The Central Bank of Bosnia and Herzegovina as a fiscal agent

---

1. The Law on the Central Bank of Bosnia and Herzegovina (Article 4) defines that the Central Bank of Bosnia and Herzegovina provides banking services, i.e. carries out transactions at the order of the Ministry of Finance and Treasury of BH related to BH foreign debt servicing and acts as fiscal agent for BH membership in international financial institutions. According to the Agreement on performing the operations of banking and fiscal agent between the Central Bank of Bosnia and Herzegovina and the Ministry of Finance and Treasury of BH, the Central Bank of Bosnia and Herzegovina carries out the operations of banker, depository, representative in payments and fiscal agent.

On the basis of the Law on Debt, Debt Issue and Guarantees of BH, the Central Bank of Bosnia and Herzegovina provides banking services and performs transactions at the order of the Ministry of Finance and Treasury of BH related to BH foreign debt servicing. The Ministry is in charge of implementing the procedures for debt issue and state debt management, it provides the coverage for liabilities in the local currency and keeps the BH foreign debt data base. Besides the Law on the Central Bank of Bosnia and Herzegovina and Law on Debt, Debt Issue and Guarantees of BH, the Law on Financing of BH Institutions, the Law on the Indirect Taxation System in BH and Law on Payments in the Single Account and Revenue Distribution also regulate the role of the Central Bank of Bosnia and Herzegovina and Ministry of Finance and Treasury of BH related to the operations of BH foreign debt servicing.

Operations, tasks, competences and mutual relations between the Ministry of Finance and Treasury of BH and the Central Bank of Bosnia and Herzegovina are defined by bilateral Agreement on BH Foreign Debt Servicing, concluded by the two institutions for the first time in 2001 (the latest version concluded in 2013). The Central Bank of Bosnia and Herzegovina, according to the provisions of the mentioned Agreement, is in charge of:

• timely providing of the needed amounts in foreign currencies for the payment of due liabilities;

• timely and correct performance of payments on the basis of orders/instructions of the Ministry;

• correspondence with foreign banks and creditors related to payment of liabilities and

• reporting to the Ministry on all the performed transactions.

The funds required for servicing of the external debt in local currency are provided by the Ministry of Finance and Treasury of BH from the Indirect Taxation Authority and / or direct payments of end users of loans. The annual plan of funds needed for servicing the external debt is part of the document "Budget of BH institutions and international liabilities", which is adopted by the Parliamentary Assembly of BH. In accordance with the concluded Agreement on Banking and Fiscal Agent between the Central Bank of Bosnia and Herzegovina and the Indirect Taxation Authority, and based on the Law on Payments to the Single Account and Distribution of Revenues, a single account of the Indirect Taxation Authority is kept for collecting revenues from indirect taxes. Under this arrangement, commercial banks transfer on a daily basis to the account for recording, holding and distribution of revenues of the Indirect Taxation Authority with the Central Bank of Bosnia and Herzegovina all collected revenues, and then these revenues are allocated daily to several different purposes accounts by order of the Indirect Taxation Authority and in accordance with the legislation. Pursuant to the Law on Excise Duties, funds paid on the basis of tolls are collected on the account of the Indirect Taxation Authority with the Central Bank of Bosnia and Herzegovina, and these funds are distributed by order of the Indirect Taxation Authority to the Entities and the Brčko District.

The Central Bank of Bosnia and Herzegovina is a fiscal agent and has been conducting transactions related to BH's membership and arrangements in the International Monetary Fund since 2002, based on the Decision of the BH Council of Ministers officially published in the Official Gazettes of BH. Mutual relations, competencies and actions of five institutions in BH (Central Bank of Bosnia and Herzegovina, Ministry of Finance and Treasury, Federal Ministry of Finance, Ministry of Finance of Republika Srpska and Indirect Taxation Authority) regarding financial arrangements with the International Monetary Fund are defined by Memorandum of Understanding (the first was concluded in 2002, the ones from 2016 and 2020 are in force). The Central Bank of Bosnia and Herzegovina is the depositary for the accounts (cash and securities) held by the International Monetary Fund with the fiscal agent (usually the central banks) of all members in accordance with the Articles of Agreement of the International Monetary Fund. In order to execute transactions of credited funds from the International Monetary Fund and paying liabilities to the International Monetary Fund, the Central Bank of Bosnia and Herzegovina maintains a dedicated Deposit Account for transactions with the International Monetary Fund, with sub-accounts of the Federation of BH, Republika Srpska and Brčko District. The Central Bank of Bosnia and Herzegovina executes transactions with the International Monetary Fund after the competent institutions in BH provide full coverage in local currency on the mentioned account / sub-accounts. The quota of BH, which represents the paid-in and subscribed "capital" of each member state in the general / general source of funds of the International Monetary Fund, is SDR 265.2 million.

In accordance with the World Bank Statute, the Central Bank of Bosnia and Herzegovina is the depositary for the members of the World Bank Group: IBRD, IDA and MIGA. By order of the a.m. members, the Central Bank of Bosnia and Herzegovina executes transactions of purchase and sale of foreign currency for domestic and executes payments / transfers to end users in domestic payment operations.

The Central Bank of Bosnia and Herzegovina, in accordance with the Agreement concluded with the Deposit Insurance Agency of BH, performs the records of the securities portfolio of this institution managed by an external portfolio manager according to the agreement of the Deposit Insurance Agency of BH with the one. In addition, the Central Bank of Bosnia and Herzegovina, in accordance with the concluded agreements, acts as a banking and fiscal agent of the FBH Banking Agency, RS Banking Agency, Brčko District, Federal Ministry of Finance, and Entities’ Securities Registers.

More at: https://cbbh.ba/Content/Read/14.