[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                    STABILITY AND SECURITY IN THE WESTERN 
                        BALKANS: ASSESSING U.S. POLICY

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON EUROPE

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 18, 2023

                               __________

                           Serial No. 118-38

                               __________

        Printed for the use of the Committee on Foreign Affairs
        
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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
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-----------------------------------------------------------------------------------     
                      
                   COMMITTEE ON FOREIGN AFFAIRS

		 MICHAEL T. MCCAUL, Texas, Chairman

CHRISTOPHER H. SMITH, New Jersey     	GREGORY MEEKS, New Yok, Ranking 
JOE WILSON, South Carolina               	Member
SCOTT PERRY, Pennsylvania	 	BRAD SHERMAN, California
DARRELL ISSA, California		GERALD E. CONNOLLY, Virginia
ANN WAGNER, Missouri			WILLIAM KEATING, Massachusetts
BRIAN MAST, Florida			DAVID CICILLINE, Rhode Island
KEN BUCK, Colorado			AMI BERA, California
TIM BURCHETT, Tennessee			JOAQUIN CASTRO, Texas
MARK E. GREEN, Tennessee		DINA TITUS, Nevada
ANDY BARR, Kentucky			TED LIEU, California
RONNY JACKSON, Texas			SUSAN WILD, Pennsylvania
YOUNG KIM, California			DEAN PHILLIPS, Minnesota
MARIA ELVIRA SALAZAR, Florida		COLIN ALLRED, Texas
BILL HUIZENGA, Michigan			ANDY KIM, New Jersey
AMATA COLEMAN-RADEWAGEN, American	SARA JACOBS, California
  Samoa				        KATHY MANNING, North Carolina
FRENCH HILL, Arkansas			SHEILA CHERFILUS-MCCORMICK, 
WARREN DAVIDSON, Ohio			 	Florida	
JIM BAIRD, Indiana			GREG STANTON, Arizona
MICHAEL WALTZ, Florida			MADELEINE DEAN, Pennsylvania
TOM KEAN, JR., New Jersey		JARED MOSKOWITZ, Florida
MIKE LAWLER, New York			JONATHAN JACOBS, Illinois
CORY MILLS, Florida			SYDNEY KAMLAGER-DOVE, California
RICH MCCORMICK, Georgia			JIM COSTA, California
NATHANIEL MORAN, Texas			JASON CROW, Colorado
JOHN JAMES, Michigan			BRAD SCHNEIDER. Illinois
KEITH SELF, Texas      

                    Brendan Shields, Staff Director
                    Sophia Lafargue, Staff Director

                         Subcommittee on Europe

                 THOMAS KEAN, JR., New Jersey, Chairman

JOE WILSON, North Carolina           WILLIAM KEATING, 
DARRELL ISSA, California                 Massachusetts,Ranking Member
ANN WAGNER, Missouri		     DINA TITUS, Nevada
BILL HUIZENGA, Michigan		     MADELEINE DEAN, Pennsylvania
MICHAEL LAWLER, New York	     JIM COSTA, California
NATHANIEL MORAN, Texas		     SUSAN WILD, Pennsylvania
KEITH SELF, Texas

                    Katherine Earle, Staff Director
                           
                           
                           C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Escobar, Gabriel, Deputy Assistant Secretary, Bureau of European 
  and Eurasian Affairs, U.S. Department of State.................     7

                                APPENDIX

Hearing Notice...................................................    29
Hearing Minutes..................................................    30
Hearing Attendance...............................................    31

 
                 STABILITY AND SECURITY IN THE WESTERN.
                     BALKANS: ASSESSING U.S. POLICY

                         Tuesday, July 18, 2023

                          House of Representatives,
                            Subcommittee on Europe,
                      Committee on Foreign Affairs,
                                                    Washington, DC.

    The subcommittee met, pursuant to notice, at 2:01 p.m., in 
room 210, House Visitor Center, Hon. Thomas Kean, Jr., 
(chairman of the subcommittee) presiding.
    Mr. Kean [presiding]. The Subcommittee on Europe of the 
House Foreign Affairs Committee will come to order.
    The purpose of this hearing is to discuss U.S. policy in 
the Western Balkans and to hear from the Administration on the 
latest issues in the region.
    I now recognize myself for an opening statement.
    Three decades of U.S. diplomatic and economic investments 
in the Western Balkans have contributed to greater stability, 
forward movement on Euro-Atlantic integration, and economic 
growth. However, the Biden Administration needs to 
fundamentally rethink its approach if it hopes to lock in the 
region's western trajectory; push back against the malign 
influence of Russia, China, and corrupt local actors, and 
ensure desperately needed internal reforms are made.
    In particular, two critical pillars of U.S. Western Balkans 
strategy are in crisis mode: the normalization of relations 
between Kosovo and Serbia and the protection of the sovereign 
territorial integrity and multi-ethnic character of Bosnia and 
Herzegovina.
    The European Union has an important role to play in the 
region. Yet, to date, the EU efforts have been complicated by 
the need for unanimity in most of its foreign policy 
decisionmaking, the slow-moving EU accession process, and the 
fact that five of its member States do not recognize Kosovo.
    Therefore, it is incumbent upon the United States to take a 
leading role in the Western Balkans. The last Administration 
understood the importance of U.S. leadership in the region.
    This hearing provides an opportunity to ensure that the 
Biden Administration is similarly invested and to conduct 
congressional oversight of its approach to pursue peace, 
prosperity, and stability in the region.
    There is no single issue holding back the Western Balkans 
more than the failure to normalize relations between Serbia and 
Kosovo. Under this Administration's watch, recent violent 
protests in northern Kosovo threatened an escalation which 
could have engulfed the entire region.
    The bottom line is the current U.S. approach is failing to 
keep a lid on ethnic tensions and instability. Kosovo Prime 
Minster Albin Kurti's uncoordinated action using the Kosovo 
Special Police Force to install local mayors, despite being 
democratically elected, is imprudent and destabilizing.
    However, subsequent violence committed by Kosovo-Serb 
protestors, which led to dozens of serious injuries among KFOR 
peacekeepers, must also be condemned, as to any direct or 
indirect role Belgrade played in organizing and arming those 
protests.
    I'm concerned that this Administration has failed to speak 
clearly about the latter. I welcome last week's announcement 
that Kosovo would take some initial de-escalation steps. In 
particular, the President of Kosovo's militarized Special 
Police Forces must be withdrawn from Serb-majority areas. 
However, as the United States keeps up pressure on Prime 
Minister Kurti, I strongly urge the Administration to also 
engage Kosovo Serbs in Belgrade to ensure new local elections 
will not, once again, be boycotted.
    I share this Administration's concern that Kosovo has not 
implemented an Association of Serb-majority Municipalities, as 
it committed to a decade ago. The rights and concerns of Kosovo 
Serbs must be safeguarded, as these Municipalities are more 
deeply integrated into Kosovo.
    However, I also want to hear a commitment today from our 
witness that the U.S. and EU pressure campaign to push Prime 
Minister Kurti on an ASM being meshed by assurances that, if 
Kosovo engages credibly, the United States will exert the exact 
same pressure on Belgrade, not only to do the same, but also 
uphold its obligations under recent agreements, including its 
pledge not to object to Kosovo's membership in any 
international organization. I do not see any other way to 
ensure the implementation of an ASM and safeguarding of Kosovo 
Serbs' rights without undermining the Kosovo government's 
authority over its own sovereign territory.
    Given the difficulties moving forward on normalization 
talks, the prior Administration, rightfully, diagnosed that 
making progress on outstanding economic and technical issues 
between Kosovo and Serbia in the 2020 Washington Agreement 
could, potentially, lay the groundwork to address thornier 
political issues. I was very disappointed when their plan to 
establish a DFC presence in Belgrade was scrapped by this 
Administration.
    I hope to hear more today about how the United States is 
promoting economic development and U.S. investment across the 
region. We cannot lose sight of the fact that, despite 
disagreements with the current government's approach to Serbia, 
Kosovo is an important U.S. partner.
    For example, Kosovo was one of the first U.S. partners to 
offer to temporarily host evacuees from Afghanistan in 2021. 
Serbia, too, is a critical partner in the region. While it 
hasn't imposed EU sanctions on Russia, I am thankful for its 
support for Ukraine at the U.N. and its decision to take in 
thousands of Ukrainian refugees.
    Yet, this Administration must be clear-eyed in our 
engagement with Belgrade. The recent U.S. decision to sanction 
pro-Russian spy chief Aleksandar Vulin is a reminder that 
malign actors continue to exercise Russian influence in Serbia. 
The United States cannot let up pressure on either Russian or 
PRC inroads in Serbia, as both will threaten the countries' 
stability, prosperity, and Euro-Atlantic integration.
    Sadly, these threats to peace and stability are also 
increasing elsewhere in the Western Balkans. Milorad Dodik's 
secessionist policies and assault on the authority of Bosnia 
and Herzegovina's constitutional court seriously undermines the 
Dayton Agreement.
    Unfortunately, this grave threat to peace has not been met 
by a serious U.S. response. In particular, more sanctions are 
needed now.
    We also are eagerly awaiting the formation of a new 
government in Montenegro. A new governing coalition will have 
high expectations to fight back against entrenched corruption 
and organized crime. It will accelerate Montenegro's U.N. 
ambitions and counter foreign malign influence.
    In North Macedonia and Albania, the International Forum's 
requirement for EU membership must continue to receive high-
level U.S. support. America's security is inextricably tied to 
Europe's security, and Europe cannot be secure if instability 
in the Western Balkans is allowed to boil over. This will take 
real American leadership, lest we allow Russia, China, and 
corrupt local actors to fill that vacuum and undue the last 
three decades of progress.
    I now recognize the ranking member, the gentleman from 
Massachusetts, Mr. Keating, for any statement that he may have.
    Mr. Keating. Well, thank you, Chairman Kean, for holding 
what is an important hearing.
    And thank you, Deputy Assistant Secretary Escobar, for 
returning to this subcommittee to discuss U.S. policy toward 
the Western Balkans, a dynamic and diverse region in Europe.
    Mr. Escobar, I want to begin by thanking you for your 
personal commitment to the region and the effort you and the 
Administration have taken to support peace and stability. Under 
your leadership, the Biden Administration has worked to take a 
more active, but also nuanced approach to the Balkans. You and 
your colleagues have spent countless hours listening to the 
concerns and considerations of the diverse groups present in 
the Balkans, and I know, based on these conversations, you have 
often had to take tough policy decisions.
    Having served as both chair and now ranking member, it is 
clear to me that the Western Balkans is a vibrant region with 
incredible potential, and we must do everything in our power, 
along with our European partners, to support continued 
democratic development, rule of law, and increased protection 
of human rights.
    Yet, recent tensions in the region underscore that the 
fragile peace established after the wars of the 1990's remains 
tenuous. For example, the recent escalation intentions between 
Serbia and Kosovo, and violence in northern Kosovo, have been 
extremely alarming. In response to these events, the United 
States and the European Union have spoken almost in unison, 
calling both Kosovo and Serbia to return to the negotiating 
table and take specific, concrete steps to de-escalate tensions 
and to avoid actions or rhetoric that would be construed as 
escalatory.
    These steps would include immediately returning to the EU-
facilitated dialog; holding new elections in nothern Kosovo and 
encouraging full participation; the formation of an Association 
of Serb-majority Municipalities in Kosovo; resumption of 
efforts to recognize each other's documents and national 
symbols, and an end to all lobbying efforts by Serbia against 
Kosovo's membership in international organizations.
    I welcome the government of Kosovo's public acknowledgment 
of the need for new elections, as well as their efforts to hold 
structured, biweekly meetings with EULEX and KFOR, as 
appropriate, to review and understand the security situation 
there.
    Finally, I believe that all of those who committed to 
violence on May 29th should be held accountable. I call for a 
full judicial review of recent events. Should these specific 
steps be taken, I believe there is a real possibility that the 
path toward normalization can be resumed--a prospect that would 
have significant benefits to all the people in the region.
    On Bosnia, I welcome the EU's decision to grant candidate 
status in December 2022, pending a significant acceleration in 
domestic reforms. Adopting these reforms is likely to be 
difficult, given the current political dynamics in Bosnia, 
however.
    I would urge the Administration to extend full support to 
the reform process, while encouraging Bosnia's leaders to 
prioritize these reforms. Bosnia still has not adopted reforms 
to implement several key European Gary of Human Rights' 
rulings, some of which have found that parts of Bosnia's 
constitution violates the European Convention on Human Rights.
    Further, I continue to be concerned by the violent, 
escalatory rhetoric and secessionist threats from Republika 
Srpska Leader Milorad Dodik. Despite efforts by the Biden 
Administration to sanction individuals actively working to 
undermine the Dayton Accords, realities on the ground threaten 
stability in Bosnia and make is susceptible to foreign malign 
influence.
    In Montenegro, I'm pleased with the outcome of recent 
elections and encourage the State Department to continue to 
support those politicians actively working to achieve EU 
integration for Montenegro.
    Taking a step back on a few broader topics, I continue to 
be encouraged by the progress toward greater economic 
integration in the region, such as the Berlin Process. To that 
end, EU accession remains a necessity for the region, and I 
commend the decisions that have allowed North Macedonia and 
Albania to move forward with their accession process.
    EU membership for North Macedonia and Albania will be an 
added strength to our Transatlantic Alliance at large. And I 
encourage those EU States who remain in opposition to recognize 
these reforms and compromises in North Macedonia and Albania to 
make sure they recognize the actions they have taken and move 
the process forward. They deserve accession.
    Finally, I believe we must, also, recognize the immense 
strain Russia's war of aggression in Ukraine has caused on the 
economies and societies in the Western Balkans. Russia's 
actions have resulted in increased inflation and endangered 
energy and security interests. And Russian malign influence has 
sought to exploit corruption and societal divisions in the 
region.
    Recognizing these realities, we must redouble our efforts 
to engage with countries of the Western Balkans; continue to 
encourage robust foreign direct investment from the United 
States and EU, and further strengthen our bilateral and 
multilateral partnerships. The time for an active U.S. 
engagement in the Balkans is now. I'm glad to see this 
Administration taking concrete steps to support the de-
escalation of recent tensions, while prioritizing Euro-Atlantic 
integration.
    I look forward to hearing the testimony today, and I yield 
back.
    Mr. Kean. Thank you, Ranking Member Keating.
    I ask unanimous consent that the gentleman from Illinois, 
Mr. Schneider, be allowed to sit on the dais and participate in 
today's hearing. Without objection, so ordered.
    Other members of the subcommittee are reminded that opening 
statements may be submitted for the record.
    Mr. Kean. We are pleased to have a distinguished witness 
before us today on this important topic. Mr. Gabriel Escobar is 
Deputy Assistant Secretary in the Bureau of European and 
Eurasian Affairs at the Department of State.
    Mr. Escobar, thank you for being here today.
    Your full statement will be made part of the record and I 
will ask you to keep your verbal comments to 5 minutes, in 
order to allow time for member questions.
    I now recognize Mr. Escobar for his opening statement. 
Thank you.

   STATEMENT OF GABRIEL ESCOBAR, DEPUTY ASSISTANT SECRETARY, 
  BUREAU OF EUROPEAN AND EURASIAN AFFAIRS, U.S. DEPARTMENT OF 
                             STATE

    Mr. Escobar. Chairman Kean, Ranking Member Keating, and 
members of the committee, I appreciate your invitation to 
discuss the Biden Administration's Western Balkans policy.
    Our policy is grounded on a very simple principle: the 
continued integration of the region into Euro-Atlantic 
structures strengthens Europe a geostrategic partner; fortifies 
democratic governance and the rule of law, and makes these 
countries more secure and prosperous, and thus, makes the 
region a better partner for the United States.
    The obstacles are formidable. Stalled progress on 
democratization, corruption, energy dependence on Russia, 
ethno-nationalist politics, and harmful disinformation are just 
some of the challenges. Yet, they are not insurmountable. Our 
engagement is focused on resolving lingering tensions that 
threaten regional stability and on helping these countries 
fight corrosive corruption and disinformation from both 
external and internal bad actors.
    Let me begin with Kosovo and Serbia. In February and March, 
the EU, with strong U.S. support, achieved the breakthrough 
agreement on the path to normalization of relations with an 
Implementation Annex. Both countries must fulfill their 
independent obligations under this agreement.
    A key element is Kosovo's obligation to establish an 
Association of Serb-majority Municipalities to empower 
Municipalities with shared interests, language, and culture to 
coordinate on common challenges, such as delivering public 
services, education, and health care. Kosovo and Serbia also 
agreed to recognize each other's documents and national 
symbols. But, most importantly, Serbia will no longer lobby 
against Kosovo's international integration.
    Since then, there have been a series of serious tensions 
and unacceptable violence against KFOR, police, and journalists 
in nothern Kosovo. In response, NATO deployed reinforcements 
and maintains an enhanced posture to ensure a safe and secure 
environment.
    We, and the EU, called for immediate de-escalation, a 
refocus on implementing their agreements, and to hold new 
municipal elections, and with the participation of Serbs in the 
north. We are urging both parties to fulfill all of their 
obligations, which are essential to their respective European 
paths.
    In Bosnia and Herzegovina, regrettably, Republika Srpska 
President Milorad Dodik remains focused on dismantling the 
State constitution and the Dayton Peace Agreement. Dodik's 
persistent secessionist and anti-democratic actions threaten 
the stability, security, and prosperity of Bosnia and 
Herzegovina and the wider region.
    We will continue to call out and hold accountable those who 
undermine the Dayton Peace Agreement or threaten the country's 
sovereignty, territorial integrity, and multi-ethnic character. 
We are also seeking to bolster Dayton, including through the 
European Union's EUFOR ALTHEA mission and support the Office of 
High Representative's use of Bonn Powers to counter threats to 
Dayton.
    In Montenegro, we see renewed momentum toward realizing its 
European future. Recent Presidential and parliamentary 
elections were free, peaceful, and reinforced the people's 
desire for EU integration and for reforms to advance that goal.
    Both Albania and North Macedonia have opened EU accession 
negotiations. Both are solid partners in encouraging Serbia and 
Kosovo's normalization, and both are stalwart NATO allies.
    To further its EU aspirations, the government of North 
Macedonia has committed to a constitutional change to recognize 
its Bulgarian minority. We strongly support this difficult, but 
necessary, step.
    Transatlantic and European integration are essential to 
reducing the influence of harmful actors like Russia and the 
PRC that seek to destabilize the region and hinder its 
integration, while expanding their influence.
    Russia is the exclusive natural gas provider to some 
Western Balkans countries and a serious threat to regional 
stability. Even as it wages a war on Ukraine, the Kremlin feeds 
disinformation to sow tensions.
    The PRC pairs insidious narratives undermining trust in the 
West with corrosive, entrapping investment.
    We offer alternatives to build resilience; align critical 
infrastructure procurement and foreign investment with EU 
standards to counter disinformation, and to develop clean, 
reliable, and affordable energy.
    The citizens of the Western Balkans want a better future 
for their children, stronger and transparent democracy, 
accountable governments, and greater economic prosperity and 
security. As we help them realize this vision, continued 
bipartisan congressional engagement remains invaluable.
    Thank you and I welcome your questions.
    [The prepared statement of Mr. Escobar follows:]

    [
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    Mr. Kean. Thank you, Mr. Escobar.
    I now recognize myself for 5 minutes of questions.
    As I said in my opening remarks, the government of Kosovo 
must engage upon the implementation of an Association of Serb-
majority Municipalities, as it committed to do 10 years ago. 
However, the United States must ensure that an ASM protects the 
rights of Kosovo Serbs without undermining Kosovo's authority 
over its sovereign territory.
    Mr. Escobar, can you publicly commit that if Prime Minister 
Kurti engages credibly on the implementation of an ASM, the 
United States and the EU will apply the same amount of pressure 
on Belgrade to respond in good faith and uphold its obligations 
under recent agreements?
    Mr. Escobar. Absolutely. The recent agreement, especially 
the Ohrid Agreement, provides an incredible opportunity for 
both countries to create a peaceful and sustainable 
relationship between the two and open the door to greater 
European integration. The agreement requires Serbia to 
recognize Kosovo's sovereignty and territorial integrity; to 
recognize its national symbols, flags, government documents, 
diplomas, passports, license plates, ID cards, and to refrain 
from blocking Kosovo's integration into any international 
organization.
    From the Kosovo side, it requires Kosovo to implement its 
existing legal obligation to form an Association of Serb-
majority Municipalities. We believe that both countries should 
immediately engage on that without preconditions; that both 
countries should begin the process of doing their part without 
regard to any sequencing plan that is not included in the 
process.
    So, we do commit to make both sides acknowledge their 
existing legal obligations and to move fast, as fast as they 
can, and hopefully, we would be able to make significant 
progress on both of those this year.
    Mr. Kean. Thank you.
    I am very concerned by the recent violence in nothern 
Kosovo. What additional steps must Prime Minister Kurti take to 
de-escalate the situation before the United States and the EU 
remove their sanctions?
    Mr. Escobar. Well, first, Chairman, I wouldn't call them 
``sanctions.'' I call them ``consequences.''
    So, the United States and the EU have put together a three-
point plan that involves de-escalation, removal of special 
police, the withdrawal of protestors, and the process to create 
new elections with the participation of the Serbs with no 
conditions, and then, to return to the EU-facilitated dialog. 
So, those are the conditions.
    Now, we have gotten a commitment from Serbia that they 
would remove the protestors and that they would participate 
fully in the elections. We haven't fully gotten that commitment 
from the Kosovo side, but we do agree with Kosovo on many of 
the democratic standards that they would like to apply. And we 
do agree with Kosovo that those who attack journalists, Kosovo 
police, and KFOR troops should be punished.
    But we still would like to see greater alignment on the 
European-facilitated plan. We will continue to work with the 
government of Kosovo to try to convince them that it is in 
their interest to align with the United States, the U.K., NATO, 
the European Union, the Quint, and with North Macedonia and 
Albania, who are also part of this process.
    Mr. Kean. Can you detail how the Administration is engaging 
with Belgrade and the Kosovo Serbs are participating in new 
local elections, as you just said?
    Mr. Escobar. Absolutely. Well, first of all, I want to be 
very clear that, in the process of the democratic development 
of Kosovo, we have sided with Kosovo at every opportunity.
    So, we recognized the need for new elections, despite 
Serbia's objections. We recognized the legitimacy of the 
elections, despite Serbia's objections that the turnout was too 
low. We recognized the authority of the mayors, despite 
Serbia's objection.
    What our singular request was that Kosovo not try to 
install the mayors by force where there were protests 
occurring. That did not diminish Kosovo's legitimacy or 
authority.
    But, in the meantime, we have been very tough with Serbia 
on the conditions that we require for participation in what is 
a democratic process in Kosovo. So, we have gotten pledges that 
they will not oppose this, and there are consequences for 
Serbia, should it oppose it. So, we will continue to work with 
the European Union to ensure that their three-point plan does 
get implemented.
    Mr. Kean. OK. There have recently been numerous high-
profile corruption scandals in Montenegro. These are good 
allegations that a crypto fugitive gave funds to a political 
campaign in exchange for favors, as well as reports of close 
ties between the police, former government officials, and 
organized crime bosses which revealed Belivuk by Sky ECC 
mastering communications.
    How is the United States helping Montenegro combat 
corruption and organize crime? And how corruption in Montenegro 
increased its vulnerability to Russian and PRC malign 
influence?
    Mr. Escobar. Well, I would start by saying that corruption 
is a problem throughout the region. I am pleased to hear and 
see that, in my discussions with the new Montenegro leadership, 
that they are committed to the fight against corruption; their 
EU path, which includes making significant reforms on rule of 
law, and their NATO path. It is true that it remains a 
vulnerable NATO ally, but I do think that there is overwhelming 
public support for fighting corruption, for being an important 
member of NATO, and for pursuing their European Union 
integration.
    So, we will continue to finance some of the reforms. We 
will continue to use our assistance money to strengthen the 
capacity of the police, including to investigate crypto and 
other complex crimes. And we continue to look at Montenegro's 
development as important for the rest of the region as well.
    Mr. Kean. Thank you.
    I now recognize Ranking Member Keating for any questions he 
may have.
    Mr. Keating. Thank you, Mr. Chairman.
    Now, we have discussed the significance of this region in 
many respects, but how has China used the Belt and Road 
Initiative to influence the Western Balkans? How do they 
leverage their loan dependencies and debt traps for influence 
in that region?
    Mr. Escobar. Absolutely. As I said in my opening statement, 
China rarely exerts positive influence in the region. It 
provides deceptively attractive infrastructure support, mostly 
through nontransparent means of financing. It refuses to align 
on economic and social impact studies. And once it does, it 
does use this debt to extract political concessions, including 
nonconcurrence in international bodies on criticizing the 
activities of the PRC.
    So, there is always a political cost to this deceptively 
attractive economic investment. What we have said repeatedly is 
that the reforms that the European Union is requesting, as they 
join the common economic market, makes things more transparent. 
And with that transparency, I believe that American firms can 
outcompete Chinese firms any day of the week.
    Mr. Keating. And I was going to ask how, independently or 
together, the United States and the EU can counter that kind of 
influence. And obviously, their movement toward the EU 
accession is one that, with rule-of-law issues and stability, 
will be enticing.
    But could you comment a little bit more on the appetite for 
private investment in that area? Because, in this area, like so 
many areas of the world, these countries want to deal with us, 
but we are not there. But one of the reasons we are not there 
is because that kind of rule of law and stability isn't in 
place. So, how close are we to bigger investments in the area 
that I think will provide a much better alternative than the 
Chinese?
    Mr. Escobar. I agree. And, look, the region is already, as 
you said, hungry for it. Seventy percent of the Western Balkans 
is tied the European common market, and that common market 
benefits us because a majority of American investment comes 
through European subsidiaries of American companies. So, as 
they align closer in a regulatory and legislative manner to the 
European common market, it really does facilitate foreign 
direct investment.
    Prior to the COVID crisis and the current economic crisis, 
the Western Balkans was the fastest-growing part of Europe with 
enormous opportunities for energy, shipping, transportation, 
IT, and a host of other sectors. So, we plan to be present and 
plan to encourage those countries to make the reforms necessary 
and the transparency measures necessary to attract greater 
Western investment.
    Mr. Keating. The greater influence you mentioned from 
Russia is through the energy sector. An instance of U.S. 
involvement has been the Millennium Challenge with Kosovo and 
the investments there that are going to be spawned from that in 
alternative energies and renewable energies--batteries, 
storage, and other issues.
    What can we do? And how has the Ukraine War changed things 
in terms of the energy dependence in this region, as it has 
through other parts of Europe?
    Mr. Escobar. Well, for one thing, the trends that we are 
seeing in the rest of Europe, which is a recognition that 
dependence on Russian energy is harmful, has permeated the 
thinking of the Western Balkans. So, many of the countries are 
already making the right moves in creating sustainable, 
independent energy sectors. I would say that a star in this 
field is Albania, which will be an exporter of energy to the 
region very soon.
    So, I look forward to working with the region and working 
with European partners, including Greece and others, to deepen 
the energy independence of the region.
    Mr. Keating. I think this is the concrete type of approach; 
that it is best way to counter what people like Milorad Dodik 
are doing with his rhetoric. Rhetoric is one thing, but action 
is another.
    So, do you think this is the best way to approach persons 
that have been twice designated, for instance?
    Mr. Escobar. I definitely do. And it is true, look, 
Russia's influence comes to manifest itself in two ways. One is 
through disinformation, which is cheap political tool, but the 
other is through energy. They have nothing else. Russia 
provides no bilateral trade, no assistance, no capacity-
building, and no support for democratic reforms. It simply 
traps them into energy dependence.
    So, the quicker that we can help the region reduce its 
dependence, either through LGN or through renewables, the 
faster we will be able to counter Russian influence in the 
region.
    Mr. Keating. Yes, Russia has lost more than the war in 
Ukraine in its influence in the region and around the world.
    I yield back.
    Mr. Kean. Thank you, Mr. Keating.
    I now recognize Mrs. Wagner from Missouri.
    Mrs. Wagner. I thank the chairman for organizing this very 
timely and important hearing.
    And, Deputy Assistant Secretary Escobar, I appreciate your 
service and your time here today.
    When you last appeared before this committee over about a 
year and a half ago, we discussed the serious crisis facing 
Bosnia and Herzegovina. Today, the country is experiencing no 
less than an assault on its constitution and democratic 
institutions. Reckless secessionists like Milorad Dodik, 
President of Bosnia's Republika Srpska entity, and his Russian 
backers, are counting on the United States to stand by while 
they undermine the region's peace and stability.
    As guarantor--we are the guarantor in the United States--of 
the Dayton Peace Agreement that ended the horrific violence 
Bosnian war, the United States must prioritize deterring these 
destabilizing, destructive, and anti-democratic actors.
    This morning, alongside Representative Wild, Chairman Kean, 
and Chairman Turner, I reintroduced the Upholding the Dayton 
Peace Agreement through Sanctions Act. My bipartisan bill would 
codify--codify--key sanctions authorities to send an 
unmistakable message to any actor that threatens the peace, the 
security, stability, or territorial integrity of Bosnia. If 
such destabilizing behavior is not ceased, he or she will be 
sanctioned, period. Peace in Bosnia came at a very steep price, 
and those who would threaten that hard-won peace must be held 
to account.
    Deputy Assistant Secretary Escobar, Dodik's unilateral 
removal of Republika Srpska from the jurisdiction of the 
Constitutional Court--I think just a couple of days ago--of 
Bosnia is a serious, serious escalation in his campaign against 
Bosnian sovereignty.
    He has also threatened to hold a referendum on independence 
by the end of the year. This would be taking a sledgehammer to 
the foundations of peace in the Western Balkans. How is the 
State Department seeking to prevent this? And how can we bring 
a stop to Dodik's constant assaults on the Dayton Agreement?
    Mr. Escobar. Well, Congresswoman, I want to start by saying 
I agree with absolutely every word that you have said. His 
assaults on Dayton and on the constitutional order of Bosnia 
and Herzegovina represent not just a threat for the country, 
but a threat for the region.
    Mrs. Wagner. Yes.
    Mr. Escobar. The United States is committed to the 
territorial integrity, the sovereignty, and multi-ethnic 
character of Bosnia and Herzegovina. And so, it is our intent 
to use absolutely every tool that we have to prevent that from 
happening and to hold those that would damage the country 
accountable. So, that includes a stronger peacekeeping force 
under the EUFOR ALTHEA mission----
    Mrs. Wagner. OK.
    Mr. Escobar [continuing]. The full support for the High 
Representative and his use of Bonn Powers. And we are 
coordinating with the European Union, with the EBRD, IMF, and 
other international actors to withhold money from those who 
would damage the country.
    But, most importantly, we see sanctions as a very effective 
and very important tool in our foreign policy toolbox.
    Mrs. Wagner. And you would agree my piece of legislation is 
timely and necessary?
    Mr. Escobar. I would, absolutely.
    Mrs. Wagner. Thank you.
    Mr. Escobar. And if I can add that we are just at the very 
beginning of showing what the consequences are going to be. You 
can count on an American reaction to all of these destabilizing 
views.
    Mrs. Wagner. While the United States has sanctioned other 
persons in Bosnia and Herzegovina for undermining the Dayton 
Accords, do you assess sanctions are being used effectively to 
deter destabilizing behavior? And are there more individuals--
obviously, there have to be--in Bosnia and Herzegovina who 
should be sanctioned?
    Mr. Escobar. I agree with that. And I will say that they 
are effective. There are two metrics that I can tell you that 
are effective. One is that in private conversations the one 
thing that officials from Republika Srpska ask us is, ``Please, 
no more sanctions.''
    Mrs. Wagner. Well, I do not know what the delay is, but the 
time is running out, sir. It really is.
    The United States and U.K. sanctioned Dodik last year, but 
the EU has yet to do so. Why has the EU not sanctioned Dodik?
    Mr. Escobar. Well, that is a very good question. The most 
common answer that I hear is that the EU requires 27, unanimous 
consent of all 27 member-States.
    Mrs. Wagner. Well, we have got to get Hungary onboard, and 
I hope that we will do more to apply pressure and influence 
there.
    My time has run out and I yield back. And I thank you.
    Mr. Escobar. Thank you.
    Mr. Kean. Thank you.
    I now yield 5 minutes to Ms. Titus of Nevada.
    Ms. Titus. Thank you.
    I would like to go back to Mr. Keating's because I agree 
with him how much of an influence China has had in the area. 
Over the last decade, we know they have invested some $32 
billion in infrastructure. And Albania, Bosnia, Herzegovina, 
Montenegro, North Macedonia, and Serbia have all joined their 
Belt and Road Initiative. So, there's no question that they are 
there, and they make these offers that are too hard to turn 
down, if we are not there with some investment ourselves.
    But what is happening with the Russian influence seems to 
be more insidious. And we see that through the disinformation. 
I understand the energy question, but the disinformation 
question is harder to get at, I think.
    We certainly saw it when North Macedonia was having the 
referendum to change the name in Greece and Macedonia and 
accept that, so they could move to the West. Russia did not 
like seeing them move to the West, moving along that path to EU 
membership. So, they were in there with a good bit of 
information.
    Could you talk a little bit more about how that works in 
some of these other countries?
    Mr. Escobar. Well, look, I think that disinformation is a 
very cheap tool for Russia, and it does seek exclusively to 
create inter-ethnic tensions and doubt about these countries' 
commitment to European integration.
    So, what we have sought to do is to work with governments 
to, first of all, identify the outlets for disinformation; to 
look for ways to shut down outlets that are purely propaganda 
and not necessarily have any journalistic value at all. We have 
also looked to use our sanctions authority for people whose 
sole purpose is to create disinformation in the region on 
behalf of Russia.
    And so, we will continue to work with governments. Now, the 
most important thing is that we need partners to call it out. 
And I would say that, overwhelmingly, particularly in the 
countries that are NATO members in the Western Balkans, we have 
had a very good level of success in pushing back on Russian 
disinformation.
    Ms. Titus. Well, how would you comment on the status of 
free press in these countries?
    Mr. Escobar. I would say that, to varying degrees, it is 
challenging, but international organizations have said that 
there is still far too much pressure--financial, personal, and 
legal--on some of the independent outlets in the region. I 
would say that protection of journalists in the region lags far 
behind the rest of Europe.
    And part of the requirement for European accession is about 
free press. It is about protection of not just independent 
journalism, but civil society as well. And we stand side by 
side with our European partners to hold governments to account 
on that.
    Ms. Titus. I serve on the HDP, House Democracy Partnership, 
and we have exchanges with a number of these countries. And, of 
course, the problem of corruption and rule of law, those are 
certainly some of the barriers standing in the way to moving 
along this path to accession.
    But one of the problems is, every time we go to visit, it 
is a whole new group of people, and you do not have established 
parties. You often have Associations of personality.
    So, I just wonder, how are you dealing with that lack of 
institutional stability to help move away from some of the 
disinformation or more toward the West?
    Mr. Escobar. Well, in general, one of the reasons why one 
of the pillars of our policy in the region is European 
integration is that it is about creating sustainable and 
durable institutions. So, we are working to create 
institutions. We are also doing it bilaterally through USAID to 
create--not only to help finance civil society, which will be 
the continuity on some of this, but also to create independent 
institutions, independent judiciary, and independent ombudsman 
offices that will help us; that will be long-term partners in 
this process.
    Ms. Titus. Just finally, I know Greece is not part of your 
domain or bailiwick or jurisdiction, but I do not see how you 
can make policy in the Western Balkans without Greece being a 
big part of that. Certainly, in the development of energy, we 
see that now, and even in the whole situation with the 
Macedonian name. I mean, Greece has got to be a big player in 
everything done here.
    Mr. Escobar. Greece is an example, at least in Kosovo, that 
not all non-recognizers are adversaries. I do engage the Greek 
government frequently. They are helpful. They are an integral 
part of bringing stability to the region politically, but, 
also, they are one of the leading countries that are moving to 
help diversify the energy picture in the Western Balkans. So, I 
do engage with Greece, and Greece is absolutely indispensable, 
as is Austria, as is Slovenia, and others.
    Ms. Titus. Thank you. I yield back.
    Mr. Kean. Thank you, Ms. Titus.
    I now recognize Mr. Huizenga of Michigan for 5 minutes.
    Mr. Huizenga. Thank you. I appreciate it, Mr. Escobar.
    Serbia has imported arms from China, including drones, 
according to reports. How does this affect Serbia's aspirations 
to join the EU, given the EU's arms embargo against the PRC?
    Mr. Escobar. I would say that it challenges it. Now, there 
are some technical complications here. Now, one of the 
discussions that we have with Serbia is that the CAATSA 
sanctions prevent them from buying Russian weaponry. And they 
dramatically decreased their procurement from Russia, but, in 
doing so----
    Mr. Huizenga. So, not just China, but Russia as well?
    Mr. Escobar. Right. But they have increased from China, 
which is not limited by any of our sanctions regimes. We have 
said that, if they truly want to be part of the Euro-Atlantic 
community, that they show it, in part, through their military 
procurement.
    So, we would like to see greater engagement from European 
and American companies in that vein. That said, we also want to 
be very careful about our existing policy that supports Kosovo, 
as we do so. So, we would like to see a comprehensive 
discussion on how Serbia should be behaving in the region.
    Mr. Huizenga. My understanding is it is something like 30 
tanks and 30 armored personnel carriers have been bought, 
purchased from Russia. They have also purchased some air 
defense systems, as well as attack/transport helicopters.
    Has it been communicated to Belgrade that the United States 
could respond to significant purchases of Russian military 
equipment----
    Mr. Escobar. Absolutely.
    Mr. Huizenga [continuing]. Per those mandatory sanctions?
    Mr. Escobar. Absolutely. Absolutely. We have given them----
    Mr. Huizenga. And what has their response been?
    Mr. Escobar. Their response is they understand and they are 
adapting.
    Mr. Huizenga. I'm sorry, they are what?
    Mr. Escobar. They are adapting their procurement 
strategies----
    Mr. Huizenga. Adapting? Meaning they are stopping?
    Mr. Escobar. I would say that they have curtailed it 
significantly as a result of our----
    Mr. Huizenga. So, they are not stopping, but maybe curbing 
their purchasing?
    Mr. Escobar. It is a complicated procurement process that 
involves----
    Mr. Huizenga. Oh, yes.
    Mr. Escobar [continuing]. That involves what they are 
buying----
    Mr. Huizenga. Sanctions are complicated.
    Mr. Escobar. No, well, it----
    Mr. Huizenga. I sit on the Financial Services Committee----
    Mr. Escobar. Yes.
    Mr. Huizenga [continuing]. Where most of those sanctions 
run through.
    Mr. Escobar. Right.
    Mr. Huizenga. But, pretty typically, either that switch is 
thrown on or off.
    Mr. Escobar. That's right. And so, look, there are some 
challenges when you are talking about existing contracts that 
require logistical support for already-purchased weapon 
systems.
    Mr. Huizenga. So, fair to say we have warned Belgrade 
that----
    Mr. Escobar. Very forcibly so, sir.
    Mr. Huizenga. OK. I'm glad to hear that.
    Along that vein, you had mentioned Kosovo and advocating 
for Kosovo, and I see we have the Ambassador is here in the 
audience as well. Five member-States of the EU--Spain, Greece, 
Romania, Cyprus, and Slovakia--currently do not recognize 
Kosovo's independence. This would seem to be a serious obstacle 
for Kosovo in the Euro-Atlantic integration.
    How is the State Department engaging with these countries 
to urge them to recognize Kosovo?
    Mr. Escobar. Well, I have permanent contact with all five 
of those countries. Now, one of the things that they do want, 
and one of the things that I have been trying to convince the 
government of Kosovo, is they want to see a European process in 
order to satisfy their requirements under their own laws, under 
their own national legislation, to be able to recognize.
    Now, it is our position that----
    Mr. Huizenga. Meaning what exactly?
    Mr. Escobar. Well, I'll say that, from our perspective, it 
is our highest aspiration that Kosovo be a member of NATO, a 
member of the European Union, and have a seat at the United 
Nations. Now, for some of the countries, they cannot recognize, 
absent a bilateral agreement between Serbia and Kosovo. For 
others, they do not recognize unilateral declarations of 
independence. So, they would like to see an agreement on 
normalization.
    This is one of the reasons why the Ohrid Agreement offers 
us the greatest opportunity in 15 years to partner with the 
government of Kosovo to begin, not just a regional, a European 
recognition campaign, but a global recognition campaign.
    Now, what most of these countries would like to see is they 
would like to see the goodwill from Kosovo in fulfilling its 
part of the agreement, which is the Association of Serb-
majority Municipalities. So, one of the reasons why I have 
encouraged the government of Kosovo to go ahead and move 
forward on this, with American support, in a way that ensures 
that the ASM does not violate their constitution, their legal 
structure, or their functionality. So that we can move forward 
this year on a recognition campaign. To date, I have not gotten 
that alignment from the government of Kosovo.
    Mr. Huizenga. All right. In my last remaining few seconds 
here, is the Biden Administration planning to continue to use 
sanctions to address Russian influence networks in Siberia, as 
well as across that Western Balkans region?
    Mr. Escobar. Yes.
    Mr. Huizenga. OK. And maybe we will followup with a 
``how?''
    [Laughter.]
    Mr. Escobar. Yes, sir.
    Mr. Huizenga. I wish I had more time for the ``how?''
    Mr. Escobar. Yes.
    Mr. Huizenga. That is, actually, the important part.
    So, with that, I yield back, Mr. Chairman.
    Mr. Kean. Thank you, Mr. Huizenga.
    I now recognize Mr. Costa of California for 5 minutes.
    Mr. Costa. Thank you, Mr. Chairman. I think this is an 
important hearing.
    And let me followup with my colleague's last question and 
ask you the ``How?''
    Mr. Escobar. Well, I will say that, on sanctions on Russia, 
we are constantly looking for ways to limit Russia's malign 
influence everywhere we see it, including the Arctic region, 
including the Baltics, including the Balkans.
    And so, the sanctions part is a really important piece of 
it. The energy diversity part is very important. I have to say 
that, in the past year and a half, since the beginning of the 
unprovoked aggression by Russia on Ukraine, we have seen a 
tremendous convergence with our European partners on the need 
to limit Russia's ability to do harm in this world.
    Mr. Costa. No, and that is true, but, as noted before, 
sanctions can be effective, are complicated. And, of course, 
notwithstanding probably the most fierce sanctions that Russia 
has ever felt, they still are able to find workarounds, and 
therefore, we must constantly be on it. We need our European 
allies, obviously, at the same time, to ensure--I mean, the 
amount of fuel, of energy that Russia is still managing to sell 
is financing their war and continuing to maintain their economy 
in ways that we had hoped it would not be.
    You talked more on the issue of Kosovo and Serbia, and the 
trajectory on your comprehensive normalization efforts. And you 
have these conditions that have been stated. You know, that was 
back in March, I guess, of 2023 and acceptance of the 
Implementation Annex. And both the EU and we view these as 
being legally binding, as I understand it.
    So, when you look at the five bullets, the parties agreed 
to establish good neighbor relations. The parties agreed to 
mutually recognize respective national symbols and documents. 
Serbia will not object to Kosovo's membership in any 
international organizations, and to work toward implementing 
the ASM and the agreement.
    Where are we on these five bullets? Because I think we are 
now in July, and what do you see the prospects of successful 
implementation and agreement before the end of the year? I 
mean, who needs the most prodding and pushing in this instance?
    Mr. Escobar. Well, I would say I do not see a lot of 
goodwill on either side to implement that agreement. We have 
tried repeatedly on both sides to make movement. And in the 
meantime, what we have seen is a series of escalating tensions 
in the region.
    Mr. Costa. And finger pointing.
    Mr. Escobar. And finger pointing. So, our position is that 
the agreement was immediately implementable upon agreement. And 
so, each side had to map out a way in which they were going to 
do their part.
    So, for Serbia, it will require entering into legislation, 
the recognition of Kosovo's national symbols, and all of the 
other elements that I talked about before.
    And for the Kosovo side, it was the immediate work on the 
draft statute of the Association of Serb-majority 
Municipalities.
    To date, we have seen neither party move forward on that.
    Mr. Costa. And so, are these negotiations continuing with 
both ourselves and the EU sitting down with both these parties 
across the table to create some level of momentum?
    Mr. Escobar. Yes. Unfortunately, over the last 60 days, 
what we have seen, what we have had to focus our attention on, 
is preventing the violence in the north from spreading even 
further and from destabilizing the region. But that was the 
point of the EU three-point plan on de-escalation, which we 
support----
    Mr. Costa. Well, Russia's influence on Serbia, obviously, 
isn't helping.
    Mr. Escobar. It is not helping, but I will tell you that, 
on much of this, it is not so much a bilateral issue as a 
failure of ethnic reconciliation inside of the country as well.
    Mr. Costa. Well, the ethnic recognition goes back----
    Mr. Escobar. It goes back a long----
    Mr. Costa [continuing]. Hundreds of years, I mean.
    Mr. Escobar. I would say not as far, and much of it is 
regional. Because if that were the case, the entire region 
would be embroiled in ethnic rivalry. And I will say that, 
right now, we have a two-track Balkans. We have those that are 
NATO members that are actively contributing to the regional 
stability. And not surprisingly, those are the ones that have--
--
    Mr. Costa. Before my time is--what are the efforts on the 
Western Balkans to respond to the rising white nationalism and 
antisemitism across Europe?
    Mr. Escobar. We are working very hard. We call it out 
wherever we see it. Part of the reform process is the 
protection of minorities, and it is the fight against harmful 
and fascist rhetoric as well.
    Mr. Costa. All right. My time is expired, but to be 
continued. Thank you.
    Mr. Kean. Thank you, Mr. Costa.
    I now recognize the vice chair of the committee, Mr. Self 
from Texas.
    Mr. Self. Thank you, Mr. Chairman.
    My history, I traveled extensively through Bosnia and 
Herzegovina when I was in NATO; build the forces to go there, 
the combined forces, international forces, and the force to go 
to Kosovo. I have actually been in Belgrade to see the bomb 
damage that we inflicted with a Tomahawk into the MOD building, 
which they kept for whatever reason.
    I see some, I hear some internal dissonance in your 
testimony and this discussion. You said we have sided with 
Kosovo at every turn. I think you since have backtracked on 
that to a more balanced approach, but I do not think there is 
any doubt that Vucic incited the boycott of the Kosovo 
elections. There can be no doubt of that. What I'm less certain 
of is that Serbia delayed their own elections based on the 
Kosovo elections.
    I want to point out to people--and I, hopefully, will get 
to a question--this is not Ukraine, which is on the edge of 
NATO. This is Serbia and Russia surrounded by NATO nations. 
This is, potentially, more dangerous than Ukraine to NATO, 
should this violence spread.
    I'm uncertain as to why we do not have sanctions on Serbia 
now. Because they have imported heavy weapons from Russia since 
2017, which should have led to sanctions under something called 
the Countering America's Adversaries Through Sanctions Act in 
2017. We will stop there and ask you, why not?
    Mr. Escobar. Well, I will tell you that, on the sanctions 
question, it is not office that deals with the sanctions 
question, but I do understand the process. The CAATSA sanctions 
are not merely about purchasing Russian weapons. If that were 
the case, we might have a problem with India, Turkiye, and 
others.
    And so, really, it is about the level of purchase and the 
technological capability of the purchases. That is why we have 
continually had this discussion with Serbia about the risk that 
they are taking from----
    Mr. Self. Well, let me ask you that. Let's followup on that 
point.
    Mr. Escobar. Yes.
    Mr. Self. Do you have discretion on sanctions? Would those 
sanctions not help with what you are trying to achieve, 
implementation of the agreement?
    Mr. Escobar. Where we have the greatest leverage or the 
greatest flexibility is on Western Balkans sanctions to 
sanction those who undermine regional stability--and we have 
used those liberally--and for corruption. And we have used 
those extensively as well.
    CAATSA is a different issue because it is a different 
office, and it is really a question of sanctions that are 
aligned with our Russia policy, which I do not deal with.
    Mr. Self. OK.
    Mr. Escobar. But I'm happy to take that question back.
    Mr. Self. Very good.
    Mr. Self. In the interest of time, I was kind of surprised 
to see that Eliot Engel, a colleague from across the aisle who 
used to chair this committee, just wrote a piece on Serbia and 
Russia. And he reached the conclusion--now, remember, he is a 
colleague from across the aisle who used to chair this 
committee, that reached the conclusion that the Biden 
Administration is appeasing Serbia. Any comments on you, as a 
Biden Administration official?
    Mr. Escobar. I would say that is factually wrong. So, in 
the last 60 days, everything that we have done has prejudiced 
Serbia. We were in favor of visa liberalization for Kosovo, 
Council of Europe membership for Kosovo. We are in favor of 
supporting their elections over Serbia's objections. We 
recognized the results of the elections, even with a 3 percent 
turnout, over the objections of Serbia. We recognized the 
authority of the mayors over the objections of Serbia. We have 
sanctioned their intel chief. So, there is----
    Mr. Self. But you are also supporting new elections. And in 
a previous hearing, I made the point that, when we have a low 
turnout in the United States, which we often do, we do not ask 
for new elections. And yet, you have joined the EU in calling 
for new elections, have you not?
    Mr. Escobar. We have. In fact, the government of Kosovo 
itself has said that these elections are a key to stability 
because----
    Mr. Self. So, is that not an indication that Kosovo is 
willing to work with Serbia?
    Mr. Escobar. That is. Now, we would like to move forward on 
that part as well. So, we have a commitment from both sides. We 
have a commitment from Kosovo that they would welcome new 
elections. They see that having ethnic Albanian mayors in 
predominantly Serb Municipalities--with in some cases some of 
the municipal members had only a single vote, their own--that 
is not a recipe for stability.
    Mr. Self. I understand.
    Mr. Escobar. So, we are working with both sides.
    Mr. Self. My time is up. So, I would just ask you, do not 
let this Russian proxy inside NATO territory get a toehold.
    Thank you, sir.
    I would yield back.
    Mr. Kean. Thank you, Mr. Self.
    I now recognize Mr. Moran for 5 minutes.
    Mr. Moran. Secretary Escobar, thank you for your time 
today.
    I want to talk to you a little bit about Montenegro. And 
you know, China has spent a lot of time and a lot of money, 
through its Belt and Road Initiative in the Balkans. And they 
have, particularly, back in 2014, invested about $1 billion 
with Montenegro for a major highway system there. That is about 
20 percent of the GDP of Montenegro, and the principle cost of 
that is just enormous to me, as I think about their total GDP.
    Do you know what progress Montenegro has made in paying off 
this significant debt to China?
    Mr. Escobar. Well, look, I do not know all the details, but 
I do know that the former Minister of Finance did a really good 
job of refinancing, with international assistance, some of that 
debt to lower the interest rate and to lower the debt load.
    But we agree. And unfortunately for Montenegro, we use the 
example of that road as an example of the malign debt trap that 
China uses to pressure countries in the region.
    Mr. Moran. Yes, that is why it surprised me that, in March 
of this year, it looked like that Montenegro signed another MOU 
for China to do some additional investment for another road to 
its Belt and Road Initiative. Is my understanding correct?
    Mr. Escobar. I think it is the same road, sir.
    Mr. Moran. The same road? Are they doing more financing or 
is it a refinancing? What happened in March of this year?
    Mr. Escobar. Unfortunately, I do not know the details of 
that. I will have to take that back and get back to you on 
that.
    Mr. Moran. When you say that the international community 
stepped in and helped with some of the terms of the financing, 
is China still the principal creditor behind the financing?
    Mr. Escobar. Oh, no, I did not say that we stepped in. I 
said that----
    Mr. Moran. No, I said, ``the international community.''
    Mr. Escobar. Right.
    Mr. Moran. You mentioned that somebody in the international 
community----
    Mr. Escobar. That's right, the international community. I 
believe it was through international lenders. But that was not 
through the U.S. Government.
    Mr. Moran. But is China still the principal creditor? Or 
has somebody else stepped in the middle of that as the new 
creditor?
    Mr. Escobar. For that road, I believe they still are, but, 
again, I do not know the full details of that.
    Now, if I can say one thing about Montenegro, the recent 
Presidential and parliamentary elections are poised to make 
Montenegro one of the fastest-achieving candidates for European 
Union membership. So, I'm very confident that the new 
leadership of Montenegro is taking it in the right direction 
and that they are very clear about how they see Chinese 
investment.
    Mr. Moran. Yes, in April 2023, Jakov Milatovic was elected 
and supplanted the prior leader of Montenegro. And that was 
good news because it looks like that the new leader is more 
pro-American than his predecessor. Is that your understanding 
as well?
    Mr. Escobar. Well, I would say they are equally pro-
American, but I would say that it was a welcome transition. The 
previous president had been in power for over 30 years nonstop. 
So, this democratic transition is exactly what we are looking 
for from aspirant countries in the region.
    So, I hold out a lot of hope for the future of Montenegro.
    Mr. Moran. Do you know why the country of Montenegro sought 
out this financing originally in 2014 and continues to look 
toward China for assistance in its infrastructure? Is it 
because it has no other place to go? Is the United States 
stepping in to try to assist? Give me the sense of why there is 
only----
    Mr. Escobar. Well, I would say that it is consistent with a 
lot of the patterns that we have seen in the Western Balkans, 
which is deceptively cheap infrastructure projects that come 
with built-in financing.
    I believe the United States and Europe have to figure out 
the financing piece. And that will be important for small 
countries like Montenegro and others in the region.
    Mr. Moran. Yes, I absolutely agree with that. So, tell me, 
what are your thoughts, specifically, on how we do that? How do 
we get ourselves between China and these smaller countries that 
are seeking infrastructure investment?
    Mr. Escobar. Well, we see DFC as an important part of that, 
and we would like to see a more active presence of DFC in the 
region.
    Mr. Moran. Does DFC allow us to invest in countries for 
national strategic purposes, in addition to qualification on 
economic bases?
    Mr. Escobar. I cannot speak on behalf of another agency, 
but I do certainly hope, and I do believe, that they have the 
same strategic vision and aspiration that we do.
    Mr. Moran. All right. I will use the remainder of my time 
just to reinforce that I think it is imperative for us to do, 
as you have mentioned, get between China and some of these 
smaller countries across the world, including the Balkans, and 
to make sure that we are not allowing them to become 
financially captive to China, so that they are no longer 
influenced by China for their foreign policy, their economic 
policy, and frankly, their military policy.
    I appreciate your time.
    I yield back.
    Mr. Escobar. Thank you.
    Mr. Kean. Thank you, Mr. Moran.
    I now recognize Mr. Issa from California for 5 minutes.
    Mr. Issa. Thank you.
    With no disrespect to our witness, it should be noted that 
this is an unusual situation in which we are hearing from the 
Administration, but we are not hearing from the parties who, I 
believe, would be able to give us a lot more insight into some 
of the instability in the regions and the causes. And this is 
particularly true in northern provinces of Kosovo. Albeit a 
small population, it is still a population that needs to be 
resolved, and I will ask about that later.
    My first question is, the Prime Minister's unilateralism is 
well-documented and is a major obstacle to progress. What and 
how should we be dealing with, quite frankly, a head of State 
who is not part of the solution?
    Mr. Escobar. Well, I would say, to begin with, we have made 
our requests very public and very clear. The European Union, 
for its part, has imposed consequences, and we have as well. We 
withdrew Kosovo from a major international military exercise as 
a result of the unilateralism. And we continue to look for ways 
to partner with what is one of our closest allies in the 
region.
    I do have to say that we are concerned about the lack of 
alignment that Kosovo has, not just with the United States, but 
with the entire Transatlantic community. So, that includes the 
U.K., the European Union, NATO, the Quint, and its neighbors 
Albania and North Macedonia.
    We are looking actively for ways that we can convince the 
government to see the United States, again, as its primary 
partner in the region, and that alignment with the United 
States only benefits Kosovo. It does not detract from its 
aspirations.
    Mr. Issa. And following up on the United States being 
primary, historically, it certainly is fair to say that in many 
ways the United States is taking a back seat to the European 
Union on many of these issues. Can you describe what the 
benefits are of a lesser involvement, lesser engagement, and 
letting the European Union have, if you will, the front seat?
    Mr. Escobar. Well, first of all, I respectfully disagree 
that we have taken----
    Mr. Issa. I thought you would.
    Mr. Escobar [continuing]. A backseat. But, you know, it is 
important that the European process be the face of our 
Transatlantic engagement.
    The challenge for Kosovo to be a part of NATO and a part of 
the European Union is it runs through five non-recognizers. So, 
we need a European path that the European non-recognizers 
understand and accept as the basis for their foreign policy 
decisions.
    However, we are very, very firmly in support of that 
process. We bring the two parties together. We support every 
outcome financially, politically, and through capacity-
building. And we will continue to do so.
    And in the meantime, we are one of the primary guarantors 
of a safe and secure environment in Kosovo through our 
contributions to the NATO peacekeeping force in Kosovo. So, we 
are very involved and very engaged in this process.
    Mr. Issa. Well, following up on ``very involved and very 
engaged,'' and recognizing that I'm not asking for unreasonable 
risk, but the State Department, by definition, takes risks in 
every place they go, particularly in areas of conflict. It is 
my understanding that we have not had U.S. diplomats in north 
Kosovo to meet with the parties there in, if you will, any 
reasonable time in the last year. Can you explain how the 
meeting elsewhere is the equivalent of going to the region and 
meeting there?
    Mr. Escobar. Well, that, again, I respectfully disagree. I, 
personally, travel to Mitrovica almost every time I go. I talk 
to----
    Mr. Issa. When was the last time you were in north Kosovo?
    Mr. Escobar. The last time I was in north Kosovo was in the 
fall of last year. Now, since then, I have been with leaders of 
Kosovo, including Serb leaders, in other parts of Kosovo, in 
other parts of the region. I speak to the leader of Srpska 
Lista on a regular basis.
    And as we speak, we have a group of Kosovo Serbs, civil 
society leaders, here in town, and they are having contacts 
with people on the Hill as well. So, we have significant 
contact with Kosovo Serbs.
    Mr. Issa. Last, I just want to slip in one last question, 
if you do not mind. Do you believe that there is a 
constitutional way to resolve this multi-ethnic problem in a 
way that keeps a united Kosovo?
    Mr. Escobar. Absolutely. Absolutely. I think that the 
Association would do that. On one hand, it would allow Serbs to 
exercise their rights of self-governance, as was envisioned 
under the Ahtisaari Plan, as is required by the Brussels 
Agreement, the Ohrid Agreement, and the European Council 
conclusions, but also takes into account the fact that these 
people are also dual citizens. So, there are European models 
that we can implement, if we have the goodwill of the parties.
    Mr. Issa. Thank you.
    Thank you, Mr. Chairman. I yield back.
    Mr. Kean. Thank you, Mr. Issa.
    I now yield to Mr. Lawler for 5 minutes from New York.
    Mr. Lawler. Thank you, Mr. Chairman.
    It has been over a decade since the 2013 Brussels 
Agreement, and progress between Serbia and Kosovo on 
normalizing relations is clearly stalled. Is it time to reopen 
this agreement and think anew?
    Mr. Escobar. No, I would say no. I think it is a good 
agreement. It is a valid agreement. And it is the basis for the 
Ohrid Agreement, which creates real possibilities for both 
countries to integrate closer to the European Union and to 
create a peaceful and sustainable relationship between the two.
    What we need from both sides is to rise above the politics 
of ethnic rivalry, populism, and ethno-nationalism and look at 
the real opportunities of joining a union where they will be 
forced to live not just with the people of their own ethnicity, 
but people of all ethnicities in the European Union. So, that 
is what we need, is we need some political courage on both 
sides.
    Mr. Lawler. I'm certainly sympathetic to Pristina's 
concerns that the Association for Serb-majority Municipalities 
could be manipulated by Belgrade as a lever of influence. Has 
the Administration tried to, instead, develop a new construct 
which would protect ethnic minorities, specifically, the Kosovo 
Serbs, in Kosovo without undermining Kosovo's sovereignty over 
northern Kosovo?
    Mr. Escobar. That is our stated policy. In fact, the 
Secretary's counsel, Derek Chollet, and I published an op-ed in 
Kosovo outlining that any such Association should not undermine 
Kosovo's constitutional authority, its legal structure, or its 
functionality; that it really would be about delivering, 
effectively delivering, services, municipal services, in 
Serbian language to a population that speaks Serbian. That is 
really what it is, and nothing more.
    So, we have been working--we had offered, in fact, Albania 
has offered to help draft that statute. And we are hoping that 
Kosovo will understand that it has an obligation, and while it 
fulfills that obligation, it should be in line with European 
standards.
    Mr. Lawler. Five member-States of the European Union--
Spain, Greece, Romania, Cyprus, and Slovakia--currently do not 
recognize Kosovo's independence. This is a serious obstacle to 
Kosovo's Euro-Atlantic integration. How is the State Department 
engaging with these countries to urge them to recognize Kosovo, 
and then, begin the conversations about EU and NATO membership?
    Mr. Escobar. Well, first of all, we have had these 
conversations not just with the non-recognizers in Europe, but 
other non-recognizers around the world. The main obstacle for 
many of the countries is they believe that unilateral 
independence creates instability and not stability.
    For some, there are constitutional requirements that it be 
a bilateral agreement. This is one of the reasons why the Ohrid 
Agreement, which was brokered by the European Union, and 
monitored by European Union under European standards, gives us 
the greatest opportunity to advance that cause in the last 15 
years.
    So, as we have done that, we have started to explore that 
not only with the five non-recognizers, but with NATO and the 
European Union as well, to look for ways to foster the 
development--or sorry--integration of Kosovo into those 
structures.
    Now, the one thing that I hear back almost unanimously is 
that they are waiting to see goodwill from Kosovo on the 
implementation of the ASM.
    Mr. Lawler. OK. I yield back the balance of my time.
    Mr. Kean. Thank you, Mr. Lawler.
    I now recognize Mr. Schneider of Illinois for 5 minutes.
    Mr. Schneider. Thank you, Mr. Chairman, and I am grateful 
for the chance to be here.
    Deputy Assistant Escobar, it is good to see you again. 
Again, thank you for your patience, and as always, we are 
grateful for you sharing your sister with us.
    Mr. Escobar. Thank you.
    Mr. Schneider. She is wonderful to work with.
    This has been a very important hearing so far. The Western 
Balkans, effectively, form an island surrounded by NATO and the 
European Union, and our role has to be to work with our 
European allies to facilitate a future in which all the 
nations, religions, and ethnicities of the Western Balkans can 
live side by side in peace and prosperity.
    We know it is not an easy task, and the last paragraph of 
your opening statement I think said it beautifully, but we have 
to make sure that the citizens of the Western Balkans are able 
to see a future for their children and are fully invested in 
it.
    You started to talk earlier and ran out of time--I want to 
give you a chance--you mentioned the two-track Balkans.
    Mr. Escobar. That's right.
    Mr. Schneider. Could you expand on that?
    Mr. Escobar. Yes. Well, look, it would be a mistake to look 
at the Balkans as a single unit. What we have is, we have three 
countries in the Western Balkans who have advanced their 
European candidacy the fastest, who are, not coincidentally, 
members of NATO. They have been very instrumental in supporting 
our efforts to create regional stability--and not just regional 
stability, but European stability. And that is Montenegro, 
North Macedonia, and Albania. And we work very closely with 
them.
    North Macedonia, in particular, was extremely helpful in 
helping us reach the Ohrid Agreement. So, we count on those 
three countries to help extend our reach into the other three.
    Now, we have three others--Serbia, Kosovo, and Bosnia and 
Herzegovina--that are lagging in their efforts to integrate 
into the European Union. I would say that the one thing that 
they have in common is that they have not reached the level 
where the politics, the domestic politics, do not depend on 
ethnic rivalry.
    So, we are working with our European partners and our 
regional partners to find ways to create inter-ethnic 
reconciliation and regional integration. And I would say that, 
without those three members, we would be much further behind 
than we are now.
    Mr. Schneider. Let me build on that a little bit. Ethnic 
groups often view the world as a zero-sum game. One wins; the 
other has to lose.
    Mr. Escobar. Right.
    Mr. Schneider. Is that the case here, and if it is, are 
there ways we can work to demonstrate that it is not a zero-sum 
game, but a win/win for all players, if we can find a path to 
bring more integration?
    Mr. Escobar. And that is our plan. So, one is integration 
into the European Union. So, it will be a benefit for the 
region. It will be a benefit for Europe because these countries 
do have enormous potential economically and socially and 
culturally. And that includes economic integration among the 
region.
    And so, we have been supported by the three NATO countries 
in the Western Balkans in our efforts to promote regional 
economic integration which transcends the ethnic difficulties 
of the region.
    Mr. Schneider. Great. And the other thing, the last 
question I will have, given the time, but you mentioned that 
integration is essential to reducing the influence of harmful 
actors. We have talked a lot about the Russians, about the PRC. 
You also mentioned corrupt local actors.
    Rather than focusing on them, I would like to ask you, are 
there existing or up-and-coming benevolent or strong actors 
that we should be working to build relationships with, looking 
to reinforce and strengthen their position?
    Mr. Escobar. Well, yes. I mean, throughout the region, we 
do have very solid partners who believe in European integration 
and NATO engagement and the fight against corruption.
    And I would say that one of the bright spots in the 
Montenegro parliamentary and Presidential elections is that, 
overwhelmingly, the winners were the ones who were focused on 
those three aspects of their policy.
    Mr. Schneider. Great.
    And with a few seconds left, I know in 2020 Albania hosted 
the Balkans Forum Against Anti-Semitism. Can you tell us a 
little bit about the progress in the Western Balkans in 
countering antisemitism since that Forum and what we should be 
doing to strengthen that going forward?
    Mr. Escobar. Well, I would say, in Central Europe, it is 
always a challenge, but I would say that most of the countries 
in the region have made progress in codifying protections for 
minority groups, in fighting extremism, and working with us, 
particularly on the antisemitism piece.
    Mr. Schneider. Great. Well, I know we have an excellent 
ambassador in Deborah Lipstadt. Hopefully, we can work together 
there.
    I have seven more questions and no more time. So, Mr. 
Chairman, thank you again for allowing me to sit in on this 
hearing.
    And I yield back.
    Mr. Kean. Thank you, Mr. Schneider.
    With no further questions from the members, I want to thank 
our witness, Mr. Escobar, for his valuable testimony and the 
members for their questions.
    Members of the subcommittee may have some additional 
written questions for the witness, and we ask that you respond 
to these promptly in writing.
    Mr. Kean. Pursuant to committee rules, all members may have 
5 days to submit statements, questions, extraneous materials 
for the record, subject to the length limitations.
    Without further objection, this subcommittee stands 
adjourned.
    [Whereupon, at 3:20 p.m., the subcommittee was adjourned.]

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