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PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHVJ #1279/01 1561638
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FM AMEMBASSY SARAJEVO
TO RUEHC/SECSTATE WASHDC PRIORITY 3674
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0001
RUEHBS/AMEMBASSY BRUSSELS PRIORITY 0035
RUEHDO/AMEMBASSY DOHA PRIORITY 0001
RUEKJCS/OSD WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUFOAOA/USNIC SARAJEVO PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 SARAJEVO 001279 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR/ACE (ADAMS, NELSON-DOUVELIS, VISOCAN, 
ROSENBLUM, O'KEEFE), EUR (DICARLO), EUR/SCE (FOOKS, 
MITCHELL, ENGLISH, SAINZ), D (SMITH), P (BAME), S/WCI 
(WITTEN, HODGKINSON, LOSS), NSC FOR BRAUN, USNIC FOR WEBER, 
GREGORIAN, OSD FOR FLORY 
 
E.O. 12958: DECL: 05/28/2011 
TAGS: KAWC EAID PHUM PREL BK
SUBJECT: BOSNIA: STATE COURT BALANCES 2007 BUDGET, BUT 
GOVERNMENT IN DENIAL OVER FUNDING SHORTFALL 
 
REF: BRUSSELS 1165 
 
Classified By: DCM Tina Kaidanow. Reason 1.4 (b) and (d) 
 
¶1. (C) Summary: On May 24 the BiH State Court Registry 
presented international donors with a realistic plan to 
balance the 2007 budget and keep the War Crimes Chamber 
going.  This presentation came as a result of collective 
donor pressure on the Registry to face the fiscal reality 
that pledges at, and subsequent to, the March 31 Donors' 
Conference amounted to 7.3 million euros for 2007, not the 
target 11.5 million.  The Registry's new plan involves 
cutting costs for 2006, accelerating the pace at which 
international management and support staff will be phased 
out, and collecting outstanding donor pledges from 2003. 
However, in a separate donor gathering, BiH officials missed 
an important opportunity to inform donors about recent 
initiatives underway to reform the justice sector overall, 
although such reform is a precondition for additional 
European assistance.  Further, key BiH authorities apparently 
still do not accept the fact that there is no international 
funding available for the 14.4 million euro State Prison 
Project. End Summary. 
 
WCC REGISTRY BALANCES 2007 BUDGET 
 
¶2. (U) At the March 31 Donors' Conference in Brussels, North 
American and European donors pledged approximately 5.3 
million euros for the State Court War Crimes Chamber (WCC) in 
2007 (REFTEL).  This figure fell far short of the Chamber's 
11.5 million euro target, and no money was pledged for 
construction of the 14.4 million euro State Prison.  Donor 
country representatives have repeatedly urged BiH authorities 
to deal realistically with the financial situation and to be 
proactive about essential justice sector reforms, noting that 
these reforms will in turn generate more sector-wide donor 
assistance.  Seeing that it could expect no further funds in 
the near-term, on May 24 the State Court Registry produced a 
balanced budget for 2007.  In place of the original 11.5 
million euro plan for 2007, its budget is now 9.9 million 
euros.  To achieve this figure, the Registry cut costs from 
the 2006 budget, creating carry-over money.  It also put 
forward a more aggressive, accelerated plan to phase-out 
international staff and judicial secondments, and to have 
national staff absorbed into the BiH budget.  The Registry's 
Chief Financial Officer said that this target can be reached, 
provided that certain donors (e.g., Italy) fulfill their 
pledges from 2003. 
 
BiH OFFICIALS CONTINUE APPEAL TO CURRENT DONORS 
 
¶3. (C) However, outside the Court itself, BiH officials have 
done little to accept financial reality since the Brussels 
Conference.  They have not tried to recruit additional donors 
for the WCC, and refuse to consider lower-cost alternatives 
to the State Prison.  Justice Minister Kovac has been 
particularly unhelpful, making weekly press statements that 
money for prison construction is coming "any day now."  No 
assistance has materialized from Qatar or U.A.E., states that 
previously expressed vague interest in supporting the Court. 
 
¶4. (C) In a remarkable display of denial, on May 17 Premier 
Terzic and heads of the various justice institutions in BiH 
invited ambassadors to what they termed a 'post-Donors' 
Conference' meeting in Sarajevo.  Speaking as if the Brussels 
Conference had never happened, BiH officials, backed by High 
Representative Schwartz-Schilling, told current donors in 
effect, "thank you for past generosity, but we simply must 
have more money for the Court and the prison."  The message 
was generally coldly received.  However, the Swedish 
Government pledged 2 million euros for 2007 operating costs, 
conditional upon seeing tangible progress on a comprehensive 
justice sector reform strategy.  According to the Swedish 
SIDA representative, SIDA became concerned after Brussels 
that the WCC might collapse before the government had a 
chance to create a proper strategy.  Donor pledges for 2007 
now total approximately 7.3 million euros. 
 
UNMENTIONED PROGRESS 
 
SARAJEVO 00001279  002 OF 002 
 
 
 
¶5. (SBU) The Swedes are not alone in insisting that progress 
on justice sector reform is a precondition for additional 
European assistance.  Several bilateral donors and the 
European Union have bluntly told the Bosnians the same.  BiH 
justice institutions have in fact taken initial steps towards 
developing a sector-wide reform strategy.  The Justice 
Ministry is setting up an Office of Strategic Planning to 
lead the process.  The High Judicial and Prosecutorial 
Council (HJPC) is working on a phased unification of the 
judicial budget, which would eliminate many costly 
duplicative structures at the cantonal and entity levels. 
The State Prosecutor's office has developed a two-year plan 
to allocate resources between the War Crimes and Organized 
Crime divisions.  And State Court President Medzida Kreso has 
formally asked the HJPC to provide additional local judges 
and prosecutors, so that the costs associated with supporting 
international professionals can be reduced.  However, BiH 
officials mentioned almost none of these initiatives at the 
May 17 ambassadors' meeting, focusing instead on retread 
appeals for funds. 
 
¶6. (C) Comment: While the BiH government as a whole appears 
still to expect the international community, particularly the 
U.S., to come to its rescue, it is encouraging to see the 
State Court Registry deal proactively and responsibly with 
its financial situation.  Although the funding gap for 
2008-2009 remains, BiH now has some much-needed time to make 
progress on war crimes prosecutions and on concrete justice 
sector reforms.  Armed with tangible success, BiH may be able 
to leverage these accomplishments into additional out-year 
funding.  However, that effort is unlikely to succeed if 
Bosnian institutions individually and collectively continue 
to miss opportunities to communicate the sensible initiatives 
being undertaken, or worse, fail to follow through on those 
initiatives.  Unfortunately, Sweden's additional 
contribution, while ensuring that the WCC can function 
through 2007, may have simply reinforced the  government's 
mindset that if it keeps begging, the money will come. End 
comment. 
MCELHANEY