Disputes—international: Eastern Slavonia, which was held by ethnic Serbs during the ethnic conflict, was returned to Croatian control by the UN Transitional Administration for Eastern Slavonia on 15 January 1998; Croatia and Italy made progress toward resolving a bilateral issue dating from World War II over property and ethnic minority rights; significant progress has been made with Slovenia toward resolving a maritime border dispute over direct access to the sea in the Adriatic; Serbia and Montenegro is disputing Croatia's claim to the Prevlaka Peninsula in southern Croatia because it controls the entrance to Boka Kotorska in Montenegro; Prevlaka is currently under observation by the UN military observer mission in Prevlaka (UNMOP)

Illicit drugs: transit point along the Balkan route for Southwest Asian heroin to Western Europe; a minor transit point for maritime shipments of South American cocaine bound for Western Europe

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