Eastern Slavonia, which was held by ethnic
Serbs during the ethnic conflict between the Croats and the Serbs, 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)

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