How Do I Get Paid (Methods of Payment)

The following financial instruments are used in BiH to make payments abroad: remittances, documentary collections, checks, and letters of credit. The safest method of receiving payment for a U.S. export sale is cash-in-advance and/or irrevocable letter of credit (L/C). However, most importers prefer to avoid this costly instrument. Many claim to do business on open account terms with their European suppliers. Nevertheless, a confirmed letter of credit should be a minimum term. Companies that acquire capital goods expect the vendor to provide financing, preferably in the form of a loan.

How Does the Banking System Operate

With a growing number of foreign banks present in the country, competition is strong and banks are starting to offer an extended product range (credit cards, consumer loans, mortgages).  However, the level of bank intermediation remains low, due to the slow restructuring of the economy.  Small and medium size enterprises still experience difficulties obtaining long-term credit.  Inadequate secured transaction regulations and an inefficient court system make collateral foreclosure difficult and increase the cost of capital.  There are currently 29 commercial banks operating in BiH, 19 in the Federation and 10 in RS.  The number of banks is still too large relative to the size of the country.  Due to the minimum capital requirement of EUR 7.5 million, further consolidation is expected.

The Central Bank of Bosnia and Herzegovina (CCBiH) (www.cbbh.ba) is the country’s monetary authority.  Its main goal is to maintain monetary stability under the present currency board arrangement, with full coverage in freely convertible foreign exchange funds under a fixed exchange rate of 1 KM: 0,51129 EURO.  In addition, the CBBiH supports and maintains appropriate payment and settlement systems and co-ordinates the activities related to supervision of commercial banks and coordinates the activities of the BH Entity Banking Agencies which are in charge of bank licensing and supervision.

Foreign-Exchange Controls

In accordance with the Law on the Central Bank, neither the Central Bank nor any other relevant institution may impose payment restrictions on international transactions, except when the Central Bank deems it indispensable to meet BiH’s obligations under international treaties/law.

Commercial banks and financial institutions in BiH may publicly trade in domestic and foreign currency without restrictions according to the law. The foreign exchange and payment system has no restrictions (no administrative management nor limits) on payments and transfers related to international current and capital transactions. In commercial banks, there are no restrictions for individuals or businesses (domestic and foreign) on opening accounts in domestic or any foreign currency, on exchanging KM for any foreign currency, or in payments to foreign partners.

In both Entities, the Law on Foreign Exchange Operations regulates foreign exchange operations. These laws extend identical treatment to domestic and foreign physical and legal entities.

U.S. Banks and Local Correspondent Banks

There are no U.S. banks in Bosnia and Herzegovina. The following are the largest banks in BiH that maintain U.S. correspondent banking arrangements:

Raiffeisen Bank dd Bosna I Hercegovina

Phone: (+387) 33 287 100          Fax: (+387) 33 213 851

Danijela Ozme 3, 71000 Sarajevo

Web site: www.raiffeisenbank.ba

UniCredit Zagrebacka Banka dd

Phone: (+387) 36 312 112          Fax: (+387) 36 312 116

Kardinala Stepinca bb,  88000 Mostar

Web Site: www.zaba.ba

Hypo Alpe-Adria-Bank d.d. BiH

Phone: (+387) 36 444 200          Fax: (+387) 36 444 235

Kneza Branimira bb, 88000 Mostar

Web Site: www.hypo-alpe-adria.ba

HVB Central Profit Banka Bank dd Sarajevo

Phone: (+387) 33 222 999         

Zelenih Beretki 24, 71000 Sarajevo

Web Site: www.hvb-cpb.ba

VolksBank BH dd Sarajevo

Phone: (+387) 33 295 601        Fax: (+387) 33 295 603

Fra Andjela Zvizdovica 1, 71000 Sarajevo

Web site: www.Volksbank.ba

NLB Razvojna Banka

Phone: (+387) 51 221 620        Fax: (+387) 51 221 623

Milana Tepica 4

78000 Banja Luka

Web site:  www.razvojnabanka.com/

Project Financing

International financial institutions including the World Bank, the European Bank for Reconstruction and Development, and the European Investment Bank are the most important sources of project financing where procurement is open to U.S. bidders.

World Bank

The World Bank has committed USD 1.1 billion since 1996 and manages additional funds of $359 million for 43 projects involving rehabilitation of industries, infrastructure, housing, education, health care, and landmine clearance. These funds have been used to purchase goods and equipment, construct civil works, and obtain the consulting services needed to implement these projects.

World Bank borrowers are required to submit timely notification of bidding opportunities and to advertise these opportunities and expressions of interest. Invitations to bid or express interest for contracts under World Bank-financed projects can be found at:

• The Development Gateway Market (dgMarket) is a global online marketplace providing information on donor and government-funded tenders. Currently, dgMarket publishes tender notices for projects funded by the African Development Bank, the Asian Development Bank, Europe Aid, European Bank for Reconstruction and Development, European Investment Bank, EU members states, Phare/Tacis, and the World Bank. For more information, contact: info@N0SPAM.dgmarket.com .
• The United Nations publishes UN Development Business which provides information on business opportunities generated through the World Bank, regional development banks, and other development agencies. Development Business is available in either print format or by online subscription. For more information contact the Development Business Liaison Office at Tel: (202) 458-2397; Fax: (202) 522-3316 or E-mail: dbusiness@worldbank.org.

European Bank for Reconstruction and Development

With EUR 600 million committed toward various projects in the financial, telecommunications, road, railways, and civil aviation sectors, the European Bank for Reconstruction and Development is one of the most significant financial institutions and the largest investor in Bosnia and Herzegovina.

Additional information about EBRD’s projects and its procurement process and rules can be found on the following web sites: http://www.ebrd.com/projects/index.htm and

http://www.ebrd.com/oppor/procure/index.htm

Contact:

European Bank for Reconstruction and Development

Fra Andjela Zvizdovica 1 B-15,
71000 Sarajevo
Phone: (387)(33) 667-945 Fax: (387)(33) 667-950

European Investment Bank

The European Investment Bank (EIB) has been active in BiH since 2000 and has funded numerous projects in the industry, railways, and road sectors in the amount of EUR 745 million.  For additional information on EIB, its projects, and procurement rules, please visit the following websites: http://www.eib.org;  http://www.eib.org/projects/ ; http://www.eib.org/projects/loans/regions/se-europe/BA.htm; http://www.eib.org/publications/publication.asp?publ=44

U.S. Export Import Bank (Ex-Im Bank):

The Export-Import Bank of the United States (http://www.exim.gov/) is the official export credit agency of the United States. Ex-Im Bank's mission is to assist in financing the export of U.S. goods and services to international markets. Ex-Im Bank provides working capital guarantees (pre-export financing); export credit insurance (post-export financing); and loan guarantees and direct loans (buyer financing). On average, 85 percent of Ex-Im Bank’s transactions directly benefit U.S. small businesses. Since October 2002, Ex-Im Bank is open for private sector transactions in Bosnia-Herzegovina and will consider business for short- and medium-term transactions in the private sector.

Contact:
Ms. Margaret Kostic, Director Business Development SEE
E-mail: Margaret.Kostic@N0SPAM.exim.gov
Mr. Craig O'Connor
E-mail: craig.oconnor@N0SPAM.exim.gov
Export-Import Bank of the United States
811 Vermont Avenue, N.W. Washington, DC 20571
Phone: (202) 565-3413
http://www.exim.gov/

U.S. Trade and Development Agency (TDA):

TDA is an independent U.S. government agency that promotes American private sector participation in developing and middle-income countries, with special emphasis on economic sectors that represent significant U.S. export potential. TDA helps U.S. businesses compete for infrastructure projects in emerging markets by funding feasibility studies, orientation visits, specialized training grants, and various forms of technical assistance. TDA has been significantly involved over the past few years in reconstruction efforts in Bosnia and Herzegovina. TDA program funds have supported numerous projects in the energy, telecommunications, transportation, and environmental technology sectors.

Contact:
Ms. Andrea Lupo, Country Manager
E-mail: alupo@N0SPAM.tda.gov  1000 Wilson Blvd., Suite 1600
Arlington, VA 22209 USA
Phone: (703) 875-4357 Fax: (703) 875-4009
http://www.tda.gov/

Overseas Private Investment Corporation (OPIC):

OPIC is a self-sustaining U.S. Government agency that sells investment services to small, medium and large American businesses expanding into emerging markets around the world. OPIC’s three main activities are risk insurance, project finance and investment funds. OPIC has a limit on financing through the investment guaranty and the direct loan programs of $200 million. The OPIC-sponsored equity funds make their own, commercially based investment decisions while fulfilling OPIC’s policy mandates. The most important fund for the region is the $150 million Southeast Europe Equity Fund (SEEF) managed by Soros Private Funds Management.

Contact:

If your request concerns insurance please contact Ms Tara Blake, Tel: +1 202 336 8588 or email tblak@N0SPAM.opic.gov

If your request concerns finance please contact Mr Brian Treadwell, Tel: +1 202 336 8474 or email btrea@N0SPAM.opic.gov

For all other inquiries contact:
1100 New York Avenue, N.W.
Washington, D.C. 20527, USA
Phone: (202) 336-8400 Fax: (202) 218-0109
http://www.opic.gov/

Web Resources

Export-Import Bank of the United States: http://www.exim.gov

Country Limitation Schedule: http://www.exim.gov/tools/country/country_limits.html

OPIC: http://www.opic.gov

Trade and Development Agency: http://www.tda.gov/

SBA's Office of International Trade: http://www.sba.gov/oit/

USDA Commodity Credit Corporation: http://www.fsa.usda.gov/ccc/default.htm

U.S. Agency for International Development: http://www.usaid.gov

European Bank for Reconstruction and Development: http://www.ebrd.com