Bosnia Peace Operation

In 1998 the U.S. government, the Peace Implementation Council, and the North Atlantic Council adopted benchmarks to help determine when enough progress has been made to allow NATO-led forces to be withdrawn from Bosnia. Three of the benchmarks--elimination of illegal institutions, creation of a democratic law enforcement system, and reform of the judicial system--are directly linked to reducing organized crime and corruption in Bosnia. However, despite U.S. and international efforts to achieve the three benchmarks, U.S. and international officials and published reports agree that organized crime and corruption continue to pervade Bosnia's civil service, law enforcement and judicial systems, economy, and political parties. Corruption pervades public administration. The judicial system is inadequate and, according to the Office of the High Representative's Judicial Reform Strategy, is incapable of effectively administering justice. Widespread customs and tax evasion has resulted, it is believed, in revenue losses of hundreds of millions of dollars. In addition, although internal controls over international aid appear to be adequate, according to U.S. and international officials, some corruption and fraud have occurred in the international assistance effort. Officials also said that anticorruption and judicial reform efforts have had little success because the political will of Bosnia's leaders is weak or nonexistent. Congress should consider requiring the State Department to certify that Bosnia has undertaken concrete, measurable efforts to fight corruption, smuggling, and tax evasion before providing future assistance. GAO summarized this report in testimony before the Congress; see: Bosnia: Crime and Corruption Threaten Successful Implementation of the Dayton Peace Agreement, by Harold J. Johnson, Associate Director for International Relations and Trade Issues, National Security and International Affairs Division. GAO/T-NSIAD-00-219, July 19 (10 pages).

GAO noted that: (1) endemic crime and corruption is impeding the successful implementation of the economic, political, and judicial reform goals of the Dayton Peace Agreement; (2) according to senior U.S. and international officials and numerous studies, corruption is impeding progress towards implementing the Dayton Agreement, and conditions for the complete withdrawal of NATO-led forces will not be met unless Bosnian officials make concerted efforts to address this problem; (3) this, however, has not happened: crime and corruption continue to pervade Bosnia's political, judicial, and economic systems; (4) U.S and international officials further stated that this situation exists largely because Bosnian leaders from all ethnic groups have not demonstrated the political will to reform; (5) however, the Department of State said some more moderate government officials have cooperated with the international community and others have cooperated under pressure; (6) numerous assessments have also concluded that the institutional structure for law enforcement and public accountability continues to be inadequate, precluding successful prosecution of government fraud, corruption, and complex white-collar crime; (7) Bosnian, international, and U.S anticorruption and judicial reform efforts have achieved only limited success in reducing crime, corruption, and political influence over law enforcement and judicial systems; (8) efforts, led by the Agency for International Development, seek to curtail corruption through the elimination of communist-era financial control structures and the privatization of state-owned enterprises; (9) U.S and international donors have established procedures for safeguarding assistance to Bosnia, and there is no evidence that assistance is being lost to large-scale fraud or corruption; (10) however, due to the fungibility of money, such assistance may be used to replace Bosnian domestic revenues lost to crime and corruption; and (11) if the Bosnian governments strengthened the rule of law, and identified ways to collect some or all of the hundreds of millions of dollars lost annually as a result of widespread tax and customs duty evasion, as estimated by the international community, budget support might not be needed.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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