the Community
• Annex IV. (Article 28) - Duties applicable to goods originating in Bosnia and Herzegovina on import into the Community
• Annex V. (Article 28) - Duties applicable to goods originating in the Community on import into Bosnia and Herzegovina
• Annex VI. (Article 50) - Establishment: Financial Services
• Annex VII. (Article 73) - Intellectual, industrial and commercial property rights

Protocols:

• Protocol 1 (Article 25) On trade between the Community and Bosnia and Herzegovina in processed agricultural products
• Protocol 2 (Article 42) Concerning the definition of the concept of "originating products" and methods of administrative cooperation for the application of the provisions of this Agreement between the Community and Bosnia and Herzegovina
• Protocol 3 (Article 59) On land transport
• Protocol 4 (Article 71) On State aid to the steel industry
• Protocol 5 (Article 97) On mutual administrative assistance in customs matters
• Protocol 6 (Article 126) - Dispute settlement
• Protocol 7 (Article 27) On reciprocal preferential concessions for certain wines, the reciprocal recognition, protection and control of wine, spirit drinks and aromatised wine names

Establishment of common bodies for supervision of the SAA implementation:

In order to provide timely and comprehensive implementation, the SAA`s provisions have foreseen establishment of appropriate bodies, such as:

• Stabilization and Association Council,
• Stabilization and Association Committee and, if required, other sub-committees to assist the Council,
• Parliamentary Stabilization and Association Committee

Aims of the Agreement:

To develop political dialogue between the Union and signatory country, to start gradual harmonization of national legislation of signatory country with Acquis Communaitaire, to promote economic relations between the two parties, to gradually develop free trade zone between the two parties and to stimulate regional cooperation within the stabilization and association process. Agreement enables signatory country to assume the status of potential candidate for the EU membership.

European partnership

Important decision of the ThessalonikiSummitwas to introduce the European Partnership for the Western Balkans countries. Partnership was announced for Bosnia and Herzegovina for the first time in June 2004. European Partnership has short-term and long-term priorities, which will serve as the list of obligations by which BiH progress will be measured, on its way to European integrations. European partnership is introduced as an instrument for materializing European perspective of the Western Balkans countries.

Actions undertaken by BIH institutions in previous years were focused to start and the flow of negotiations on Stabilization and Association Agreement and (SAP) and RPM mechanism, as well as to fulfilling of requests coming out from these processes and European Partnership document.

Political dialogue

Holding of regular multilateral political dialogue meetings between the EU and  SAP countries started after the Thessaloniki statement issued in June 2003 and the «Thessaloniki Agenda for the Western Balkans», under the title "Forum EU-Western Balkans" (between the Head of States and Governments, Foreign Affairs Ministers, Ministers of Justice and Internal Affairs and Ministers from other ministries, if required).

Multilateral political dialogue between foreign affairs ministers “EU-WB Forum” was held on February 12th in Brussels. Informal meeting of foreign affairs ministers EU – WB was held on March 29th 2008 at Brdo pri Kranju.

The sixth regular EU-WB Forum of ministers of justice and internal affairs was held on October 4th and 5th 2007 at Brdo pri Kranju. Political dialogue meeting between the EU and Bosnia and Herzegovina is being held at ministerial level (the so called Troika). The fourth meeting between the EU Troika representatives and foreign affairs minister of BIH was held on September 27th 2007 on the margins of the UN General Assembly.  The meeting between the EU Troika political directors and BIH was held for the first time in that form on February 28th 2008 in Ljubljana, organized by the Slovenian Chairmanship of the EU.

Inter-parliamentary dialogue between the EU and Bosnia and Herzegovina was continued on the 10th meeting held on February 4th and 5th 2008 in Sarajevo, with participation of the delegation of the Parliamentary Assembly of Bosnia and Herzegovina and the European Parliament.
Economic dialogue between the EU and BIH started in April 2006, which initiated the only activity left to be carried out in line with obligations of the Thessaloniki Agenda. Fourth economic dialogue meeting between the EU and BIH was held in May 2008 in Brussels.

Political and technical dialogue is being carried out through the Board for reform process monitoring.

Financial support

Instrument for Pre-accession Assistance – IPA is the new financial instrument for supporting all pre-accession activities (including SAP countries), managed by the European Commission (on July 17, 2006, Council of EU approved regulation which established IPA for the period 2007-2013).

• IPA instrument is a part of the Package of Foreign Relations of the EU, created with a goal to reconcile and facilitate procedures and to improve coherence and coordination of EU actions.
  
  
• Main goal in designing IPA is to set the whole pre-accession help in a unique framework and to unify regulation for both candidate countries as well as for countries being potential candidates.
  
  
• IPA will replace existing instruments of help, such as:  Phare, ISPA, SAPARD, CARDS, as well as Turkish pre-accession fund.
  
  
• IPA instrument foresee two user groups to be provided special help: support to potential candidates to get prepared to take candidate status keeping on with similar help component, such as CARDS, as well as support to candidate countries in preparations for membership in EU. IPA instrument is made of five components, first two being opened for potential candidates and all five for candidate countries.

Components are:

• Help in transition and building of institutional capacities. This component includes all actions and investments connected to acquis communautaire, building of administrative and judicial capacities, as well as support to measures of cooperation that are not included by other components, and are in the pre-accession context.
  
  
• Regional and over-the-border cooperation supports over-the-border initiatives between beneficiary countries, as well as between beneficiary countries and the member countries, as well as their participation in ERDF programs, transnational and inter-regional cooperation programs.    
  
  
• Regional development (economy) should fully support candidate countries to build up a system of absorption of the Cohesive Funds and European Funds for regional development.
  
  
• Building of human resources and capacities helps candidate countries to prepare for using, programming and implementation of the principle of the European Social Fund within the European Strategy for Employment.
  
  
• Building of rural (agricultural) component help the candidate country to build up its capacities and the system, in order to fully take the management and qualitative usage of the post-accession EU funds for rural development. This will be done by implementing procedures for pre-accession help similar to those after accession.

Financial allocation for the period 2007-2013: EUR 11,468 Mio is planned for IPA.

In BiH case, start of implementation of IPA will be carried out in line with newly established role of BiH in decentralized management with EU help funds.

IPA foresees the following funds for BiH, within the component 1:
2007 – EUR 62.1 Mio
2008 – EUR 74.8 Mio
2009 – EUR 89.1 Mio