What are the specific regulations for the trade of chemicals between entities in Bosnia and Herzegovina?

Last week, I wrote about different regulations that apply in various parts of Bosnia and Herzegovina and their impact on doing business in the common market. Today, I'll discuss the most common practical issue: what happens when chemicals are traded between the Republic of Srpska and the Federation of Bosnia and Herzegovina.

Here's a specific example: A chemical seller is based in the Federation of Bosnia and Herzegovina, while the buyer is in the Republic of Srpska.

This raises questions: “Is this purchase considered an import? Do we need a permit? Which regulations apply?” The answer isn't straightforward, but we'll explore it together.

The first and most important question is whether purchasing chemicals from the Federation of BiH is considered an import.

In principle, the answer is no. Trade between entities isn't import in the true sense: goods don't cross a national border and aren't subject to customs procedures applicable to foreign imports.

However, according to the Law on Chemicals in force in the Republic of Srpska, import is defined as “physical entry into the territory of the Republic (of Srpska).” This means that purchasing chemicals from the Federation of BiH is considered an import, making the buyer in the Republic of Srpska the importer.

We already know that the obligations prescribed by the Law on Chemicals fall on the importer, or the first in the supply chain in the Republic of Srpska. These primarily include registration in the Register of Manufacturers and Importers of Chemicals and entry of chemicals into the Chemical Inventory.

Accordingly, chemicals coming from the Federation of BiH must be treated the same as those coming from abroad. They are subject to chemical regulations and must be entered into the Chemical Inventory before entering the Republic of Srpska.

This can be done in two ways:

•          the seller from the Federation of BiH can do it through a business unit in the Republic of Srpska, if they have one, or
•          the buyer in the Republic of Srpska can do it.

Who will actually do it is a matter of agreement. The seller from the Federation of BiH can handle it through a business unit in the Republic of Srpska, freeing the buyer from administrative procedures. Alternatively, the buyer in the Republic of Srpska can take on the registration and annual reporting obligations. Costs are negotiated between the parties.

Now let's look at another example: a company from the Republic of Srpska supplies chemicals to a buyer in the Federation of BiH. In this case, the buyer in the Federation of BiH is considered the importer.

As in the Republic of Srpska, according to the Law on Chemicals, import is also defined as the physical entry of chemicals into the territory of the Federation of BiH. This means that the buyer in the Federation of BiH must apply the regulations in that entity and obtain the necessary permits.

Since the regulations on poisons are still in effect, it's necessary to determine whether the chemical is considered a poison or if the product contains substances from the List of Poisons Allowed for Trade in the Federation of Bosnia and Herzegovina. If so, a permit for trading poisons is required, even if the chemical comes from an importer based in the Republic of Srpska.

Regardless of the direction of chemical movement, it's always necessary to adapt the documentation accompanying the chemical to the target market requirements. This primarily refers to the Safety Data Sheet (SDS) and label.

You might now see inter-entity trade differently. So before sending your first shipment of chemicals to a buyer in another entity, check which regulations apply. It's not enough to meet all the requirements in the entity where your headquarters is located.

If you're a buyer, you must check which obligations apply in your entity:

•            in the Republic of Srpska: ask the seller from the Federation of BiH if they have already registered the chemical in the Inventory. If not and they don't plan to, this will be your responsibility. Or you might need to change suppliers.
•            in the Federation of BiH: check if the chemical you're purchasing is considered a poison. If so, you need to obtain a permit for trading poisons. This should be done by you or your seller from the Republic of Srpska through their business unit in the Federation of BiH.

From today's text, you can conclude that internal trade in Bosnia and Herzegovina isn't free from obligations. If you're unsure which regulations to apply, write to me at nina.pajovic@bens-consulting.eu.