October 4, 2022

OFAC designates 2 individuals and 1 entity for undermining democratic processes in the Western Balkans

On October 3, 2022, the US Department of the Treasury’s Office of Foreign Assets Control designated two individuals and 1 entity in Bosnia and Herzegovina (BiH) pursuant to Executive Order 14033, for engaging in actions that destabilize or undermine democratic processes in the Western Balkans.  In accordance with the 1995 Dayton Peace Agreement (DPA), the BiH is comprised of two entities – the Federation of Bosnia and Herzegovina (“FBiH”) and the Republika Srpska (“RS”) – and the designations imposed are for actions that affect one of both of these entities.

OFAC designated the Prime Minister of the FBiH, Fadil Novalic, for misusing his political influence and position to have mass mailings sent to FBiH pensioners just a week before the 2018 election that promised increased pensions, in violation of BiH law.  OFAC also designated one of the BiH’s wealthiest businessmen, Slobodan Stankovic, and Integral Inzenjering AD Laktasi (“Integral”), an engineering firm that he owns, for their links to corruption in the construction sector of the RS.  According to OFAC, major construction projects in the RS are often awarded to Stankovic and Integral without fair and open competition, which is likely due to his corrupt relationship with Milorad Dodik, a member of the Presidency of BiH who was previously designated by OFAC for engaging in RS secessionist rhetoric which undermined the DPA.    Dodik was designated by OFAC in January of 2022 pursuant to EO 14033, for threatening the implementation of the DPA and engaging in corruption related to the Western Balkans, and pursuant to EO 13219, as amended by EO 13304, for actively obstructing or posing a significant risk of obstructing the DPA.

As a result of these designations, all property and interests in property of these designees within the United States or within the possession or control of a U.S. person are blocked, and U.S. persons are generally prohibited from engaging in transactions involving the designated persons.  US persons may face civil or criminal penalties for violating EO 14033.

Department of Treasury press release