1. PROSPECTS FOR COOPERATION BETWEEN THE REPUBLIC OF KOREA AND BOSNIA AND HERZEGOVINA

2. FOREIGN TRADE CHAMBER OF BOSNIA AND HERZEGOVINA FTCBH is a National level Chamber – National level Chamber – a non–governmental, non-profit association of enterprises from Bosnia and Herzegovina as a whole 13,000 member companiesinternational trade activities About 13,000 member companies registered for international trade activities – associated on the basis of mandatory membership.MISSION To upgrade overall B&H foreign trade through presenting the country’s economic potential abroad, as well as representing the members’ interests before B&H Government.

3. FTCBH MAIN ACTIVITIES IN THE AREA OF INTERNATIONAL TRADE  Promotion of B&H economy abroad:  Promotion of B&H economy abroad: business missions, conferences, presentations, participation at international trade fairs  Representing  Representing members’ interests before Government on int. trade issues  Matchmaking  Matchmaking between member-companies and foreign counterparts  Business education  Business education, for the members and interested parties;  Public authorizations / certifications / export licences  Assistance to foreign business missions  Assistance to foreign business missions to B&H  Information on business opportunities / publications  Data base  Data base on investment projects of B&H companies  Cooperation  Cooperation with Chambers, international organisations, diplomatic missions, etc.

4. GENERAL ECONOMIC INDICATORS (2005 – 2009) INDICATOR INDICATOR 2005 2006 2007 2008 2009 Nominal GDP (million KM) 17.127,0019.252,0021.760,0024.702,0023.994,00 Nominal GDP (million USD) 10.889,0012.346,0015.222,0018.481,0017.047,00 Nominal GDP (million EUR)8.756,909.843,3911.125,7112.629,9312.267,94 INDICATOR 2005 2006 2007 2008 2009 GDP per capita (KM) 4.457,005.010,005.664,006.429,006.244,00 GDP per capita (USD) 2.834,003.212,003.962,004.810,004.436,00 GDP per capita (EUR)2.278,832.561,572.895,963.287,103.192.51 Source: Central Bank of Bosnia and Herzegovina INDICATOR 2005 2006 2007 2008 2009 Real GDP (growth rate in percents)3,906,106,205,70-2,90 Retail prices growth rate (percent change) 3,806,101,507,40-0,40 Gross Official Reserves in millions of EURO 2.160,212.787,563.425,143.219,093.176,15 Source: Central Bank of Bosnia and Herzegovina

5. BUSINESS ENVIRONMENT IN B&H MARKET ADVANTAGES  Convertible, stable currency Convertible Mark pegged to EURO ( 1 KM = 0.51 €)  Lowest inflation in the Region CEFTA 2006 Free Trade Agreements FTA  Liberated market access to 130 mil. consumers through CEFTA 2006 (incorporates former Free Trade Agreements with CRO,SRB, MN, MAC, MOL, ALB) and the FTA with Turkey  Stabilization and Accession Agreement with EU  Preferential export regimes with: USA, CAN, RF, JAP, AUS  Efficient and arranged Banking System - growing confidence, increasing presence of international banks  Investment protection agreements and guarantees for political and economic risks (MIGA, IGA)  Skillful, experienced labour force, competitive labour costs

6. BUSINESS LEGISLATION FRAMEWORK IN B&H TAX SYSTEM VAT, January 1, 2006 - (single rate: 17%) Taxes on Profit, Salary, Property Excise duties Tax reductions: start-ups, FDI (more than 20% share - 5-year reduction proportionally to the share ratio), re-investment Tax exemptions: free zone users (5-year period), employment of disabled persons

7. BENEFITS FOR FREE ZONES’ USERS IN B&H  Existing infrastructure  Transportation benefits  Availability of qualified labor force  Foreigners can buy or rent facilities within FT Zone  Companies can be set up in the fields of production, commerce, services within FTZ  Duty free imports of equipment, raw materials, etc. to be used for production within FTZ  Goods produced or treated within FTZ can be sold in domestic market (import duties paid upon sale – delayed payment of duties)  FTZ Users exempted from taxes and contributions for 5 years, (except salary tax and contributions)

8. DEVELOPMENT STRATEGY OF B&H PROSPEROUS SECTORS  Metal Industries  Wood Industries  Energy  Food Production  Textile & Leather  Telecommunications  Tourism

9. PROSPEROUS SECTORS Wood industry Wood industry  Almost 300 million cubic meters of forest (53% of total B&H area) of which one third is deciduous (beach and oak)  Long tradition of exporting wood and wood products  Sector with long-term perspectives – quality management, design and marketing  Significant capacities for production of wide range of wood products (sawn wood, veneer, plywood, construction carpentry, parquet, furniture)  High existence of the Italian equipment and technology in this sector  Capacities for cellulose industry

10. Agriculture and Food Agriculture and Food  Over 1.5 million hectares of untainted agricultural land allowing production of organic food  Various climate conditions - Continental on the North and Mediterranean on the South (fruits and vegetable processing)  Herbs, forest fruits, wild mushrooms are harvested in large quantities  Fast developing of fish farming (trout, carp)  National herd of livestock as good base for meat and skin processing  Privatisation in tobacco growing and processing sector  Possibilities for investment in brewing industry  Water streams with high degree of purity (health spas), water bottling PROSPEROUS SECTORS

11. Textile industry Textile industry  Long tradition in clothing and footwear production  Good reputation as the former supplier to the German and Italian markets  Low labour cost  Inherited skills in spinning, weaving and knitting  Proximity to major world textile markets  Development of SME’s  No quotas for EU

12. PROSPEROUS SECTORS FOR FOREIGN INVESTMENTS Power Power  13 hydropower plants with installed capacity of 2,034 MW – capacities for many more (projects for building of up to 100 small power stations)  Exporter of energy to the SEE region and Western Europe  Power III project for reconnection and reintegration of Electric Power System of BH (enabling commercial trade with EU network)  Two refineries available for privatisation  Renewable Energy Resources – Wind, Solar etc.

13. PROSPEROUS SECTORS Metal processing and Automotive industry Metal processing and Automotive industry  Reserves of coal, iron and bauxite  Two important aluminum plants – the biggest zeolite producer in Europe; Aluminium Mostar is the largest exporter in B&H  Mechanical engineering sectors are appreciated by international standards  Abundance of metal processing facilities available through privatization process  There are possibilities related to the production of value-added products based on domestic raw materials  Automotive cluster of Bosnia and Herzegovina

14. PROSPEROUS SECTORS Tourism Tourism  Unexplored and untouched destination and possibilities within:  existing beauty and health spas  many winter sport resorts, Olympic sites and other unexplored mountains  adventure tourism such as rafting on the rivers Una, Neretva, Drina and Tara, paragliding, alpine and rock climbing, mountain biking, hunting, fishing  coastal tourism (Neum)  religious tourism – Medjugorje etc.  Possibility of participating to the privatisation process  Investment in the new facilities (Greenfield)

15. FOREIGN TRADE OF BOSNIA AND HERZEGOVINA, (2005 – 2010) 2005 2006 2007 2008 2009 2010 EXPORT 1.956.3632.695.0423.108.6963.500.9812.880.8323.729.269 IMPORT 5.665.0715.744.1106.966.4148.146.1926.151.9296.815.240 VOLUME 7.621.4348.439.15210.075.11011.647.1739.032.76210.544.508 BALANCE -3.708.708-3.049.069-3.857.718-4.645.210-3.271.097-3.085.971 Source: Indirect Taxation Authority of Bosnia and Herzegovina 000 Euros

16. FOREIGN TRADE OF BOSNIA AND HERZEGOVINA, (2005 – 2010) Source: Indirect Taxation Authority of Bosnia and Herzegovina

17. FOREIGN TRADE OF BOSNIA AND HERZEGOVINA, (2009 – 2010) 17COUNTRYEXPORTS 2009 EXPORTS 2010 GERMANY 417.672572.893 CROATIA 495.467558.489 SERBIA 393.713472.975 ITALY 360.425443.014 SLOVENIA 237.816315.877 AUSTRIA 167.279244.473 MONTENEGRO 127.979167.389 SWITZERLAND 58.29083.187 UNMIK 59.68281.309 HUNGARY 47.13964.947 TOP 10 2.365.4613.004.554 OTHERS 515.371724.715 TOTAL2.880.8323.729.269 COUNTRYIMPORTS 2009 IMPORTS 2010 CROATIA1.187.5391.282.232 SERBIA757.372831.996 SLOVENIA607.970657.660 GERMANY566.837611.751 ITALY530.624529.307 SWITZERLAND447.227.466.709 AUSTRIA389.400456.579 HUNGARY222.526246.611 GREAT BRITAIN 105.148186.292 TURKEY166.930172.539 TOP 10 4.981.5725.441.675 OTHERS1.170.3581.373.564 TOTAL6.151.9296.815.240 Source: Indirect Taxation Authority of Bosnia and Herzegovina 000 Euros

18. FOREIGN TRADE OF BOSNIA AND HERZEGOVINA BY SECTOR 18 SECTOR Exports 2009 Exports 2010 Imports 2009 Imports 2010 Agriculture and food processing238.264288.3261.209.8941.261.465 Mineral fuels387.896568.052963.5441.341.535 Chemical and pharmaceutical products231.176319.697901.215983.296 Building materials64.57354.108199.400192.280 Leather and fur377.403429.746540.714622.415 Wood, paper, furniture552.718665.645356.596367.922 Ores, metal products565.758857.207550.432630.740 Machinery, apparatus, boilers...437.878522.1631.351.6811.346.745 Others25.16724.32678.45268.840 TOTAL2.880.8323.729.269 6.151.929 6.815.239 000 Euros Source: Indirect Taxation Authority of Bosnia and Herzegovina

19. FOREIGN TRADE OF BOSNIA AND HERZEGOVINA BY SECTOR, 2010 19 Source: Indirect Taxation Authority of Bosnia and Herzegovina

20. BOSNIA AND HERZEGOVINA EXPORTS BY PRODUCT GROUP, 2010 20 000 Euros CUSTOM TARIFF PRODUCT GROUP EXPORTS 2010 27 MINERAL FUELS AND OILS568.052 94 FURNITURE; BEDDING341.884 84 ARTICLES OF ALUMINIUM304.922 44 MACHINERY, BOILERS,MECH, APPLIANCES257.595 76 IRON AND STEEL244.193 64 WOOD AND PRODUCTS THEREOF215.138 73 FOOTWEAR, GAITHERS210.332 72 ARTICLES OF IRON AND STEEL190.932 62 INORGANIC CHEMICALS158.600 28 ELECTRICAL MACHINERY AND EQUIPMENT122.739 85 PAPER AND PAPERBOARD96.594 48 ARTICLES OF APPAREL AND CLOTHING, NOT KNITED86.539 39 VEHICLES OTHER THAN RAILWAY OR TRAMWAY79.026 87 PLASTICS AND ARTICLES THEREOF64.083 61 RAW HIDES AND SKINS45.584 TOP 15 PRODUCT GROUPS 2.986.212 Others743.057 TOTAL BH EXPORTS 3.729.269

21. BOSNIA AND HERZEGOVINA IMPORTS BY PRODUCT GROUP, 2010 21 CUSTOM TARIFF PRODUCT GROUP IMPORTS 2010 27 MINERAL FUELS AND OILS1.341.535 84 MACHINERY, BOILERS, MECH. APPLIANCES520.519 8585 EL.MACHINERY AND EQUIPMENT379.450 87 VEHICLES OTHER THAN RAILWAY315.833 39 PLASTICS AND ARTICLES THEREOF295.659 72 IRON AND STEEL195.362 73 ARTICLES OF IRON OR STEEL168.311 22 BEVERAGES, SPIRITS AND VINEGAR148.074 30 PHARMACEUTICAL PRODUCTS145.823 48 PAPER AND PAPERBOARD138.815 41 RAW HIDES AND SKINS119.986 90 OPTICAL AND MEASUREMENT DEVICES118.347 64 FOOTWEAR, GAITERS...109.006 76 ALUMINIUM AND ARTICLES THEREOF100.329 21 MISCELLANEOUS EDIBLE PREPARATIONS99.995 TOP 15 PRODUCT GROUPS 4.197.045 Others2.618.195 TOTAL BH IMPORTS 6.815.239 000 Euros

22. FOREIGN TRADE BOSNIA AND HERZEGOVINA-REPUBLIC OF KOREA 22EUR 2006 2007 2008 2009 2010 Export23.77316.8798.8261.90697.974 Import5.726.80112.286.3173.914.6072.348.1032.182.268 Volume5.750.57412.303.1963.923.4332.350.0092.280.242 Balance-5.703.028-12.269.438-3.905.781-2.346.197-2.084.294 E/I RATIO % 0,42%0,14%0,23%0,084,49%

23. FOREIGN TRADE BOSNIA AND HERZEGOVINA - REPUBLIC OF KOREA EXPORT PRODUCTS, 2010 23 TariffProductsValue in EUR 9406Prefabricated buildings73.613,40 8421 Centrifuges, including centrifugal dryers; devices for filtering or purifying liquids13.279,89 8708 Parts and tools for motor vehicles 6.171,51 3301Esential oils (with or without terpenes)2.948,31 8471 Automatic data processing machines and its units, magnetic or optical readers, etc688,50 9504 Articles for funfair, table or parlor games, including pinball machines, billiards551,82 8522 Parts and accessories suitable for with the apparatus of headings 8519 to 8522363,12 4202Trunks, suitcases, vanity, attache cases etc355,47 Total export from B&H to Republic of Korea, 201097.972,0 2

24. FOREIGN TRADE BOSNIA AND HERZEGOVINA – REPUBLIC OF KOREA TOP 15 IMPORT PRODUCTS, 2010 TariffProductsValue in EUR 40Caoutchouc and caoutchouc products and rubber932.714,00 85 Electrical machinery, equipment and parts, sound recording or reproducing apparatus, TV apparatus, parts and accessories444.090,00 30Pharmaceutical products207.845,86 84 Nuclear reactors, boilers, machinery and mechanical appliances, parts thereof186.741,38 87Vehicles other than railway or tramway, and its parts and accessories116.442,23 82 Tools, tanners, spoons and forks made of base metal, parts made of base metal90.036,64 90 Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus, parts and accessories51.497,27 32 Tanning or dyeing extracts, tanini i njihovi derivati, dyes, pigments and other coloring matter, paints and varnishes, putty and other mastics44.027,38 72Iron and steel33.202,85 39Plastics and articles made of plastics29.241,98 68Articles of stone, plaster, cement, asbestos, mica or similar materials14555,87 33Essential oils and resinoids, cosmetics and toiletries7.721,66 95Toys, equipment for games and sports, and their parts and accessories5.218,62 67 Prepared feathers and down and articles made of feathers and down, artificial flowers, articles of human hair3.760,39 37Products for photographic purposes3.630,30 Top 15 imports products to Republic of Korea, 20102.170.726,41 Other products11.541,59 Total import from B&H to Republic of Korea, 20102.182.268,00

25. How to find information Government:  Council of Ministers of Bosnia and Herzegovina www.vijeceministara.gov.ba  Government of Federation of Bosnia and Herzegovina www.fbihvlada.gov.ba  Government of Republika Srpska www.vladars.net Banking & Insurance:  Central Bank of Bosnia and Herzegovina www.cbbh.ba Public procurement:  Agency for public procurement of Bosnia and Herzegovina www.javnenabavke.ba

26. How to find information Privatisation:  Agency for privatization of Federation of Bosnia and Herzegovina www.apf.com.ba  Agency for privatization of Republika Srpska www.rsprivatizacija.co Energy:  State Electricity Regulatory Commission www.derk.ba Company credibility reports – factoring:  Investment Guarantee Agency www.igabih.com Foreign investment:  Foreign Investment Promotion Agency www.fipa.gov.ba

27. How to find information Thank you for your attention ! FOREIGN TRADE CHAMBER OF BOSNIA AND HERZEGOVINA BOSNIA AND HERZEGOVINA EXPORT PROMOTION AGENCY Branislava Đurđeva 10, Sarajevo Tel.: (033) 566 222, 566 253, 566 230 Fax: (033) 214 292, 566 239 cis@komorabih.ba www.komorabih.ba www.bhepa.ba