This is the 2006 Progress Report for BIH by the European Commission. The report briefly describes the relations between Bosnia and Herzegovina and the Union; analyses the situation in Bosnia and Herzegovina in terms of the political criteria for membership; analyses the situation in Bosnia and Herzegovina on the basis of the economic criteria for membership; reviews Bosnia and Herzegovina's capacity to gradually approximate its legislation and policies with those of the "acquis", in line with a Stabilisation and Association Agreement and the European Partnership priorities. The period covered by this report is October 1, 2005 to September 30, 2006. Progress is measured on the basis of decisions taken, legislation adopted and measures implemented.