[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]




 
                 U.S. ENGAGEMENT IN THE WESTERN BALKANS

=======================================================================

                                HEARING

                               BEFORE THE

       SUBCOMMITTEE ON EUROPE, ENERGY, THE ENVIRONMENT AND CYBER

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            October 28, 2021

                               __________

                           Serial No. 117-87

                               __________

        Printed for the use of the Committee on Foreign Affairs
        
        
        
        
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                      COMMITTEE ON FOREIGN AFFAIRS

                  GREGORY W. MEEKS, New York, Chairman

BRAD SHERMAN, California             MICHAEL T. McCAUL, Texas, Ranking 
ALBIO SIRES, New Jersey                  Member
GERALD E. CONNOLLY, Virginia         CHRISTOPHER H. SMITH, New Jersey
THEODORE E. DEUTCH, Florida          STEVE CHABOT, Ohio
KAREN BASS, California               SCOTT PERRY, Pennsylvania
WILLIAM R. KEATING, Massachusetts    DARRELL ISSA, California
DAVID CICILLINE, Rhode Island        ADAM KINZINGER, Illinois
AMI BERA, California                 LEE ZELDIN, New York
JOAQUIN CASTRO, Texas                ANN WAGNER, Missouri
DINA TITUS, Nevada                   BRIAN MAST, Florida
TED LIEU, California                 BRIAN FITZPATRICK, Pennsylvania
SUSAN WILD, Pennsylvania             KEN BUCK, Colorado
DEAN PHILLIPS, Minnesota             TIM BURCHETT, Tennessee
ILHAN OMAR, Minnesota                MARK GREEN, Tennessee
COLIN ALLRED, Texas                  ANDY BARR, Kentucky
ANDY LEVIN, Michigan                 GREG STEUBE, Florida
ABIGAIL SPANBERGER, Virginia         DAN MEUSER, Pennsylvania
CHRISSY HOULAHAN, Pennsylvania       AUGUST PFLUGER, Texas
TOM MALINOWSKI, New Jersey           PETER MEIJER, Michigan
ANDY KIM, New Jersey                 NICOLE MALLIOTAKIS, New York
SARA JACOBS, California              RONNY JACKSON, Texas
KATHY MANNING, North Carolina        YOUNG KIM, California
JIM COSTA, California                MARIA ELVIRA SALAZAR, Florida
JUAN VARGAS, California              JOE WILSON, South Carolina
VICENTE GONZALEZ, Texas
BRAD SCHNEIDER, Illinois

                                     
                                      

                    Jason Steinbaum, Staff Director

               Brendan Shields, Republican Staff Director
                                 ------                                

        Subcommittee on Europe, Energy,the Environment and Cyber

              WILLIAM R. KEATING, Massachusetts, Chairman

SUSAN WILD, Pennsylvania             BRIAN FITZPATRICK, 
ABIGAIL SPANBERGER, Virginia             Pennsylvania,Ranking Member
ALBIO SIRES, New Jersey                  ANN WAGNER, Missouri
THEODORE DEUTCH, Florida                 ADAM KINZINGER, Illinois,
DAVID CICILLINE, Rhode Island            BRIAN MAST, Florida
DINA TITUS, Nevada                       DAN MEUSER, Pennsylvania
DEAN PHILLIPS, Minnesota                 AUGUST PFLUGER, Texas
JIM COSTA, California                    NICOLE MALLIOTAKIS, New York
VICENTE GONZALEZ, Texas                  PETER MEIJER, Michigan
BRAD SCHNEIDER, Illinois

                                       

                      Leah Nodvin, Staff Director
                      
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Escobar, Gabriel. Assistant Deputy Secretary, Department of State     7

                                APPENDIX

Hearing Notice...................................................    24
Hearing Minutes..................................................    25
Hearing Attendance...............................................    26

            RESPONSES TO QUESTIONS SUBMITTED FOR THE RECORD

Responses to questions submitted for the record..................    27


                 U.S. ENGAGEMENT IN THE WESTERN BALKANS

                       Thursday, October 28, 2021

                          House of Representatives,
                Subcommittee on Europe, Energy, the
                             Environment and Cyber,
                      Committee on Foreign Affairs,
                                                    Washington, DC.

    The subcommittee met, pursuant to notice, at 11:31 a.m., 
via Webex, Hon. William R. Keating (chairman of the 
subcommittee) presiding.
    Mr. Keating. The House Foreign Affairs Subcommittee will 
come to order without objection. The Chair is authorized to 
declare a recess of the Committee at any point, and all members 
will have 5 days to submit statements, extraneous material, and 
questions for the record, subject to the length limitation in 
the rules. To insert something into the record, please have 
your staff email the previously mentioned address or contact 
full committee staff.
    Please keep your video function on at all times, even when 
you're not recognized by the Chair. Members are responsible for 
muting and unmuting themselves, and please remember to mute 
yourself after you finish speaking. Consistent with House 
Resolution 965 and the accompanied regulations, staff will only 
mute members and witnesses, as appropriate, when they're not 
under recognition to eliminate background noise.
    I see that we have a quorum. And before I begin my opening 
statement, I will just thank everyone, first thank our witness, 
Deputy Assistant Secretary Escobar, for arranging the change in 
your schedule. I want to thank the members that are present for 
their ability to change their schedule around to accommodate 
this. It's an unusual day here at Capitol Hill. It's a day that 
the President has addressed the Democratic Caucus on 
legislation. It's a day that we all are scrambling and changing 
our schedules, and it's a day, I think, that is appropriate for 
today's subject matter because we're talking about democracy, 
often messy, often unscripted, often a case where, at least in 
our country, there's no rule by decree. A president just cannot 
come down and tell the country and all the people what's going 
to be done. He has to come to a representative House in this 
democracy to do that, and each of us have the ability to 
represent our districts in dealing with those decisions. So I 
think it's an appropriate day for this because our very 
democracy is something that the stakes are very high in in the 
Western Balkans.
    So I'll now begin my opening remarks. The Western Balkans 
are a complex, dynamic, geostrategic region in Europe. As a 
result of the changing boundaries from historic empires, the 
Western Balkans remains incredibly multiethnic, as well as 
religiously, geographically, linguistically, and culturally 
diverse. This region has also experienced a horrific amount of 
violence in its modern history.
    At the same time, the Western Balkans have worked hard to 
establish democracy and foster the political process necessary 
to speed integration into the European Union. Due to these 
efforts, three of the Western Balkan nations, Albania, 
Montenegro, and North Macedonia, have successfully joined NATO. 
U.S. leadership and engagement, often in coordination with the 
efforts undertaken by the European Union and NATO, has been 
essential to the region's peace and stability. The U.S. has 
facilitated in support of the Western Balkans moving down a 
pro-Western path based on market liberalization, promotion of 
human rights, anti-corruption, and freedom of speech. The U.S. 
and this Congress continues to remain staunch advocates of 
progress through our mediation and democratic development 
initiatives in the region.
    So today we're holding this hearing, a day in the midst of 
months of profound change and uncertainty in the Western 
Balkans. It's now more clear than ever that there's still more 
work to be done. To that end, I echo Secretary of State Blinken 
and EU High Representative Borrell's recent joint statement, a 
statement supporting the accension of Western Balkan countries 
to the European Union and consider this issue a top priority of 
the region.
    North Macedonia made significant concessions during the 
Prespa Agreement; and Albania, whose accension is paired with 
North Macedonia, says some of the highest pro-EU sentiment 
amongst its population in the entire region. Delayed accension 
to the process for these countries and the rest of the region 
has allowed malign actors to increase their influence and sow 
discord and distrust amongst Western Balkan populations.
    I call on the EU to expedite the accession process for 
countries who meet the appropriate conditions and to work with 
Bulgaria to ensure North Macedonia and Albania's accension 
talks can begin by the end of the year.
    At the same time, Freedom House, in 2021, ranked all six 
Western Balkan countries as partly free, citing flawed 
electrical processes, a narrowing space for press freedoms, as 
well as a lack of consistent rule of law throughout the region. 
Further, non-normalization relations between nations continue 
to spur instability throughout the entire region. To meet these 
challenges in Bosnia and Herzegovina, I believe further reform, 
the accession of destabilizing rhetoric, the productive dialog 
between populations and ethnic groups to ultimately maintain 
peace, foster reconciliation and respect for democratic norms 
are all imperative. Separatist rhetoric and illegal legislation 
in the Republika Srpska only further destabilizes a country 
with deep societal divisions.
    In addition, while a temporary EU-mediated deal was struck 
to ease a recent escalation in tensions between Kosovo and 
Serbia, the lack of normalized relations between the two 
countries continue to hinder the stability of the entire 
region. A permanent solution through the EU-led dialog must be 
achieved, and I look forward to hearing from our witness about 
how the U.S. is helping to facilitate such an agreement.
    Yet, despite those ongoing conflicts and delayed 
negotiation processes, there are promising issues in the 
region. I continue to support interregional economic 
cooperation and believe that expanded trade throughout the 
Western Balkans will only support peace and democratic 
development.
    Furthermore, renewed U.S.-European cooperation needs 
greater cooperation from the NATO point. Finally, the use of 
sanctions by this Administration, including recent changes to 
the Western Balkans sanction program in June 21 is a 
necessary move to stifle the influence of corrupt local actors 
who seek personal gain over democratic processes and to those 
who seek to destabilize regional peace agreements. I call upon 
the Administration to consider the use of sanctions, when 
appropriate.
    To elaborate on the U.S. policy and engagement in Western 
Balkans, we have invited Deputy Assistant Secretary Gabriel 
Escobar from the Department of State to provide testimony 
before the subcommittee today. This is the first House Foreign 
Affairs Committee hearing on the Western Balkans in this 
congress, and Mr. Escobar's testimony is essential to better 
understand the Biden Administration's approach to the region as 
a whole.
    Ultimately, the Western Balkans remain a region with 
significant potential. Despite changing American leadership, 
Congress's commitment to finding long-term solutions in the 
region and maintaining our engagements and partnerships from 
Skopje to Podgorica, from Pristina to Sarajevo. We must 
continue to be engaged, and this region must remain strong. The 
coming weeks and months will be telling, and I look forward to 
hearing from Mr. Escobar as to how we, in Congress, can be 
helpful in achieving those long-term solutions that have, up 
until now, remained too elusive.
    I now turn to Ranking Member Mr. Fitzpatrick for his 
opening remarks.
    Mr. Fitzpatrick. Morning. Thank you, Chairman Keating and 
thank you to our guest, Deputy Assistant Secretary Escobar, for 
being here with us today to discuss U.S. engagement in the 
Western Balkans.
    Over the last three decades, the United States has actively 
engaged in promoting peace, democracy, and the rule of law 
across the region. The U.S. and NATO air campaigns altered the 
violence against the Kosovo-Albanian population by Milosevic's 
regime, and NATO has since maintained security presence in the 
country to ease tensions. The U.S. also led a NATO mission to 
help end the Bosnian War and brokered the Dayton Peace 
Agreement that stands to this day.
    Building on this legacy, the U.S. commitment to supporting 
regional cooperation, peace processes, resistance to 
polarization, bring corruption to light, and building trust in 
democratic institutions in the Western Balkans must remain 
steadfast. I am particularly concerned about governance 
challenges in Bosnia that have the potential to undermine the 
Dayton Agreement, and I am glad to see this Administration 
directs focus on this issue, including efforts from our witness 
today and Matt Palmer, who has been appointed special envoy for 
election reforms in Bosnia.
    I look forward to hearing about this Administration's plans 
on how its proposed electoral reforms will bring Bosnia's 
political system in line with European court rulings and the 
requirements of European integration. The promise of EU 
membership remains the key to unlocking long-sought reforms 
across the region.
    Opening accession talks with North Macedonia and Albania 
will provide much needed hope to people in the region and 
demonstrate that the West is fully supportive of their Euro-
Atlantic trajectory, and failure to push forward with Euro-
Atlantic integration will leave the Western Balkans more 
vulnerable to the autocrats in Moscow and Beijing.
    Russia's campaign against the Western Balkans follows a 
familiar playbook of sowing chaos, exploiting corruption and 
patronage networks, and weaponizing energy. Montenegro provides 
a stark example. In 2016, Russia supported two attempts against 
pro-Western government for seeking to join the NATO alliance. 
Likewise, China has exploited the vacuum left in the Western 
Balkans by the stalled progress toward Euro-Atlantic 
integration through massive investments in infrastructure. The 
Belt and Road Initiative is China's Trojan Horse, and the 
Western Balkans has burdened nations with unimaginable debt and 
deep in the corruption and patronage networks that have plagued 
the region for years.
    It is my hope today that Deputy Assistant Secretary Escobar 
can discuss how the United States can continue to support 
peace, stability, democracy, and the rule of law in the Western 
Balkans. Moreover, I hope we can learn more about how the U.S. 
and Europe are working to build the region's resilience against 
Russian and PRC malign influence. We must remain vigilant in 
our efforts to deter authoritarian nations from destabilizing 
the region's Euro-Atlantic integration, and it is in the 
interest of both the United States and Europe and what the 
people of the Balkans really want.
    With that, Mr. Chairman, I yield back.
    Mr. Keating. I thank the ranking member for his comments. 
And I'll now introduce our witness. I want to thank you for 
being here today, Deputy Assistant Escobar. Mr. Gabriel Escobar 
is the Deputy Assistant Secretary responsible for the Western 
Balkans at the U.S. Department of State. He also oversees the 
Office of Press and Public Diplomacy. Mr. Escobar has held a 
variety of leadership positions at the State Department, 
including Deputy Chief of Mission at the U.S. Embassy-Belgrade 
and Economic Minister Counselor at the U.S. Embassy-Baghdad. He 
is also the brother of one of our colleagues, Representative 
Escobar, and we welcome you here today. I now will recognize 
you for 5 minutes, giving you great flexibility if you'd like 
to exceed that without objection, to read your prepared 
statement and to be made part of the record. Mr. Escobar, 
you're now recognized for your opening statement.

   STATEMENT OF GABRIEL ESCOBAR, ASSISTANT DEPUTY SECRETARY, 
                      DEPARTMENT OF STATE

    Mr. Escobar. Chairman Keating, Ranking Member Fitzpatrick, 
distinguished Members of the Subcommittee, thank you for 
inviting me to discuss U.S. engagement in the Western Balkans. 
For over three decades, the region has been the focus of 
sustained U.S. attention and investment, and the Biden 
Administration shares this commitment to a region that is 
historically, politically, culturally, and geographically part 
of Europe. Our goal for all six countries of the region is to 
support their successful integration into European institutions 
and eventual accession to the EU. We are working with our EU 
partners to reinforce the message that accession remains a real 
possibility within a realistic timeframe, an incentive critical 
to the aspirants' continued political will to implement 
difficult reforms and bolster resistance to harmful Russian and 
Chinese influence and activities on Europe's doorstep.
    The strongest message the EU could give now is to schedule 
the start of North Macedonia and Albania's EU accession 
negotiations before the end of this calendar year. Both 
countries did the difficult work required. Delays since the 
European Council's March 2020 decision to begin that process 
are sowing doubt throughout the region and risk dashing the 
hopes of a new generation that wants a European future. That is 
why Secretary Blinken and EU High Representative Josep Borrell 
on October 14 released a public statement jointly reinforcing 
that EU accession is the only way forward for the region.
    Peace, stability, and prosperity through EU integration is 
our shared goal, and we are working together toward that 
objective, including by supporting the EU-facilitated Dialogue 
as the best path to normalizing relations between Serbia and 
Kosovo. And that is why I traveled to Brussels last month to 
back EU Special Representative Miroslav Lajcak in efforts to 
press both sides to de-escalate tensions over vehicle 
registration and to secure agreement on a solution that created 
space for them to focus on more complicated issues. Together we 
made clear that the Dialogue is the forum in which both sides, 
as equals, must work to resolve their differences and normalize 
relations, ideally through mutual recognition.
    A vibrant political process yielded significant change in 
Montenegro in August 2020. We have made clear that our 
partnership with Montenegro is a partnership with the country, 
its people, and their democratic institutions, rather than any 
one political party. We are prepared to work with all 
Montenegrin partners that share the vision of a sovereign, 
inclusive, democratic country that is advancing necessary 
reforms as an EU aspirant while upholding its solemn pledges as 
a stalwart NATO Ally. This can be furthered through inclusive 
dialog, including with civil society, focused on goals that 
unite Montenegrins: peace, democratic progress, economic 
development, rather than on identity politics and nationalist 
rhetoric that divides them.
    In Bosnia and Herzegovina, the U.S. remains critical to 
preserving the country's sovereignty, territorial integrity, 
and the gains of the last 26 years under the Dayton Peace 
Agreement. We are now working with the EU and others to press 
for reforms to secure Bosnia's place in the Euro-Atlantic 
community. Bosnia's clear path from Dayton to Brussels leads 
through continued reform, including step-by-step electoral, 
rule of law, and economic reforms that will benefit all its 
citizens. We and the EU are pressing for these changes; the 
Office of the High Representative and EUFOR's Operation ALTHEA 
are indispensable in these efforts. Recent threats to State-
level institutions by Milorad Dodik are dangerous and threaten 
to undermine Dayton and the European choice and perspective of 
all Bosnian and Herzegovina citizens. We are vigorously 
engaging with local actors and our partners to push back on any 
moves that threaten a return to Bosnia's troubled past, rather 
than securing its brighter future.
    Thanks to generous bipartisan support from Congress, U.S. 
assistance reflects our standing commitment to the Western 
Balkans. The United States has provided over $2.4 billion in 
assistance to the region in the past decade. In Fiscal Year 
alone, over $145 million is helping advance the region on its 
European path and building resilience to negative external 
influences. Moscow and Beijing are actively opposed to the 
region's Western integration, deploying disinformation and 
exploiting vulnerabilities to divert the countries of the 
Western Balkans from their democratically chosen paths while 
gaining an economic and political foothold in Europe. Russia 
weaponizes its energy supply to coerce politicians, foster 
corruption, and stunt growth potential. The People's Republic 
of China is also working to expand its influence in critical 
infrastructure and through economic coercion. We cannot let 
them succeed.
    The Western Balkans is economically dynamic and full of 
promise, with its eyes firmly set on joining Europe's single 
market. Working together, these countries can resolve political 
challenges and accelerate changes to raise living standards, 
stem brain drain, and secure the foundation for long-term 
prosperity. We are committed to helping them secure this 
integration and to prioritize sustainable investments in 
quality infrastructure and clean energy, transitioning away 
from coal and driving regional energy connections. Initiatives 
like the Common Regional Market, Open Balkans initiatives, and 
Green Agenda show regional economic integration and cooperation 
are possible, beneficial, and indispensable for sustained 
growth.
    In closing, allow me to underscore that the Biden 
Administration has redoubled the U.S. commitment to work with 
Allies and partners to help the Western Balkans advance the 
European paths. I look forward to working with Congress and 
welcome your questions.
    [The prepared statement of Mr. Escobar follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
    
    Mr. Keating. Thank you for your testimony. I'll now 
recognize members for 5 minutes each, pursuant to House rules. 
All time yielded is for the purposes of questioning our 
witness. Because of the virtual format of this hearing, I'll 
recognize members by Committee seniority, alternating between 
Democratic and Republican members. If you miss your turn, 
please let our staff know and we will circle back to you. If 
you seek recognition, you must unmute your microphone and 
address the Chair verbally.
    I will now start by recognizing myself for 5 minutes. I 
just want to begin with a very pointed question that I think is 
practical and essentially, at least as a starting point, 
because accession of the Western Balkans countries to the 
European Union is essential. It's essential for U.S. foreign 
policy and for European Union policy at large. This was, as you 
mentioned, reaffirmed by the recent joint statement by 
Secretary Blinken and EU High Representative Borrell. Yet, at a 
recent EU summit on the Western Balkans, the EU was unable to 
set a concrete time line for the accession of any Western 
Balkans countries, and there continues to be sticking points on 
the part of both of the expiring members in the European Union 
itself.
    Now, despite significant concessions by North Macedonia in 
their prior dispute with Greece that was resolved with the 
Prespa Agreement, the initiative of North Macedonia's accension 
talks remains stalled, and it remains stalled over a language 
dispute with Bulgaria. As a result of Albania's accession talks 
being tied to this, neither of the two countries can proceed 
forward. Albania not only has strong public support for EU 
membership but also has been a staunch NATO ally.
    So my question is what steps specifically can the Biden 
Administration take and how can they work with the Bulgarians 
after their upcoming election in November to facilitate and end 
this agreement, and can Congress at all be helpful in this 
effort?
    Mr. Escobar. Well, Mr. Chairman, thank you for that 
question. The answer is that we're working with all parties. 
We're working with the governments of North Macedonia and the 
governments of Bulgaria to find a positive win-win solution. 
We're also working with our EU partners who agree with us that 
this dispute has to be resolved in a relatively short period of 
time.
    We are all in agreement that it is in our strategic 
interest, in America's strategic interest and Europe's 
strategic interest, to bring both North Macedonia and Albania 
into the European Union, and we hope to have this resolved in 
time for both Albania and North Macedonia to begin negotiations 
this calendar year.
    Mr. Keating. You mentioned, too, in your testimony about, 
quote-unquote, the sowing of doubt in the region. So what would 
be the effects of continued delay in this area? What are you 
most concerned with?
    Mr. Escobar. I'm most concerned about the next generation 
of the Western Balkans being disillusioned that their country 
is well into the European Union within a reasonable time 
period. I'm also concerned that this inability to resolve it 
could open the door for malign external influences, like China 
and Russia.
    Mr. Keating. You mentioned China, and I suspect we'll have 
questions that will be asked in more detail coming forward. But 
we also look to Russia in this region, but China is indeed very 
active. Can you describe some of their activities and the 
concerns the Administration has about China's activities in the 
region?
    Mr. Escobar. Our main concern with China initially is their 
economic influence in the region. So China has been one of the 
leaders in the region advancing non-transparent energy deals, 
non-transparent infrastructure deals, and there's a level of 
political influence that comes with that and eventually 
political coercion. So it's our hope that we can empower our 
private sector partners to be able to counter China effectively 
by working with governments, including with our EU partners, to 
create the opportunities for transparency and a fair playing 
field for all of our companies. And if we have a fair playing 
field, we're confident that we can compete, we can out-compete 
China in the region.
    Mr. Keating. Well, thank you. These will be issues that I 
think we'll have members that are going to pursue with their 
questioning. If not, they'll also get a second chance in the 
second round through writing.
    With that, I'm going to yield to Representative Wagner of 
Missouri for 5 minutes.
    Mrs. Wagner. I thank you, Chairman Keating, for organizing 
this important hearing, and I want to thank Deputy Assistant 
Secretary Escobar for his expertise and certainly for his 
service.
    Among the most urgent priorities the United States must 
pursue in Europe is the promotion of peace, prosperity, and 
Western integration in the Balkans. Today, deepening divisions 
in Bosnia, fueled by the reckless succession threats of Bosnian 
Serb politicians, like Milorad Dodik, pose perhaps the greatest 
threat to Balkan stability. It worries me tremendously to see 
Bosnian Serb nationalists, in coordination with the ruthless 
Putin regime, working to roll back the progress Bosnia has made 
in the last several years.
    I represent the largest Bosnian community outside of 
Bosnia, and many of my constituents fled to St. Louis during 
1992--1995 Bosnian War in which more than 100,000 lost their 
lives. A majority of those killed were Muslim-majority 
Bosniaks. I cannot imagine the heartache my constituents must 
feel when Dodik denies the horrifying genocide committed by 
Serb troops against Bosniak Muslims at Srebrenica or when he 
threatens to leave the dissolution of Bosnia. These actions are 
offensive to those who lost loved ones in the Bosnian War, and 
they are profoundly dangerous to Bosnia's future as a unified 
multiethnic State. It is imperative that the United States 
protect Bosnian sovereignty and territorial integrity as the 
country navigates these challenges.
    Deputy Assistant Secretary Escobar, a leaked cable written 
by special envoy for the Western Balkans, Matthew Palmer, has 
been criticized by some Bosniak analysts as outlining a 
dangerous policy in respect to electoral reform in Bosnia. They 
suggest Mr. Palmer is working too closely with the nationalist 
forces who are aiming to further ethnicize the electoral law. 
What is the Biden Administration's plans to address these 
concerns, sir?
    Mr. Escobar. Well, thank you for that question, 
Congresswoman. And I want to say to begin with that I know many 
of the communities that have resettled in your district, they 
are very, very loyal and patriotic Americans and I welcome 
their support in everything that we do in the Balkans.
    With regard to Bosnia and Herzegovina, the Dayton Peace 
Agreement is the basis of our policy there. That agreement has 
managed to keep the peace for over 25 years, and that agreement 
reinforces the independence, sovereignty, and territorial 
integrity of Bosnia and Herzegovina. And we see Bosnia and 
Herzegovina as succeeding only as a multiethnic-inclusive and 
democratic country.
    I agree with you that efforts to unilaterally withdraw by 
any entity, to unilaterally withdraw from central institutions 
is dangerous and reckless. We're working with our European 
partners, with NATO, with the EUFOR, and with the Office of the 
High Representative to ensure that none of this comes to pass. 
I personally will be traveling to the region in November to 
reinforce that message. The counselor to the Secretary of State 
will follow shortly afterwards. But in the meantime, we have 
several people who are engaged on this on a day-to-day basis, 
including four full-time senior foreign service officers in-
country at any given time.
    And I do want to emphasize that Matthew Palmer, who is 
staying on to be the representative, the person who is being 
sent by the Secretary to explore electoral reforms, the leaked 
cable actually was a briefing paper that we gave widely to the 
international community to consider some points about important 
reforms that could be made, not to further ethnicize the 
country but to create greater inclusion for the country and to 
allow the country to move the electoral process from one that 
creates obstacles and obstruction to one that allows Bosnia and 
Herzegovina to achieve greater political consensus and move 
forward in its European aspirations.
    Mrs. Wagner. Well, Dodik and his Serb and Russian allies 
are seeking the end of the Office of the High Representative, 
an independent body caste with ensuring implementation of the 
peace agreement. They have called for the succession of the 
Serb majority, Srpska I should say, and boycotted by 
institutions and set up governing bodies to support those of 
the central government.
    Deputy Assistant Secretary Escobar, Dodik is under U.S. 
sanctions for obstructing the Dayton Agreement. Why has the EU 
not sanctioned him, as well; and is the United States pushing 
the EU to hold Dodik accountable? And I'm out of time, so I'd 
ask you for an expedited answer, please.
    Mr. Escobar. Yes. Yes, we are working with Europeans to 
make sure that there are consequences to any illegal or any 
destabilizing action, and I look forward to briefing you again 
after my return from Bosnia.
    Mrs. Wagner. Well, I appreciate that very, very much, and 
I'm sure the Committee and the Chairman and certainly our staff 
would welcome a briefing. And certainly my Bosnian community in 
St. Louis would be grateful, and I'm glad that you're going.
    I thank you, Mr. Chairman, for your indulgence, and I yield 
back.
    Mr. Keating. Thank you, Representative. And we will indeed 
look forward to hearing from you on your return. Thank you for 
taking the time to be on the ground and your personal 
involvement in this. That's so important. And as a result of 
those experiences, we would ask you to join the Committee in a 
briefing going forward when you return on what you've seen on 
the ground.
    With that, I'm going to recognize for questions for 5 
minutes Representative Wild from Pennsylvania.
    Ms. Wild. Thank you, Mr. Chairman, and welcome, Mr. 
Escobar. I'm happy to meet you. Your sister is one of my 
favorite colleagues, I have to say. I do not mean to pander, 
but she is. So I'm happy to meet you.
    To the point, around 400,000 Bosnians or about 12 percent 
of the population cannot run for parliament or the presidency 
because of their religion, ethnicity, or where they live. This 
includes Jews, Roma, and other minority groups not considered 
among the three constituent peoples identified in the 
constitution. And because of these provisions, the European 
Court of Human Rights ruled in 2009 that the Bosnian 
constitution violated the European Convention on Human Rights. 
Despite this ruling, the constitution has not changed. In its 
opinion on Bosnia's and Herzegovina's application for 
membership to the EU, the European Commission specifically 
cited this case and stated significant incremental reforms are, 
therefore, needed to ensure that all systems can effectively 
exercise their political rights in order to accept the country 
into the EU.
    How can the Administration work more effectively with our 
European counterparts to encourage these reforms?
    Mr. Escobar. Thank you for that question. In fact, you are 
correct, and that is the goal of the limited electoral reform 
that Matt Palmer is working on is to make the electoral law 
compliant with that ruling. We agree with the ruling, and we do 
agree that Bosnia and Herzegovina have to make all the reforms, 
including the limited constitutional reforms necessary to make 
it compliant with the European Union's requirements.
    Additionally, this is not the only obstacle to Bosnia's and 
Herzegovina's EU aspirations. There are significant questions 
on rule of law and other issues, and we are working very 
closely with our European partners in making sure that they can 
meet those requirements. That is the basis of the Office of the 
High Representative's 5+2 Agenda, and, as we work through them, 
hopefully with a sense of urgency, we expect Bosnia will accept 
those recommendations for reform.
    Ms. Wild. Thank you. And switching gears, in October 2020, 
Albania hosted the first ever Balkans Forum Against Anti-
Semitism to combat anti-Jewish prejudice in the region. The 
Albanian prime minister called anti-Semitism a threat against 
our own civilization. How can we in the United States 
incentivize more allies and partners in the region to take 
concrete steps against the rising threats of anti-Semitism, 
racism, and ethnonationalist violence?
    Mr. Escobar. Well, thank you. I agree with you. We need to 
take important steps to address this. The Department has a 
Special Envoy for Holocaust Issues and anti-Semitism, and that 
envoy makes regular visits to the region, to all of Europe, to 
encourage countries to appoint people to similar positions. But 
at the same time we make it a regular part of our engagement 
with governments in the region, including with Serbia, Bosnia, 
Herzegovina, and Croatia and Albania, among others. So we hope 
that we have at least raised the awareness and raised our 
concerns to the government, and I would say that those 
discussions have yielded significant progress in the cases 
where I have personally been involved.
    Ms. Wild. So let me ask you, I know that the region may be 
susceptible to anti-Semitism precisely because of its history 
of interethnic prejudice and violence, but do you see 
opportunities to display this tragic history and the progress 
that has been made as a case study for why we need to combat 
these trends, not just in the Balkans but also in Europe more 
broadly and around the world?
    Mr. Escobar. I do. I definitely do think there's 
opportunities for that. And based on my interactions with 
regional leaders, I would say that that dialog would be a 
welcome one.
    Ms. Wild. Thank you very much. I yield back, Mr. Chairman.
    Mr. Keating. Important questions. And I now recognize 
Representative Mast from Florida for 5 minutes. I see that 
Representative Mast isn't on the screen at the moment, so I'll 
recognize Representative Meuser from Pennsylvania for 5 
minutes.
    Mr. Meuser. Thank you, Mr. Chairman. Thank you to the 
ranking member. I appreciate you putting all this together. 
Secretary Escobar, thank you very much.
    There are concerning reports about the Serbian Co-President 
Dodik's activities undermine and dismantle Bosnia's central 
government. After calling for the succession of the Republika 
Srpska for many years, Dodik is now setting up separate Serb 
governing bodies and vowing to create his own Bosnian Serb 
army. He most recently created a separate drug enforcement 
agency, which many say is a preview to separate law enforcement 
and other key governmental agencies. He's doing all this with 
the apparent support of the Russian government that seeks to 
destabilize Bosnia's central government.
    So, Secretary Escobar, how is the U.S. countering Dodik's 
efforts to undermine the Bosnian central government?
    Mr. Escobar. Well, I agree with you that these moves to 
withdraw from the central institutions are both illegal and 
destabilizing. So we have called on leaders across the spectrum 
in Bosnia and Herzegovina not to match him in his rhetoric and 
not to escalate the situation.
    So I personally have made a series of phone calls to 
leaders. I will be traveling to the region later this month. 
We've worked with our European partners to do the same. We have 
made joint statements in support of Bosnia's territorial 
integrity, and we will continue to support the continued 
international presence in Bosnia and Herzegovina, including 
support for the Office of the High Representative and support 
for EUFOR's ALTHEA mission. But beyond that, we have other 
tools, including sanctions, that we are prepared to use in 
order to limit any further challenges to Bosnia's territorial 
integrity.
    Mr. Meuser. Thanks for that answer. Yes, I did have the 
occasion to speak with a foreign minister recently, very, very 
concerned about matters. And certainly your long history there, 
knowing the ground, knowing the field, I'm sure will be 
enormously helpful because it seems like a very, very 
precarious situation.
    Mr. Escobar. Congressman, with very, very few exceptions, 
Dodik has very little support for what he's doing, including 
very little public support, and I want to capitalize on that.
    Mr. Meuser. Yes. All right. That's excellent to hear. OK. 
So Russia has cultivated dependence and exerting their type of 
influence, which is usually malign. It's exacerbating discord 
in Bosnia, derailing Balkans countries, NATO bids--that's 
something that, of course, is of great interest to many--and be 
using Serbia as a regional intelligence hub; and, yet, the 
region depends very much on Russian natural gas.
    So what are you and the Biden Administration working to 
counter Russia's malign influence in the region and perhaps 
decrease their dependence on Russian energy?
    Mr. Escobar. Well, we have been working with governments in 
the region to create regional energy connections that will 
involve LNG terminals throughout the region. We're working very 
closely with various governments to increase their capacity for 
renewable energy. And from a political perspective, we work 
very closely with them to help them identify this malign 
influence and counter it. So I am pleased to report that 
several countries in the region have already entered into 
legally binding contractual obligations to diversify from 
Russian natural gas in the near future.
    Mr. Meuser. Well, that sounds encouraging. Terrific. Now, 
just on to China. Various conversations I've had with citizens 
of Bosnia real concerned about the investments being made from 
China and the leverage being used. The State Department, I'm 
sure, recognize this and working to provide an alternative to 
China's very often coercive form of diplomacy in the Balkans?
    Mr. Escobar. Yes. So I'll start with the very beginning. 
You know, the economic seduction of China in the region is 
illusory. China does not care about environmental concerns, 
labor rights, or transparency. But more and more, as these 
countries close chapters to join the European Union, they have 
to care about those issues. And as they care about those 
issues, they see more and more that Western companies are the 
answer to their infrastructure development, not China.
    So we'll continue that pressure. But as we do so, we're 
working very closely with our private sector partners to 
identify the advantages of American and European investment in 
the region.
    Mr. Meuser. Thank you for your strong answers, and I yield 
back, Mr. Chairman.
    Mr. Keating. Thank you, Representative. The Chair now 
recognizes Representative Titus from Nevada for 5 minutes.
    Ms. Titus. Thank you, Mr. Chairman. Just a followup of the 
previous question. You mentioned some of the countries are 
joining in agreements on natural gas. I know there's one that's 
set to start in July 2022 that involves Greece and Azerbaijan 
and Bulgaria, IGB I think. That seems to be on track, but it 
could supply natural gas to other countries, as well. Do you 
see any movement in that direction, or what could we do to help 
to expand that?
    Mr. Escobar. Well, thank you for that question. And, yes, 
your engagement is always welcome. I would say that that is not 
the only initiative underway to diversify the energy supply in 
the Western Balkans. The liquid natural gas terminal in Krk, 
Croatia, is already supplying half of Croatia's gas needs and 
could be set to expand to other countries soon.
    There are other initiatives, including an LNG terminal in 
Greece that is looking to expand northward and could be and 
will effectively challenge Russia's stranglehold on the region 
in the southern part of the Western Balkans on gas. And beyond 
that, we are looking with our private sector partners to 
develop wind farms, hydropower, and solar fields to help reduce 
their dependence on Russian natural gas.
    Ms. Titus. That's good, that's good news. You know, 
speaking of Russia, talk about their influence, we also know 
that they are meddling in elections there, not just in the U.S. 
against Hillary Clinton. But we saw Russian interference in the 
election with North Macedonia's name change to try to slow down 
that process of Macedonia joining the EU. They weren't 
successful, but they are certainly there. Do you see evidence 
of that sort of thing anywhere else?
    Mr. Escobar. We do. Russia has a very substantial 
disinformation and propaganda network, and it operates very, 
very actively in the Western Balkans. We are working very 
closely with our EU partners, with NATO, to help them identify 
those threats to their electoral space, to their media space. 
And there is a significant Department of State effort to 
provide them with greater resiliency to their nets and to their 
media space through anti-corruption drives, through our Bureau 
of International Narcotics and Law Enforcement, through USAID, 
and, again, through our partnership with NATO.
    Ms. Titus. You know, the President expanded or continued 
the sanctions that had been opposed earlier there in the 
Balkans. I think they were put in place as far back as 2001. 
Has there been any assessment if these sanctions are really 
working? That always seems to be our go-to position, impose 
sanctions. We know they really haven't worked in Russia. Are 
they working in the Balkans? Have you looked at that? Should we 
try something else?
    Mr. Escobar. Well, I would say the sanctions are an 
important tool to have. They're not the sole answer to the 
democratic challenges that the region faces, but they are 
important for us. And I would say that, yes, that sanctions do 
have an important effect because they are almost always 
targeted at individuals and not at governments.
    So we've had tremendous success in altering the behavior of 
certain people, and I can attest to the fact that in the late 
90's the sanctions and the threat of sanctions were an 
effective tool in helping us get rid of Milosevic.
    Ms. Titus. You know, speaking of individuals and bad 
behavior, some of the atrocity crimes from the previous war are 
still being discussed. They're still very tender areas, 
especially those who used rape as a tool of war. Where are we 
in terms of trying to settle those issues so we can be more 
effective in moving the countries forward?
    Mr. Escobar. Well, we were very effective in arresting 
nearly everybody who was on the list of indicted war criminals 
put out by the International Criminal Tribunal for the 
Yugoslavia. I think all of them ended up at some point facing 
justice.
    We also have a residual mechanism that all of the countries 
of the region have signed on to that requires them to prosecute 
domestically anybody who has been accused of war crimes, and we 
continue to work with that residual mechanism in Bosnia, in 
Serbia, and Kosovo to make sure that those people do not evade 
justice.
    Ms. Titus. Thank you. Well, thank you, Mr. Chairman.
    Mr. Keating. The Chair now recognizes Representative Tenney 
from New York for 5 minutes.
    Ms. Tenney. Thank you, Chairman Keating and Ranking Member. 
And thank you to our witness today. Really interested in this 
region of the world since I served as the only American 
employed by the former Yugoslav Consulate during the 80's and 
also during the Olympics in Sarajevo. So I spent a lot of time 
and a lot of years traveling to this region of the world, and 
this is a really timely meeting. So, again, I thank the 
Chairman for doing this, and we're seeing, you know, real 
strategic competition dramatically in the Western Balkans 
becoming a place with renewed geopolitical focus for Russia, as 
well as China. And right now I think we need to continue our 
efforts in the Western Balkans in order to counter this Russian 
influence and bring greater stability to the region in the 
Balkans, especially the scale and depth of the U.S.-European 
cooperation demonstrates the ways in which the Transatlantic 
relationship helps address real issues and build stronger and 
long-term bulwarks against this Chinese and Russian influence, 
which I hear about all the time from my friends formerly of the 
Consulate and in other parts of the former Yugoslavia.
    My first question, in dealing with Serbia, Albania, and 
North Macedonia, they are engaged in a regional economic 
process called the Open Balkans. I believe greater regional 
economic integration could make the Western Balkans more 
interconnected and prosperous. Does the State Department 
support the Open Balkans initiative?
    Mr. Escobar. We support all initiatives that bring the 
countries closer together economically. We believe that closer 
economic cooperation is not only happening, but it will 
continue to happen.
    The leaders of the three countries that have explored the 
Open Balkans initiative have assured us that it is open to all 
six countries of the Western Balkans, and we believe them. In 
fact, it cannot succeed without the other three. This Open 
Balkans initiative also mirrors something under the Berlin 
process called the common regional market.
    So we think that they are complementary. We think that 
anything that brings the countries closer together will create 
confidence among the people, will create opportunities for 
political movement on some of the issues. So, yes, we support 
all efforts to bring the countries closer together 
economically.
    And by the way, should this happen, should we get a 
regional market, a free market among six countries of 20 
million people and a $125 billion economy with growth rates 
upwards of 6 or 7 percent, it would be a very, very attractive 
market for American companies. So we want to encourage all of 
that, and we want to encourage American investment in the 
region, as well.
    Ms. Tenney. Thank you. Yes, especially countering anything 
that the Russians are doing. Let me ask you is the 
Administration doing anything to ensure that Montenegro sticks 
to its Euro-Atlantic path and upholds its obligations to NATO? 
And what would be the consequences for these efforts since the 
pro-Russian Democratic Front directly participates in 
government? Is that something that you guys are tracking?
    Mr. Escobar. Yes, we are tracking that very, very closely. 
In fact, last week, we had a series of Montenegro delegations 
visit Washington where we pressed them on maintaining not only 
their European orientation but upholding their NATO 
commitments. At every meeting with every interlocutor we got 
the commitments that their government will abide by that 
arrangement.
    Additionally, we raised with them our concerns about the 
Democratic Front, and they have recognized that every member of 
the coalition will sign on to continued NATO membership, 
continued recognition of Kosovo, and a continued path to 
Europe, and we have gotten assurances that that will not 
change. So we're watching very closely. And as I travel to the 
region, immediately after my visit to Bosnia and Herzegovina, I 
am traveling to Montenegro by road to have more discussions 
with the government to ensure that this continues to be the 
case.
    Ms. Tenney. OK. That sounds like a lot of progress is at 
least being made. In terms of Montenegro's security and 
intelligence services, are we actively monitoring that and are 
we able to scrutinize some of these key appointments and 
keeping track of what's happening with the DF and their 
participation in the government?
    Mr. Escobar. Yes, the government has given us full 
transparency about their moves within the government. They have 
previewed their appointments, and they continue to meet their 
obligations. I would say that Montenegro is still a very, very 
close ally and a very good friend.
    Ms. Tenney. I have got so many questions for you. I do not 
know how much time I have; I do not see it on my screen there. 
But just a quick question on Serbia. They have been seeking to 
procure U.S. original military equipment for peacekeeping 
operations. They are obviously a leading European contributor 
on a per capita basis to peacekeeping around the world. But 
while Serbia isn't a member of NATO, Serbia's use of U.S. 
origin military equipment would increase in interoperability 
between the Serbian military and the United States and our 
allies. Do we support procurement of U.S. military equipment 
between Serbia and the United States, and what are the concerns 
you may have on that, obviously with Russian influence in the 
region?
    Mr. Escobar. I would say that our relationship with Russia, 
sorry, with Serbia is improving at the expense of Russia. We 
currently have a very strong partnership between the Serbian 
military and the Ohio National Guard, and every time they do an 
exercise it displaces a Russian exercise.
    So with regard to Serbia's peacekeeping participation, they 
have worked very closely with us to improve their peacekeeping 
capacity, and they have most recently signed an agreement to be 
part of the Multinational Force Observers in Sinai, helping 
keep the peace between Egypt and Israel. So we welcome that 
kind of engagement by Serbia, and we welcome their efforts to 
procure American-made equipment in limited cases.
    Ms. Tenney. Great. Thank you. Can I just grab one quick 
question. On Bulgaria, they have 16 European Court of Human 
Rights judgments against them for violating human rights and 
freedom of assembly of the Macedonian minority in Bulgaria. 
What is the Administration doing to make sure Bulgaria is 
fulfilling its operations as a NATO member in regard to these 
human rights violations?
    Mr. Escobar. Our Ambassador in Sofia is working very 
closely with her European partners on the ground to make sure 
that these issues get addressed. The basis of our relationship 
with our European partners is about values and not just common 
interests but shared values, and anything that violates that 
bond is of great concern to us.
    Ms. Tenney. Great. Thank you. I appreciate the questions. I 
think I'm running out of time but would love to submit 
questions on Bosnia when we get there, too, because I have 
large Bosnian refugee population, as Representative Wagner 
does.
    But thank you so much. I really appreciate the answers and 
direct answers to our questions. Thank you.
    Mr. Keating. Thank you for sharing your experience with us. 
And the Chair recognizes Representative Brad Schneider for 5 
minutes.
    Mr. Schneider. Thank you, Mr. Chairman. And first let me 
thank the Chairman for your leadership on our resolution we are 
introducing later today reaffirming the U.S. commitment to 
global climate cooperation ahead of the COP26 meetings.
    Deputy Assistant Secretary Escobar, several things. One, 
thank you for your time today and sharing your background. I'll 
echo my colleagues' enthusiastic appreciation of your sister 
and her role in our thing, so thank you, thank you for that.
    I also want to associate myself with my colleague, 
Representative Wild, as well as her concerns about anti-
Semitism in the region. I very much appreciate your response to 
that.
    What I want to focus on is really the issues of poor 
influence in the region, in particular, as you have already 
talked about to some extent, Russia and China, relative to the 
European Union and the United States. Influence can take many 
different forms, including political, military, economic, 
cultural. So I know you touched on some of these things, but 
can you expand a bit on how Russia and China are trying to 
exert broader influence in the Western Balkans and really are 
succeeding, areas of concern or perhaps they're less 
successful? But then, most importantly, I'd love your thoughts 
on how the U.S. with our European allies is pushing back, where 
we are successful, where we need to perhaps change our 
approach.
    Mr. Escobar. That's a very good question. Thank you, 
Representative. We are very concerned about Chinese and Russian 
malign influence in the region, and they are not, they do not 
manifest themselves in the same way.
    So I'll start with Russia. Russia has very little to offer 
the region. They provide almost no investment. They provide no 
humanitarian assistance, no development assistance. And so what 
they have to offer is division and ethnic tension, and they 
work that as hard as they possibly can as a way of undermining 
the multiethnic and democratic nature of tendencies of some of 
these countries. So we work politically in ways to make those 
countries continue on their path, to make them aware of the 
dangers of not countering this kind of rhetoric and allowing it 
to operate in their media space, in their virtual space, and in 
their political space.
    The answer to this one, and it will be the same answer to 
the question of China, as well, is to anchor these countries in 
the community of Western democratic nations through European 
Union membership. That's why accession is so important.
    With regard to China, China operates most effectively in 
the economic sphere. They provide non-transparent loans, often 
with conditions that surprise the countries later. They operate 
in ways that over-promise and under-fulfill their commercial 
commitments. And they frequently do so by pressing these 
contracts become State secrets, so even the taxpayers and the 
voters and citizens of these countries do not understand the 
nature of Chinese investment. So, again, anchoring these 
countries in the European Union where they have legally binding 
obligations to transparency, open tenders, freedom of 
information to their citizens, is absolutely crucial.
    In the meantime, I do believe that American companies are 
the best in the world and they can out-compete China anywhere 
anytime on the basis of quality, customer support, and 
technology. So it is our hope that we can help find ways to 
foster American investment in the region, which is one of the 
reasons why this common regional market would make it an 
attractive target for American companies.
    So, ultimately, it is this joining this broad open market 
of Europe with its standards, its legislative framework, and 
its regulatory structure that will help us combat Chinese 
economic influence.
    Mr. Schneider. Great. Thank you. And with my last few 
seconds here, just building on that, much of it depends on the 
European Union and other countries taking action. Are there 
things we can do in Congress to help promote and support 
American companies doing business in the region, strengthening 
economic ties and, at the same time, working to strengthen the 
economic ties between the countries that make up the Balkans?
    Mr. Escobar. Yes. I would say that high-level attention is 
always welcome. Support for our assistance programs to make 
these countries more capable of handling transparency, legal 
reforms, regulatory reforms is important, and engagement with 
your European counterparts expressing how important it is that 
they get engaged in the Balkans, as well, is crucial to this 
process.
    Mr. Schneider. Great. Thank you. I'm over time, Chairman. I 
appreciate the extra time, and I yield back. Mr. Chairman, 
you're on mute.
    Mr. Keating. Thank you for bringing up the economic 
questions that we have. The Chair recognizes Representative 
Pfluger from Texas for 5 minutes.
    Mr. Pfluger. Well, thank you, Mr. Chairman. I appreciate 
your leadership on this important topic here. And, Mr. 
Secretary, thank you for joining us today. I think a lot of my 
questions are going to be focused around kind of a similar 
trend that you've seen here, and really it gets to the heart of 
our influence versus Russian influence, and I want to focus on 
energy specifically. I mean, there's a massive energy crisis 
going on right now in Europe, you know. To put this in context, 
I see prices in Western Europe at $25 an Mcf for natural gas, 
which is five times that of the United States. I think we're in 
for a rough winter. I think we'll see some challenges there. 
And the most concerning piece of this is that we see Putin very 
willing to weaponize energy as a tool of diplomacy, if you want 
to call it diplomacy, I'll put some air quotes over that, but 
as a tool because it's very concerning with the Nord Stream 
pipeline. You know, you can go through the Baltic countries all 
the way down into the Balkans, and everyone is very concerned 
about this.
    So I just kind of wanted to get your, you know, have you 
seen examples of the Putin regime attempting to weaponize 
dependence in the Western Balkans area on Russian energy so 
far?
    Mr. Escobar. Absolutely. Every energy deal that Putin 
enters into comes with political requirements. In some cases, 
it is pressure for countries not to enter into required 
sanctions against Russia and Russian entities, Russian 
individuals. In other cases, it is to try to garner support for 
their moves in the United Nations to counter our agenda. And in 
many cases, it is to isolate our efforts in moving these 
countries closer to Europe.
    So, yes, there's a tremendous amount of coercion that goes 
on, and one of the main reasons why we are seeking these 
countries to look for ways to diversify their energy, and it 
will happen. And the question is how fast we can make it 
happen.
    So we've been working very, very closely with our partners 
in the region to get liquid natural gas and renewables online 
as quickly as possible. And I'm hopeful that in the next 5 
years a lot of those investigations and a lot of those deals 
will bear fruit.
    Mr. Pfluger. Well, we are hopeful, as well. And I think, 
you know, yesterday we had a hearing with Development Finance 
Corp and some others, and one of the things that strikes me 
right now is that that's a great tool for us to use with the 
Western business values and whether it is in Greece or whether 
it is in Serbia or whether it is in any of these countries, we 
want to make sure that the DFC continues with their commitment, 
for instance to open an office in Belgrade or to do the things 
that Congress has specifically instructed them to do.
    So can you kind of talk to the benefits, if they were, you 
know, when this happens because it is something that I believe 
will help diversify, talk to the benefits of what the DFC can 
be doing and what they should be doing with regard to energy 
specifically in this region?
    Mr. Escobar. I share your enthusiasm for the opportunities 
that DFC offers the region, and I can say that DFC has offered 
some tools, including in Serbia, that were incredibly important 
in entrepreneurial development and women's issues. So I welcome 
their continued engagement. But to be honest, our biggest 
challenge in facing China is financing of major infrastructure. 
And if there are ways that DFC can find to legally support some 
of these infrastructure deals, it will go a long way because 
some of these multibillion dollar investments are a big deal to 
small countries, so they need to have the financing in place 
before they can agree to deals, and that is where China has an 
advantage over our companies in that China can come in and 
offer the deal and the financing at the same time.
    Now, as I said before, the financing often is not 
transparent and not open to scrutiny by the public. But we, I 
am hopeful that we can work with DFC to find opportunities to 
counter that.
    Mr. Pfluger. Well, and, Secretary Escobar, thank you so 
much for that. I think it is so important that we look for 
these, whether it is the DFC or other mechanisms, these 
countries are going to fill their energy needs in one way or 
another. And if they can diversify, that's great; but the No. 1 
thing is they are going to make sure that they have energy and 
we do not want that to be at the expense of a bad deal 
politically or with strings attached or something that leads to 
an even more desperate situation. And so we want to be a part 
of the solution. We welcome the inputs and the avenues that we 
can explore, but I am very passionate about making sure, 
especially knowing that Nord Stream does have a lot of 
political implications with it, negative connotations, that we 
provide these countries with another alternative and that we 
can move in the direction of, you know, pro-Western value 
business models that allow them to have energy and also that 
create good partners and, in some cases, allies for us.
    With that, Mr. Chairman, I yield back. And thank you, 
Secretary, for being here today.
    Mr. Escobar. Thank you.
    Mr. Keating. Thank you very much, Representative. Both the 
Representative Tenney and myself, we'd like to take a few 
minutes for a second round of questions limited to 3 minutes a 
piece. I thank Mr. Escobar for his flexibility in doing this.
    I will just recognize myself quickly for an area that I 
just wanted to emphasize. The Biden Administration and your 
office, how are you working with Serbia and Kosovo, as well as 
our EU partners, to help facilitate the EU-led dialog? And have 
the recent flare-ups impacted these negotiations or broadened 
negotiations?
    Mr. Escobar. Well, the most important thing is, from our 
perspective, the dialog is the forum in which a solution is 
going to be found. So we strongly support Special Rep Lajcak's 
efforts to move this dialog forward.
    So from our perspective and the perspective of our major 
allies, our hope is that we can help the countries implement 
the agreements that they've already made, abide by the 
agreements that they've already committed to, and help them 
create the institutions or implement the political resolutions 
effectively. And in the meantime, while we are not part of the 
dialog and we are not part of the negotiating process, we still 
work very closely with Mr. Lajcak in encouraging the parties to 
be flexible, pragmatic, and solution-oriented.
    And the most recent flare-up, I think, showed the 
opportunities that we have in working together because what it 
ended up doing is proving that the dialog does work as a forum 
for resolving problems. And I look forward to Mr. Lajcak's 
continued aggressive work in moving to more challenging issues.
    Mr. Keating. Well, thank you. You know, I think that your 
personal involvement, the attention of the Secretary, is 
important to reinforce our beliefs and our interests in the 
area. And I think today's hearing also, besides the discussion 
of sanctions, it also went into the importance of our economic 
involvement out of the EU and the U.S. in the area in energy 
and other economic activities. I think that will strengthen our 
hand diplomatically in shaping resolution to so many of these 
conflicts.
    I will now recognize Representative Tenney for 3 minutes.
    Ms. Tenney. Thank you, Mr. Chairman. I just want to just 
clarify something, Mr. Escobar. On the DFC presence in Belgrade 
and supporting the private investments in the Western Balkans 
and Aegean, is that something, are we committed to that still 
and will we be putting a person in place there? I didn't catch 
the precise answer to that. Is the reason we do not have 
someone because we're deciding whether to do it, to put someone 
there, or because we just do not have the right person to go 
there?
    Mr. Escobar. Congresswoman, I do not know what the internal 
deliberations of DFC are. I can only say that the Department of 
State welcomes DFC's presence in the Western Balkans. We think 
DFC has a lot of tools that will make an enormous difference, 
and we are engaging with DFC and looking for ways that they can 
employ the entire array of their tools to address some of the 
issues that we're facing.
    Ms. Tenney. Oh, great. Thank you. I just want to get to 
another question because you said that expanded U.S. sanctions 
regime for the Western Balkans could be used very aggressively 
to tackle the widespread corruption in Bosnia and Herzegovina. 
Can you explain in more detail how the Biden Administration 
plans to use these expanded authorities, and has the threat of 
sanctions been used to bring Bosnia's and Herzegovina's 
different parties to the table on election reform? And I know 
this comes down to a lot of people not understanding some of 
the regional issues where Bosnia and Croatia are so close to 
each other. Can you answer that? And then if there is a way 
that we can have Croatia get their representation somehow. I 
know that there's naturalization of a lot of Bosnians, and 
Bosniaks are Croatian nationals and there are also Croatians 
who are Bosnians, so, obviously, this is probably a remnant of 
the old Yugoslavia. But can you just, what is the sanction 
regime and how are we going to resolve this sort of election 
issue that's sort of a----
    Mr. Escobar. Well, I'll start with the easy answer first. 
Croatia is a signatory to Dayton, and they have a legitimate 
interest in what happens in Bosnia and Herzegovina. And for 
that reason, Matt Palmer sought consultations before he 
traveled down to Sarajevo, so we are working with our Croatian 
partners in making sure that they can support and implement 
their end of their requirements.
    With regard to sanctions, the new expanded authorities have 
not been used yet, but we intend to use them very aggressively. 
And they can be used both against entities and individuals, but 
they're more effective when they're used against individuals. 
So in my personal experience in Balkans, sanctions have been 
very, very useful in getting either unhelpful actors to get out 
of the political space or to isolate them or to change their 
behavior. So it is our intent to use them.
    Ms. Tenney. Quick question. Would you support a Dayton 2, 
to reconsider a new version, as Representative Turner 
introduces each year? Would that be something you'd support?
    Mr. Escobar. I do not. I mean, the Dayton Peace Agreement 
has been successful in keeping the peace for over 25 years, and 
I believe that with limited constitutional reform, with step-
by-step electoral and judicial reforms, we can get to a more 
functional place in Bosnia.
    Ms. Tenney. Great. Well, thank you so much. I really 
appreciate the extra questions and your time. Thanks so much, 
Mr. Chairman. I'm grateful.
    Mr. Keating. Thank you very much. As you can see, Mr. 
Escobar, there's been great bipartisan interest in the region. 
I think that's very important to underscore from Congress. We 
will very much appreciate a followup when you're back in terms 
of what our greater role could be. There are many instances--I 
think one of the things on the ground if you could come back to 
would be the issue of, you know, some of our developmental 
funding is limited to areas where the per capita income, it is 
geared to lower per capita income. And I think that inhibits, 
you know, when it is fairly modernized in this region, some of 
those moneys from being directed there, as important as they 
are for democratic initiatives. So I think that is important.
    And another thing coming back, I'm just intrigued that, as 
China becomes more and more active in that area, Russia 
obviously will look at this as some type of intrusion on an 
area they consider to have greater influence on. So I also, as 
a followup, would be very curious as to what you are finding 
out with that.
    So I want to thank you for your time. I want to thank all 
the members on a very difficult day where we had to do some 
shifting, but we did not want to delay this hearing. The timing 
of this is important, the issue is important. This is an issue 
when our subcommittee was forming early in this congress, we 
wanted to make sure we had a hearing on the Western Balkans and 
emphasize this. I think it is very important, so I appreciate 
your participation and look forward to a successful trip and to 
come back and further brief this Committee on what you see on 
the ground.
    Mr. Escobar. Thank you, Mr. Chairman.
    Mr. Keating. So with that, members of the Committee will 
have 5 days to submit statements, extraneous materials and 
questions for the record subject to the length limitation that 
are there in the rules.
    I want to thank the members again for adjusting around a 
busy day and for their participation in clearly what was a very 
timely and important hearing. With that, I will call this 
hearing adjourned.
    [Whereupon, the above-entitled matter went off the record 
at 12:45 p.m.]

                                APPENDIX
                                
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            RESPONSES TO QUESTIONS SUBMITTED FOR THE RECORD
            
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