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Background briefing on the Brcko decision, released by the Office of the Special Representative for Implementation of the Dayton Agreement, Washington, DC, March 5, 1999

SENIOR ADMINISTRATION OFFICIAL: At the time of the conclusion of the Dayton agreement, the one area, both substantively and geographically, that was not capable of being resolved was the disposition of the territory of Brcko.

President Slobodan Milosevic, in fact, suggested that Roberts Owen -- a distinguished Washington lawyer who is part of Dick Holbrooke's team, former legal advisor of the State Department during the Carter Administration and a partner in Covington & Burling -- President Milosevic proposed that Roberts Owen be designated as the arbitrator. At the time, he said that because he had come to know Mr. Owen and cited his fairness he said that he would certainly recommend that Owen be appointed, and said that whatever decision Owen came up with he would abide by and he would work to implement that agreement fully. President Tudjman similarly supported that proposal, and then-Secretary of State Christopher asked Bob Owen to take that position, which he did.

Over the past three years, the arbitral panel, which has been composed of Roberts Owen as president of the tribunal and an arbitrator from each of the two entities -- one from the Serb side, one from the Bosniac side, actually -- held arbitral award hearings annually to look at the question of the award. Now, the views of the Bosniac and Serb arbitrators were predictable and came out always a we had expected. Therefore, the president of the tribunal, Mr. Owen, was the one who really had the decisive vote.

In 1997 in his arbitral award, he decided to postpone the decision on Brcko. He did the same thing in 1998. But at the time of the award in 1998, which came out on March 15 last year, he said that he would have made a decision and probably have given the award to the Bosniac-Croat dominated Federation if it had not been for the arrival of Milorad Dodik as Prime Minister in January of last year. Given the expectation that Dodik was going to make some serious progress in terms of Dayton implementation, he felt that he ought to, therefore, postpone the decision for yet another year.

The criteria that Mr. Owen has used have been basically two sets of issues: first, adherence to and implementation of the Dayton agreement on the ground in Brcko itself. The territory has actually been part of the Republika Srpska since Dayton, pending the outcome of the final arbitral award. But Owen wanted and provided very clear guidelines about the kinds of progress he expected, such as establishment of a functioning, multi-ethnic administration, multi-ethnic police, fair legal system and, perhaps most importantly, return of refugees -- particularly Bosniac and Croat refugees -- to the town of Brcko.

Then on a macro level, he said that an overriding consideration would also be given to implementation of the Dayton agreement by each of the two entities, in judging also the disposition of the territory.

Owen has now come out with his decision and, no great secret, he has decided that the outcome of this should be to establish a special district, which is being called the Brcko District of Bosnia-Herzegovina. The award creates this Brcko District of Bosnia and Herzegovina not just in the town, but in the entire pre-war Brcko County, or Opstina. The district is not a third entity; I want to be very clear about that.

Dayton calls for two entities -- Republika Srpska and the Federation. This is a special autonomous district with links into the state government, the country of Bosnia-Herzegovina and the joint institutions. It will simultaneously be considered -- this is very important -- to be within the territory of both the Federation and the Republika Srpska; in other words, a kind of condominium. The way I've tried to think about it is sort of a kind of geopolitical tectonic plate mechanism, with sort of -- I was never good at science -- overlapping political sovereignty.

The district will come into being on an effective date, to be decide by the supervisor of Brcko, Ambassador Robert Farrand, a retired American foreign service officer. On that date, which is still to be decided, both entities will be deemed to have delegated all of their forms of governance within the district to a district government. The award will create a single, multi-ethnic, democratic local government that will exercise throughout the entire pre-war Brcko -- Opstina -- those powers currently exercised by the two entities and existing municipal administration.

In effect, we're seeing some additional territory come into this district from Republika Srpska and a lot more coming in from the Federation. But the basic 51-49 percent division of territory between the two entities is being maintained.

Bosnia's joint institutions will have the same powers over the Brcko District as they do over other parts of Bosnia. The supervisor will be responsible for coordinating actions by the district government and the entity governments. He will turn that responsibility over to the joint presidency when he believes they're ready to assume it, and not until then.

The question is, why did he decide not to continue to allow this territory to be solely within Republika Srpska? The answer is that in spite of the best efforts by the Dodik Government, the award makes clear that the SDS -- Karadzic's party -- and the SRS, the radical party, that former entity president Nikolai Poplasin represents -- we'll get back to that, I'm sure -- have created enormous difficulties in implementation over the past year. If they had allowed Prime Minister Dodik -- this is very important -- to implement his program, as outlined and as approved by the Republika Srpska Assembly, the tribunal might very well have reached a different conclusion.

The award makes explicitly clear that it blames the anti-Dayton policies and actions of President Poplasin, -- (inaudible), the head of the radical party in Serbia, who is Poplasin's mentor, Slobodan Milosevic, the SDS and the radicals for the tribunal's decision that removing Brcko from the Republika Srpska's exclusive control is necessary to implement the Dayton accords in the Brcko area.

Specifically, the award notes the failure of the SDS dominated local administration in Brcko to comply with its commitment to facilitate Bosniac and Croat returns to the town of Brcko and support multi-ethnic government.

The award particularly outlines numerous examples of Poplasin's violations of the Dayton agreement. On at least three occasions of which I'm aware, he publicly stated the goal of having Republika Srpska reintegrated into Serbia, as opposed to maintaining the territorial integrity of Bosnia-Herzegovina. He has committed a number of other gross violations, the frequency of which has increased in the last week or so both in terms of the number and the severity of those violations.

International supervision of Brcko will continue until terminated by the Peace Implementation Council. The supervisor's authority will be extended to cover this entire district. The supervisor will have a great deal of flexibility to determine the pace of implementation and which issues will be resolved first. He will have the authority to punish non-compliance with the award through his supervisory orders. More serious examples of non-compliance will be punished by the tribunal itself, which will retain jurisdiction over the Brcko dispute. The tribunal will be able to punish cases of serious non-compliance by either entity by modifying the award or giving Brcko outright to the other entity if it's complying.

In other words, if there should be serious non-compliance or a gross pattern of misbehavior by one entity or the other, it could move from being a special district with condominium sovereignty to being part of the other entity entirely. We want to be very clear about how serious this is in the arbitrator's view.

The Republika Srpska military will retain the right to transit Brcko with SFOR's approval. The supervisor will establish a date for the demilitarization of the district, which will take place eventually.

Implementation of the final award will primarily involve merging the two police forces, local governments, school curriculums and so on currently operating in the Federation and Republika Srpska-controlled parts of the Brcko-Opstina. An annex containing proposed solutions for some of the most important implementation issues, including the status of the district residences, the structure of the district's government, the judicial and penal system and a mechanism for resolving differences between Republika Srpska and Federation laws will be attached to the final award. The annex will not be legally binding, and both sides will be invited to comment on it in writing during the next 60 days. After that, the tribunal will decide whether to issue the annex as is as a legally binding decision or to amend it.

The award will note the Federation's failure to comply with the terms of the Sarajevo Declaration for refugees returns, too, in Paragraph 22 of last year's award, on the need to facilitate Serb returns from Brcko to their former homes in the Federation -- particularly Sarajevo. The tribunal, therefore, recommends to the High Representative that he take further strong steps to facilitate returns.

Now, one of the key issues -- if you can see these maps -- Brcko is at a bottleneck in Republika Srpska. One of the questions that has come out is whether this does not, as many Serbs have expressed concern about, if this does not in essence cut Republika Srpska in two. The answer to that is, we believe and the arbitrator believes in a single state of Bosnia-Herzegovina. Under those circumstances, Brcko does not have any strategic importance. It's as simple as that.

Secretary Albright has issued a press statement that I hope you've all seen. She has also been in contact with many foreign ministers from the steering board countries' contact group. She also wrote to Presidents Tudjman and Milosevic about the decision and also to the heads of a number of relevant international organizations, such as the Secretary General of the United Nations, Secretary General Solana of NATO, the Chairman-in-Office of OSCE and so on.

I've seen the United Nations press statement that was issued, which strongly supported the idea of issuing this now, and a statement that they believe this was a fair and just decision.

As you're aware, coincidentally with this, earlier today at approximately 12:35 p.m. Sarajevo time -- 6:35 a.m. Washington time -- the High Representative also dismissed Republika Srpska President Nikolai Poplasin from his post. In doing so, he cited his authorities under Annex X, Article 5 of the Dayton agreement, which make the High Representative the final arbiter on all issues related to civilian implementation. He also cited the so-called Bond Powers, where he can be more aggressive in doing this.

We fully support the High Representative's decision. It has become, as I said earlier, disturbingly clear, that the pace of gross violations of the Dayton agreement and fundamental standards of democracy by ex-President Poplasin were increasing both in terms of their frequency and their severity. He refused to accept the High Representative's ruling of two weeks ago transferring the authority of commander-in-chief of the Bosnian Serb Army from himself to the Serb member of the joint presidency.

Now, in the constitution of Bosnia-Herzegovina, it calls for the tripartite presidency of the country to be the commanders-in-chief of the armed forces. It's clear and understood that the constitution of the state of Bosnia-Herzegovina has sway over either entity's constitution. He refused to accept that.

Since then, in contravention of the High Representative's order, he chaired two meetings of the Republika Srpska Supreme Defense Council, most recently on Wednesday, even after he'd been warned.

Second, he violated the constitution of Republika Srpska repeatedly regarding the government of the RS and the will of the people of the RS by refusing to accept Prime Minister Dodik as the Prime Minister and to accept the will of the Republika Srpska Assembly. His first candidate for Prime Minister was a completely discredited SDS politician named Dragon Kalandic, a close associate of Karadzic, who was soundly rejected by the RS Assembly. His second candidate was a man named Brane Miljus, whose many contradictory statements gave us all raised serious questions of his own stability.

Mr. Miljus, in fact, had been expelled from the University of Sarajevo at one point by his then faculty advisor, Mr. Seselj for plagiarizing his doctoral dissertation from Marx and Engels.

(Laughter.)

I think this man was from another time. But he was also rejected by the Assembly. They hadn't even consulted his own party.

Poplasin violated the constitution in not proposing to the Assembly another candidate, and the constitution says that a candidate had to be proposed within ten days.

The High Representative warned Poplasin in very clear terms in a letter he sent, which has come out in the press on Wednesday, that if he did not recognize Prime Minister Dodik as the legitimate Prime Minister and didn't stop all these efforts to overthrow him, he would be forced to use his powers. Yesterday Poplasin sent back an extraordinarily provocative and insulting letter in which he, in essence, threatened violence in Republika Srpska.

Do we have a copy of that? If we can get a copy of that, I can read you the key paragraph in which he does threaten violence. See if we can get that right now.

As a result of that, I believe that Mr. Westindorp considered that the final straw and so made this decision and took this action early this morning in a separate public statement from the High Representative's announcement of the Brcko decision.

Things are quiet in Brcko. They're essentially quiet throughout the rest of Republika Srpska. There was one small demonstration -- not even sure it's worthy of being called a demonstration -- in Brcko; very quiet, I think only 20 people or so. But things are very quiet as we head toward night.

We have heard that Prime Minister Dodik has handed in his resignation. But we hope the situation will clarify over the weekend. We do feel that Prime Minister Dodik has pursued a strong pro-Dayton agenda during the 13 months he's been in power. There has been some criticism from hard-liners alleging that they supposedly lost Brcko because of him. I hope I have been clear that the situation regarding the disposition of Brcko could have been a lot worse for Serb interests if not for Dodik.

In point of fact, it was Poplasin, the SDS, Milosevic and Seselj who are the ones responsible today for Brcko now being declared a special district rather than being solely under the sovereignty of Republika Srpska.

We are aware that President Milosevic has indeed, behind the scenes, been trying to manipulate the situation through his instructions to Poplasin and other politicians. We feel this is especially unfortunate and wrong, since he is supposed to be a guarantor of the full implementation of the Dayton agreement; highly regrettable. But the result is manifested now in the decision on Brcko.

As I said, there are mechanisms so that if there is a further lack of compliance or gross misbehavior, it could even revert to the Federation. We certainly hope that after careful consideration of the award, in place of the immediate emotional reaction regarding Brcko the members of the Assembly and politicians in Republika Srpska will see that it's in their interest to have a strong, pro-Dayton government -- either a Dodik Government or a government which espouses the same kind of policies that the Dodik Government has espoused and carried out.

I'd be happy to take your questions.

QUESTION: There's something of a power vacuum now in the Republika Srpska. What is the likelihood that there will be no government, no state in Republika Srpska; or do you think they're going to pull themselves together and if so, how?

SENIOR ADMINISTRATION OFFICIAL: They have called for a meeting of the Republika Srpska Assembly on Sunday. I wouldn't want to or be able to forecast what will be the outcome of that session. As I say, I hope they'll sit down and read the award. We have carefully translated it into Bosnian, Croatian and Serbian so as not to offend anybody. It's also in English. We hope they'll look at it and understand why the decision came out the way they did.

The Republika Srpska constitution, in terms of succession at the presidential level, does not go beyond the vice president. The Vice President, whose name is Saravic, who's from the SDS, has also said he won't take it over. It's interesting. We understand that Bosnian-Serb television is already referring to Poplasin as the former president. So they seem to get it.

But we expect that the situation will clarify. Meanwhile, the High Representative, with his legitimate and legal capacities, is looking at the issue of basically constructing a succession mechanism similar to those used in Europe or in other places.

QUESTION: Would you regret if there was something -- I don't know quite what to call it -- maybe an implosion -- of the Republika Srpska?

SENIOR ADMINISTRATION OFFICIAL: I don't believe there will be.

On Brcko, for those of us who have been associated with this issue and issues in Bosnia-Herzegovina for some time, we have come to the conclusion that there was and never would be a good time to make a decision. Therefore, we felt -- and the arbitrator felt -- that this was a good time to do it, or the best possible time he could think of. We certainly don't regret the timing of this. In fact, we had anticipated that there might be some outcomes which wouldn't, in the extremely short term, be favorable. But we think the situation will clarify in a favorable way in the next couple of days.

QUESTION: I'd like to salute Ambassador Rube Goldberg for his creative work here, but he leaves a certain number of questions about this piece of land. How big is that district that's shaded on the map there? And in that district, who is actually in charge of keeping order in the streets and maintaining public services?

SENIOR ADMINISTRATION OFFICIAL: First, the supervisor, who is also a deputy high representative, has significant authorities himself that derive both from the High Representative and from the Dayton agreement and the arbitrators and the arbitral award and the tribunal.

There is a multi-ethnic police force that has been established in the town of Brcko and was established about a year ago. There is a significant IPTF contingent, headed by an American. But by expanding the size of Opstina, the county, there are several other communities involved, both on the Federation side and the Republika Srpska side.

As I said, over time, this will be blended into one territory. The police forces, the educational system, the judicial system will be integrated. But that will happen over time. As I described, those ideas for that will be outlined in the annexes attached to the award. Then the arbitrator will await ideas from the two sides over the following 60 days.

Meanwhile, there is a very strong SFOR presence. For those of you who know the area, you'll know Camp McGovern. It's US military installation that is just outside Brcko. There's a significant US military presence there, particularly right now. In part because they're in the midst of the change-over of one unit to another unit. With a combination of SFOR, IPTF, other international organizations, they will be working with the municipal government of the town of Brcko as well as the outlying ones to develop this integrated approach.

QUESTION: Ten square miles, 20, 30?

SECOND SENIOR ADMINISTRATION OFFICIAL: 80 square kilometers, that's a very approximate.

QUESTION: Is that the whole area?

SENIOR ADMINISTRATION OFFICIAL: I don't know; I couldn't tell you how many American troops there are. But we're very --

QUESTION: Is it double normal right now?

SENIOR ADMINISTRATION OFFICIAL: No, as I said, there's an unusually large number, it turns out, because they're in the process of a transition.

QUESTION: And they might stay?

SENIOR ADMINISTRATION OFFICIAL: Well, no, I expect that we'll -- we have full confidence in our troops under any circumstances. The commander of MMD North, General Kevin Burns, has been doing a great deal of planning and preparation for this, and we've got total confidence in his ability to control the situation.

QUESTION: Can you explain, in the past Brcko was just handled as Brcko the city and now, under this permanent award today -- or as permanent as it can be -- so how big was the city versus -- I mean, you really expanded it quite a lot. What was the reason for that?

SENIOR ADMINISTRATION OFFICIAL: Well, a lot of that is farmland. What was done by the arbitrator, as I say, was to restore -- and he's independent and this was his idea to do this. It really was. He decided to restore Brcko to the entire pre-war county, Opstina.

QUESTION: (Inaudible.)

SENIOR ADMINISTRATION OFFICIAL: It's important to remember that Brcko used to have a plurality of Bosniacs. I think it was about 45 percent in the town.

SECOND SENIOR ADMINISTRATION OFFICIAL: In the town, over 50 percent. In Opstina, about in the 40 percent.

SENIOR ADMINISTRATION OFFICIAL: Yes. Second largest population group in the town were Croats.

SECOND SENIOR ADMINISTRATION OFFICIAL: In the town, Serbs. In Opstina-wide, Croats were second.

SENIOR ADMINISTRATION OFFICIAL: The reason there is virtually no Bosniacs left is because of some absolutely horrific ethnic cleansing that occurred there. The arbitrator felt, we certainly felt, we do not want to validate and reinforce the results of ethnic cleansing. The new population profile, the demographic profile which will exist in the entire Opstina, actually reflects a population profile which is at least more in the direction of the pre-war one. But a primary function of the new government and for the supervisor will be displaced person and refugee returns.

That's why we also want to emphasize the need for a mechanism to bring more Serbs who are displaced from the Sarajevo region and who are now in Brcko to be able to return to their homes in Sarajevo.

QUESTION: But the boundaries themselves, were they actual legal pre-war boundaries?

SENIOR ADMINISTRATION OFFICIAL: Well, to the extent that any county equivalent has boundaries, this is what it looked like. As I say, when it goes into place, the inter-entity boundary line, which is this, will then disappear. We don't want to have any kind of sense of confrontation line between the two sides.

QUESTION: Which one will disappear, which line?

SENIOR ADMINISTRATION OFFICIAL: The inter-entity boundary line, which would now divide it.

QUESTION: How do people from one side of the Republika Srpska get to the territory on the other side?

SENIOR ADMINISTRATION OFFICIAL: There will be -- first of all, just as anybody can transit anywhere in Bosnia right now, this is one of the reasons I have stood here before as we have all talked about the single license plate, so people can't identify where anyone's from. People don't have to go through Brcko.

The point here is you don't have to go just from -- if you're in Banja Luka and you want to get over here, you don't have to go just like this. You can drive right through. But freedom of movement is a fundamental guarantee in the Dayton agreement. We not only expect, but we intend to assure that freedom of movement for all will be respected going in every direction.

The only one I highlighted was the ability of the Bosnian Serb Army, the VRS, to be able to continue to transit Brcko with SFOR's permission. They have to have SFOR's permission to travel anywhere anyway.

QUESTION: Am I correct that Camp McGovern is not within this district?

SENIOR ADMINISTRATION OFFICIAL: No, it's outside of it (Brcko town).

QUESTION: It's outside the district.

SENIOR ADMINISTRATION OFFICIAL: But it's very close by (within new district).

QUESTION: On the VRS, is it true that it is more or less controlled by Milosevic, and that it's officers are still paid by Serbia?

SENIOR ADMINISTRATION OFFICIAL: I wouldn't say that. First of all, I'm not sure that Milosevic has the ability to pay anybody right now. In fact, I understand that his own army, the VJ, is a few months behind in receiving their own salaries. The Bosnian-Serb Army is under the control of General Talic, who has been behaving reasonably well, according to SFOR. I wouldn't say they're controlled by Milosevic.

There have been -- and perhaps continue to be -- training, support and other kinds of relationships between the VJ and the VRS. But the dismal economic situation of the Federal Republic of Yugoslavia has really diminished significantly any kinds of support for the VRS-particularly including spare parts, money for gas, things of that sort.

QUESTION: But why not just cut it off? Why does the United States or why do the NATO powers tolerate any relationship with Serbia?

SENIOR ADMINISTRATION OFFICIAL: Well, we don't tolerate it; in fact, we've looked extensively, when we have heard information that there may be any kind of formal relationships, back in September-October, when there was so much tension around Kosovo, we did hear reports of possible VRS soldiers in Serbia. We investigated. If there were, they were there in very small numbers.

There's a very extensive border between Serbia and Republika Srpska, as you know very well. And it's virtually impossible to shut off all of it. There's a lot of contraband that comes over. My sense is the VRS is not a very mobile army, precisely because they don't have very much in the way of money, spares, gas and so on. They certainly don't have a train-and-equip program along the lines of the Federation Army.

QUESTION: Are they confined to barracks?

SENIOR ADMINISTRATION OFFICIAL: Well, not always. Most recently, of course, there was this incident that you're aware of, where SFOR -- once again, American troops -- discovered some truckloads of highly dangerous equipment -- particularly SA-7 missiles, ground-to-air missiles, Red Arrow anti-tank systems. The result was SFOR took very strong and decisive and quick action by disbanding the 311th unit. But they have to ask for permission before there are movements.

I've talked to our military leaders about this. They watch all the militaries with great care. Certainly, I can speak most authoritatively about MND North, the American sector -- Multi-National Division North -- where there is an American commander, Major General Burns, whom I mentioned. I have total confidence in him. I've known him about five years in previous capacities.

QUESTION: First just a quick question -- those weapons that were seized last week, where were those alleged to have gone? Somebody said they might be going to the highest bidders in Kosovo. Is that right?

SENIOR ADMINISTRATION OFFICIAL: Well, I've heard speculation the same. Some people speculated it might be going to the VJ; some say to the Kosovo Liberation Army. It's entirely believable that it would be the latter two; I don't know.

QUESTION: The picture this paints -- this decision, the decision on the president of the Bosnian-Serb Republic and the way things are going in Kosovo -- is that in Washington, at least, you all are ready to end it with Milosevic. You're spoiling for a fight; you're being highly provocative; and you just want to finish it. Can you comment on that?

SENIOR ADMINISTRATION OFFICIAL: I think Jamie Rubin has made our views of Milosevic quite clear. We knew when Poplasin was elected that we had serious doubts about whether it would work. His history was bad. I don't know if you've ever seen that notorious picture of him dressed as a Chetnik. His position as a protŽgŽ of Seselj gave us absolutely no reason to have any confidence that he was going to be pro-Dayton, pro-democracy, pro-free market economics. I myself had several meetings with him and came away convinced of that.

So we tried. We believe in democracy. His election was a result of the people's will. We tried. But the international community is not going to accept people who are flagrantly flouting the Dayton agreement. Poplasin is the highest official who has been dismissed thus far by the international community, but we certainly hope others will pay attention because there could be others if they, too, don't implement Dayton and work as hard as they can to do so.

But the decision on Brcko -- this is a direct result of Dayton; literally of Dayton. That's why I was so careful at the beginning to point out that it was Milosevic who asked for Roberts Owen to do this.

QUESTION: Yes, it's all separate but all sort of related.

SENIOR ADMINISTRATION OFFICIAL: Well, I think they're related in the sense that we know that starting a year ago when Kosovo became much more violent, that President Milosevic also began to try to undermine the Dodik Government -- the very same Dodik Government that he helped put into office; and I thanked him for it early last year. In fact, he and I had a conversation when Dodik was put forth -- Dodik was not the first person to be put forth to be prime minister; it was a man named Mladen Ivanic. When the Assembly wasn't too enthusiastic about him, President Milosevic called me and said he had this other wonderful person named Dodik.

We think Dodik has done a wonderful job. However, once Kosovo started to heat up, he began to try to create a separate front by undermining the Dodik Government. He continued to try to do so, really accelerating that, over the course of the last several months. So I would turn it around and say it's he who is now trying to go back on his word, go back on his commitments and undermine the Dayton agreement. That's why I've made it a point to stress his own personal commitment to fully implement any Brcko arbitrator's outcome.

QUESTION: Can you take a Kosovo question?

SENIOR ADMINISTRATION OFFICIAL: No.

QUESTION: I just want to make sure I understand the dimensions of this. This area now is now 80 square kilometers, and it was what before?

SECOND SENIOR ADMINISTRATION OFFICIAL: (Inaudible.)

QUESTION: No, but before, during the interim period. What size is the town?

QUESTION: During this interim period, what size has the corridor been?

SECOND SENIOR ADMINISTRATION OFFICIAL: I don't have that.

QUESTION: Did you say kilometers or miles?

SENIOR ADMINISTRATION OFFICIAL: Kilometers.

QUESTION: You can't tell -- I mean, there must be some way to quantify the proportion between what was Brcko in this interim period and what has now been established by this agreement.

SENIOR ADMINISTRATION OFFICIAL: All this part was Republika Srpska.

QUESTION: Right, I understand, all the gray part.

SENIOR ADMINISTRATION OFFICIAL: The supervisor was in this town. All this part was the Federation.

QUESTION: Right, and now the supervisor has the whole area.

SENIOR ADMINISTRATION OFFICIAL: That's right.

QUESTION: That's what I want to be able to quantify. Is it 1/20? It looks like it might be 1/20.

SENIOR ADMINISTRATION OFFICIAL: We'll see if we can get you that information right away.

QUESTION: Obviously you have sort of a constitutional crisis in the Republika Srpska right now and we are -- (inaudible) -- High Representative and President Milosevic -- (inaudible) -- Pale, Banja Luka. Do you expect, then, what could be the impact of the crisis in Republika Srpska to the ongoing efforts to find a peaceful solution for Kosovo?

SENIOR ADMINISTRATION OFFICIAL: We hope that President Milosevic will see by the decision of the arbitrator on Brcko, by his decisive action and by the decisive action of the High Representative regarding ex-President Poplasin and by the firmness that SFOR is demonstrating and will continue to demonstrate, that we are also firm and really serious about resolving the Kosovo issue in accordance with the agreement that was proposed.

QUESTION: One thing on the Kosovo issue, which is that daily Milosevic is building up his forces, expanding their area of control, expanding their claim. They even now put wanted posters up for the man who the Kosovars are supposedly saying is their prime minister. NATO is just watching it. I mean, it seems like violations of the October agreement are just legion and expanding and there's no response. I'm just wondering, is NATO or is the United States walking away from the October agreement? And if not, how?

SENIOR ADMINISTRATION OFFICIAL: I'm just here to talk about Bosnia. Thank you.

QUESTION: It sounds like you're connecting the two. In terms of the timing, it being between the Rambouillet talks and the renewal of talks on March 15, is there anything that we can understand from the decision coming between the two sets of talks in Kosovo?

SENIOR ADMINISTRATION OFFICIAL: Several things. First, as I said earlier, there's never a good time on Brcko. It's important to remember, for those of you who haven't been around this from the Dayton period, this area was so hotly contested that it was the one area that could not be decided at Dayton. That's really important. So there's never a good time.

Second, there was a good deal of discussion about the timing. So draw your own conclusions.

QUESTION: (Inaudible) -- any more controversial time in the last four years than now.

SENIOR ADMINISTRATION OFFICIAL: Well, there was a sense that this would be a good time, an appropriate time.

QUESTION: Can you follow that thought through a little bit more? I mean, you send a tough message to Milosevic.

SENIOR ADMINISTRATION OFFICIAL: Well, we feel the decision on Brcko has demonstrated serious resolve here on the part of the international community.

QUESTION: Last year it was a big deal to talk about bin Laden and Karadzic. Now that you've rewarded $5 million for first and $5 million for Bosnia, let's say, war criminals, do you have anything about that or is that underway?

SENIOR ADMINISTRATION OFFICIAL: The Congress approved, at the end of its last session, a rewards program for war criminals, authorizing us to expend up to $10 million in any fiscal year -- maximum of $5 million for any individual. We expect to speak publicly very soon about the guidelines for that program. But the program does exist.

QUESTION: This Administration is quite, let's say, clear about Serbs right now.

SENIOR ADMINISTRATION OFFICIAL: No, no. We're clear about all the parties in Bosnia. We feel that all the parties, whether they're Bosniacs, Croats, Serbs or anybody else have to abide fully by the Dayton agreement or there will be consequences.

QUESTION: I wanted to ask you, sir, Ambassador Gelbard not a long time ago was very critical regarding Bosniacs and regarding privatization. How would you -- what is the situation in Sarajevo? Do you believe that the recent changes among Bosniacs --

SENIOR ADMINISTRATION OFFICIAL: Well, first, we feel that there has not been anything like sufficient progress on developing a self-sustaining market economy in Bosnia-Herzegovina. Probably the least progress has been on the Bosniac side. Even McDonald's can't get into Sarajevo, and has encountered serious obstacles reminiscent of communist days. They're being asked to pay prices for land in Sarajevo that probably, roughly, are the same is mid-town Manhattan. They have been, at various times, told by government authorities how many employees they should hire. They have at various times been told they have to use a certain percentage of Bosnian beef, Bosnian flour. That's not the way to attract foreign investment. There are lots of other examples involving electricity companies that are trying to get in and others.

So we are deeply concerned because the United States Government and other donors -- both bilateral and multilateral -- are quite frustrated at this point, and aid levels will be diminishing. Next week, the week after next in Bosnia there will be a review of compliance with the Madrid Peace Implementation Council. Then we'll determine whether there will be a donor's conference, whether.

The second point is, you'll notice in the reward, we are quite critical of Bosniac performance on refugee returns to Sarajevo. President Izetbegovic agreed a year ago to work to bring back 20,000 refugees and displaced persons by the end of 1998. That figure, we believe, has been significantly less -- somewhere between 4,000 and 8,000. We believe that by failing very consciously to provide adequate housing for these people and putting in all kinds of other roadblocks, they have certainly been losing any kind of moral authority they might have had.

QUESTION: Media?

SENIOR ADMINISTRATION OFFICIAL: A great deal more work needs to be done to establish a free and independent media throughout the country on all three sides.

Thank you. [End of Document]

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