Kosovo hits Serbia, Bosnia with 100 percent customs fees after Interpol snub

TIRANA (Reuters) - Kosovo on Wednesday raised customs tariffs on Serbian and Bosnian goods from 10 to 100 percent after Serbia blocked its former province from joining Interpol, the international police organization.

Its retaliation, which was criticized by the European Union, also required authorities to remove or prevent from entering any goods that did not address Kosovo by its constitutional name, Republic of Kosovo, which Serbia and Bosnia do not recognize.

“This will halt any trade between Serbia and Kosovo,” Serbia’s Trade Minister Rasim Ljajic said.

President Aleksandar Vucic called a meeting of Serbia’s National Security Council to review the tariffs.

Bosnia, Kosovo and Serbia - along with Albania, Montenegro and Moldova - are part of the Central European Free Trade Agreement (CEFTA) set up to help ex-communist states harmonize their economic and legal systems with EU demands.

The EU’s foreign policy chief, Federica Mogherini, said Kosovo’s move was a clear violation of CEFTA and of the spirit of the Stabilisation and Association Agreement between the European Union and Kosovo.

“The Kosovo government has to immediately revoke these decisions,” Mogherini said in a statement.

Bosnia’s Foreign Trade and Economic Relations Minister Mirko Sarovic said: “This is the biggest blow to the regional free trade zone.”

According to official figures, Serbia’s exports to Kosovo amounted to 440 million euros ($500 million), while imports amounted to 21 million euros. Bosnia’s exports to Kosovo reached 80 million euros last year.

Two weeks ago Kosovo imposed a 10 percent import tax on goods coming from Serbia and Bosnia. The European Union has urged Pristina to reverse that decision.

Kosovo’s mostly ethnic Albanian population declared independence from Serbia in 2008, a decade after a NATO bombing campaign to end the killing of Albanian civilians by Serb forces during a two-year insurgency.

It is now recognized by more than 110 nations but not by Serbia, Russia or five EU states. Belgrade and Moscow have blocked Kosovo from joining the United Nations.

In 2013 both countries agreed to an EU-sponsored dialogue to resolve outstanding issues, but little progress has been made.

Kosovo blamed a campaign by Serbia for its failure to join Interpol and said Serbia was against normalizing relations, key for both countries if they are to join the European Union. Bosnia also voted against Kosovo’s membership.

“The government has decided to impose a tax of 100 percent on imported goods coming from Serbia and Bosnia,” Prime Minister Ramush Haradinaj said.

Additional reporting by Maja Zuvela in Sarajevo and Ivana Sekularac in Belgrade; Editing by Janet Lawrence and Alison Williams