080626IT

Page 29990

1 A. The Ministry of Finance implemented government decisions. That

2 was a normal thing to do. In an operative sense, everything was done on

3 a case-by-case basis. For the most part, the ministry was headquartered

4 in Sarajevo in the government offices and that's how it worked.

5 Q. Okay. And I think it also goes without saying that your

6 subordinates reported back to you on their activities so that you would

7 have a broad overview and oversight or knowledge of what was going on in

8 your ministry.

9 A. That was understood.

10 Q. Yes. Now, if we move up to the level of the cabinet, am I also

11 correct in -- if I said that similarly, you would take your direction

12 from the prime minister as head of the cabinet?

13 A. One couldn't quite put it that way. I had to operate under the

14 laws that applied in Bosnia and Herzegovina. Understandably, whenever

15 those laws had to be applied, there would be consultations at government

16 level, perhaps consultations with the prime minister or with whoever

17 happened to be at the time in charge of coordinating all these

18 ministries. But my responsibility was to the law itself. There was no

19 hierarchy in that way in the sense of the prime minister having the

20 powers to give me an order that transcended my understanding of the law.

21 Q. Okay. I think the operative word, and I picked it up in some of

22 the documents as well, is that the various ministries obviously had to

23 coordinate what they were doing in order for the government to function

24 properly; is that correct?

25 A. I just repeat this to be perfectly accurate. There was

Page 29991

1 coordination between ministries that dealt with the economics and this

2 included the Ministry of Finance. Prlic [as interpreted] headed this

3 because he was the government's coordinator for the economy. The

4 coordination body was coordinating all these various positions not

5 necessarily all of the ministries accepted this. Whenever there was any

6 misunderstandings between the ministries and the coordination body then

7 there would be the government to deal with these.

8 THE ACCUSED PRLIC: [Interpretation] There is an error in the

9 transcript. The witness said Mr. Turajlic and line 3, page 4, line 3

10 says Prlic. I was in that position but that was in back in 1989 and 1990

11 and not at the time we are discussing.

12 MR. KRUGER: Thank you to Mr. Prlic.

13 Q. Doctor, is it indeed correct that you did not mean to -- well,

14 you didn't actually refer to Mr. Prlic but to Mr. Turajlic as he has just

15 indicated?

16 A. That's right.

17 Q. Thank you. Now, sir, yesterday, you said that at some stage you

18 had decided that you did not want to be minister any longer. When did

19 you so decide actually, if you think back?

20 A. I decided that I would not be part of the new reconstructed

21 government. If I may just remind you, on the 10th of November, 1992, the

22 new prime minister was appointed. Until the 23rd of December, 1992, or

23 at least that's what I assume, he was busy reshuffling the government.

24 He invited me to become a member of this new government to get involved

25 and my decision was not to join. I think I took my final decision

Page 29992

1 sometime in mid-December 1992.

2 Q. The new prime minister, that was Mr. Akmadzic; is that correct?

3 A. Yes.

4 Q. Now, sir, while you were in Zagreb, from basically sometime in

5 September onwards, is it -- well, first of all, is it correct that at

6 some stage after you went on your trip to Washington, you then ended up

7 in Zagreb and didn't return to Sarajevo for the rest of the year; is that

8 correct?

9 A. Yes. Having left Sarajevo on the 18th of September, 1992,

10 heading the republican delegation off to a conference of the World Bank

11 until the 23rd of July, 1997 [as interpreted], I no longer returned to

12 Sarajevo.

13 THE INTERPRETER: The interpreter is not sure about the year that

14 the witness mentioned.

15 THE WITNESS: [Interpretation] An intervention, there is yet

16 another interpretation error.

17 MR. KRUGER:

18 Q. Yes, could you indicate to us?

19 A. I think there is yet another interpretation error. It reads here

20 that I left Sarajevo on the 18th of September, 1992, which is true and

21 that I never returned until the 23rd of December, 1997, and here it reads

22 the 23rd of July, 1997.

23 Q. Thank you. Now, sir, in the period that you had left Sarajevo,

24 so from September until the 10th of November when Mr. Pelivan was still

25 the prime minister, did you receive any guidance from Mr. Pelivan --

Page 29993

1 JUDGE ANTONETTI: [Interpretation] Just a moment, Mr. Kruger. We

2 have a problem with the transcript. The witness corrected and mentioned

3 the 23rd of December, 1997 [as interpreted], but we still have the 23rd

4 of July, 1997.

5 There was a mistake in the interpretation of my words as well.

6 The witness mentioned the 23rd of December, 1992.

7 THE WITNESS: [Interpretation] That's true. That's what I said.

8 MR. KRUGER: Thank you, Your Honour.

9 Q. So just to be absolutely clear, sir, from the 18th of September,

10 it was October, November, December, so another three months or so that

11 you were -- before you were back in Sarajevo. Or actually you did not

12 return to Sarajevo.

13 A. During my term of office, the remaining three months, I was not

14 in Sarajevo.

15 Q. I think we've got that clear now.

16 Now, sir, during the first period that we're now referring to

17 when Mr. Pelivan was still the prime minister, during that period when

18 you were not in Sarajevo, did you receive any guidance from Mr. Pelivan

19 regarding your duties or responsibilities?

20 A. I physically met Mr. Pelivan at the time in Zagreb. I physically

21 met him, twice, maybe three times. I'm sure about twice though. He was

22 away from Sarajevo on business and of course when we met, I discussed

23 with him my work and my programme. In an operative sense I was in touch

24 with the government through Mr. Turajlic, truth to tell, in whatever way

25 that proved possible at the time, sometimes by phone, it was difficult

Page 29994

1 but sometimes possible or else we would exchange written notes. I wrote

2 notes to Mr. Pelivan, I still keep those, as well as to Mr. Akmadzic

3 after he took over.

4 Q. Did Mr. Pelivan express any concern that you were not in

5 Sarajevo?

6 A. Mr. Pelivan knew what I was doing in Zagreb. He asked me to wrap

7 up the Zagreb business as quickly as possible in order to go back. As I

8 said yesterday when I was answering Mr. Karnavas's questions, I decided

9 to go back to Sarajevo in late October but don't hold me to it. I can't

10 keep all these dates in mind. It's been 15 or 16 years. I think it was

11 in late October. Mr. Turajlic told me to postpone this trip in order to

12 go to the EU to participate in the survival talks, the talks surrounding

13 the so-called survival programme.

14 MR. KARNAVAS: Mr. President, I'm told that on page 6, line 25

15 and page 7, line 1 the witness indicated that he wrote information to

16 Mr. Pelivan not notes. I think there is a distinction between providing

17 information versus notes. Perhaps we can get a clarification on that to

18 which we have an accurate transcript.

19 MR. KRUGER: Thank you, to Mr. Karnavas.

20 Q. Dr. Primorac, you heard what Mr. Karnavas has said. Could you

21 comment on that? Is it indeed just notes or information?

22 A. I can use my documents to furnish proof. It was information,

23 detailed information on my whereabouts, what I did at least as far as it

24 could have been any interest to the prime minister. I would inform him

25 about my contacts, any talks that I held. I suggested decisions for the

Page 29995

1 government to be made for me to press on. Meanwhile, I had spent most of

2 my time working, pushing forward for Bosnia and Herzegovina to join the

3 international monetary fund, the European fund and the succession of the

4 former Yugoslavia. All of these jobs required a lot of preparation, a

5 lot of information and being familiar with all the documents.

6 This was a draining job especially --

7 THE INTERPRETER: Interpreter's note, could the witness please be

8 asked to repeat the latter half of his answer.

9 MR. KRUGER:

10 Q. Sir, the interpreters have difficulty in following you. They

11 asked if you could repeat the last half of your response.

12 A. I said that the jobs that I did required a lot of preparation, a

13 lot of documents, a lot of information. Needless to say, given the

14 working conditions I had in Zagreb, I didn't have any of those. I had to

15 make an enormous effort to retrieve information, to make sure that the

16 information that I sent on to the prime minister was thorough and

17 complete in the sense of knowing what I was to do and in the sense of the

18 government giving me assistance with completing -- in terms of helping me

19 complete my own tasks.

20 MR. KARNAVAS: Again, I need to correct the transcript. I don't

21 know whether it's translation or whether it's the way it's been typed

22 out. It says here on line 8, page 8, line 3, that "the European fund and

23 the succession of the Prosecution." I know that the gentleman didn't say

24 that because one has nothing to do with the other so I don't know where

25 that came -- again, we want to make sure we have a clean record so

Page 29996

1 perhaps if the gentleman could speak slower, maybe enunciate and then

2 maybe we can also try to be as accurate on the other end as well. Thank

3 you. And I'm not trying to cast aspersions to anyone.

4 MR. KRUGER: Thank you, Your Honour. Thank you, Mr. Karnavas.

5 Q. Sir, before it goes off the screen right at the top it says, "the

6 European fund and the succession of the Prosecution." What were you

7 referring to there?

8 A. I will repeat what I said. I worked on jobs that had to do with

9 Bosnia and Herzegovina as a new state being included in the World Bank

10 for Reconstruction and Development, the International Monetary Fund, the

11 European Bank reconstruction and development, and in jobs to do with the

12 succession of the former Yugoslavia.

13 Q. Okay. Sir, the written communications that you sent to the prime

14 minister, how were those transmitted? How did you get them to him

15 physically?

16 A. This may be an unusual term or phrase but let me answer like

17 this: I did this in all sorts of ways. Sometimes it was by courier,

18 there were no official couriers. There were people who travelled to

19 Sarajevo on UNPROFOR planes or they would be coming back from Sarajevo.

20 Normally, those people would pass through the Zagreb office and I always

21 took the opportunity to send the information along with them. Sometimes

22 when satellite phone lines were introduced, it was possible to talk by

23 telephone and more often than not I used this phone line to talk to

24 Mr. Turajlic because it had more to do with what we were doing and it was

25 easier for us to understand each other. It was simpler. Sometimes there

Page 29997

1 were cases where I was able to send a fax which I did whenever I could.

2 Therefore, any form of communication that was available was used for

3 exchanging information.

4 Q. When Mr. Akmadzic succeeded Mr. Pelivan, did you continue this

5 form of communication with him as well?

6 A. Yes, much in the same way as before. I still have documents like

7 that in my file. However, I do have to digress a little when we come to

8 speak of that particular communication between me and him. Pelivan was

9 an economist and Akmadzic was not an economist, therefore, Akmadzic would

10 normally refer me to Mr. Turajlic for any coordination with the

11 government because he was in charge of coordinating the work of this

12 particular ministry, however, I do have documents that I sent to Akmadzic

13 in my files that I still keep.

14 Q. Now, sir, I'd like to turn to a subject which I know is sensitive

15 to you and I do not do this at all to try and embarrass you. I'd like to

16 refer you to Prosecution document P 10467. P 10467.

17 So, this is a transcript of an audio recording of the -- of the

18 178th Session of the Republic of Bosnia and Herzegovina Presidency and

19 this was held on the 21st of December, 1992. Do you have the document

20 before you?

21 A. Yes.

22 Q. Now, sir, at this meeting, the -- one of the main topics of

23 discussion was -- can be summed up if you look at the first place where

24 the president speaks and it's just after Mile Akmadzic, so the president

25 says, "So let's make a change here, namely, with the ministers of

Page 29998

1 national defence, finance, the minister of transport ..." et cetera, do

2 you have that?

3 A. First of all, can I use pencil and secondly, can I scribble notes

4 all over this copy?

5 JUDGE ANTONETTI: [Interpretation] Please go ahead.

6 THE WITNESS: [Interpretation] Can you please direct me again to

7 the relevant paragraph.

8 MR. KRUGER:

9 Q. I think it would be on your first page and it is the first place

10 where the president speaks and he says, "So let's make a change here,

11 namely, the minister of finance -- national defence, finance ..." do you

12 have that?

13 A. My text reads as follows. "Those are the ministries that were

14 before and there is nothing else then ..." is that what I'm supposed to

15 find?

16 Q. Sir, it would be on the first page.

17 A. [In English] Sorry. Sorry.

18 Q. You have it.

19 A. [Interpretation] I'm sorry, I've only just noticed.

20 Q. So you see that you are also under discussion here or your

21 position and there is talk of making a change. Now, sir, at this period,

22 you were also of course not in Sarajevo, you were still in Zagreb.

23 A. That's right.

24 Q. Now, at the bottom of page 3 in the English, and it is also page

25 3 in the B/C/S version -- I wonder if it is page 3. It is where

Page 29999

1 Mr. Mile Akmadzic speaks -- sorry, if we can go just a bit above that

2 where Mr. Ejup Ganic speaks and Mr. Ejup Ganic says, "Let's say a

3 minister has been absent three or four months and nobody at the ministry

4 can do a thing because of the minister's absence." Do you see that?

5 A. Yes.

6 Q. Now, this applies to you in the sense that you were one of the

7 ministers who was absent for three months at that stage. How did your

8 ministry function during your absence?

9 A. I had a deputy in Sarajevo and he ran the ministry in my absence,

10 at least as far as the work that was actually going on in Sarajevo was

11 concerned. And then I tried to explain about the jobs that can only be

12 done outside Sarajevo, all right, so I was in charge of those. I can't

13 be unfair and say that the ministry did not suffer at all because the

14 minister was away. Those were sensitive jobs, that much is certain.

15 However, I don't think that Ganic's statement here makes any other sense

16 aside from its use as propaganda because this same Mr. Ganic travelled

17 with me throughout Europe while I was the finance minister of BH. He was

18 presenting government programmes for collecting supplies and stuff to do

19 with the survival programme that was meant to ensure the physical

20 survival of the population.

21 Q. Just before we move on. I see that the president speaks next and

22 then Mr. Akmadzic speaks. And he says, "I propose," this is talking

23 about the replacement ministers or the new candidates. "I propose four

24 ethnic Croatian candidates, the ones to be proposed by the HDZ. I

25 received the obligation and they were at the HDZ. In fact, only Primorac

Page 30000

1 was not at the HDZ."

2 Sir, the fact that you were not a member of the HDZ, did that at

3 all hamper you in the performance of your duties within this government?

4 A. Formally speaking, no, because the government functioned as an

5 executive body of the Presidency and at the government meetings, no

6 decisions were taken on the proposals based on the membership in certain

7 political party but essentially, I didn't have available political

8 information that could have helped me in my work because I had no contact

9 with the HDZ which in this particular instance represented the Croatian

10 people in Bosnia and Herzegovina.

11 Q. Now, at the top of the next page, that would be the next page in

12 the English -- sorry. It's page 5, I'm afraid. It's the president

13 speaking. He speaks just after Mr. Pejanovic and the president then

14 says, "Is the finance minister present? Really, we have three cases. I

15 don't know even Primorac is absent rightfully, is he? I don't know. You

16 know better." Do you have that?

17 JUDGE PRANDLER: Mr. Kruger, I'm sorry but you said page 5. I do

18 not find -- that particular quotation, I do not find on page 5.

19 MR. KRUGER: Your Honour --

20 JUDGE PRANDLER: On the top of this page -- yes, okay. Thank

21 you.

22 MR. KRUGER: It's page 5 of 8, yes. Sorry. I missed for a

23 moment as well.

24 Q. Just after that, Mr. Ganic says, "No, he is not back yet, he has

25 been ordered to come back."

Page 30001

1 Then Mr. Akmadzic said: "I gave the order, I said if he wants to

2 be in the government."

3 Now, sir, did Mr. Akmadzic contact you around this time?

4 A. Mr. Akmadzic talked to me on several occasions while we were

5 physically in contact when he was out of Sarajevo and I believe that he

6 called me once by telephone from Sarajevo but I cannot confirm this

7 definitely. So he called me once again and proposed that I come back and

8 become a member of the government and as I told you earlier, I had

9 decided not to join the government.

10 Q. And Mr. Ganic, when he says that you have been ordered back, can

11 you comment on that?

12 A. I don't know how Mr. Ganic could possibly know that. He was not

13 my superior and as far as I can remember, he never talked about this

14 subject with me although we were on the road for days. And I explained

15 earlier and I can repeat it again, once I decided to come back after

16 being persuaded -- after the president of the government tried to

17 persuade me and why I didn't go back I can explain again, if necessary.

18 Q. Just before moving on with this document, do you recall yesterday

19 when the Court was looking at Defence Exhibit 1D 02696, and I don't think

20 you need to go into it, this was the work programme of the staff in

21 gathering funds for the needs of the population of the RBiH until

22 30 September 1992; do you remember that work programme? Now, in that

23 work programme, I saw at least two items where you and Mr. Ganic would

24 act together, one was item 5, and that said "Present project to the ECC

25 with Ganic." And item 12 which was to hold talks with the USA and Canada

Page 30002

1 with inter alia Mr. Ganic.

2 Do you recall that that was on the programme?

3 THE INTERPRETER: The interpreters would be grateful if you could

4 be to the right of the microphone.

5 A. I remember this item being on the agenda or part of the

6 programme.

7 MR. KRUGER: Your Honours, if I can just quickly move all my

8 stuff for the benefit of the interpreters.

9 THE INTERPRETER: Thank you very much.

10 MR. KRUGER:

11 Q. Now, sir, with that in mind, if we can turn to the last page of

12 Exhibit P 10467, these are the minutes of the 21st of December and this

13 is where Mr. Ganic speaks again. In the very first part, Mr. Ganic says

14 the following: "Some positions in the government are empty.

15 Zarko Primorac and I were supposed to go to America on 20 September. I

16 was not able to but he left there on 14 September and never came back.

17 We went to Brussels together for a single day. I came back."

18 Now, first of all, this trip to America, that was the one which

19 was listed in the work programme; is that correct?

20 A. Allow me first to read this in order to comprehend the entirety

21 of it. First of all, it is not correct that Ganic and I were planned to

22 travel to America on the 20th September. According to the programme of

23 the government for collecting funds, it is true that he and I were

24 appointed to hold talks in America and Canada by the 30th of September,

25 1992. There was no precise date for our travel, nor had any meetings

Page 30003

1 were organised prior to that.

2 Secondly, I did not leave on the 14th of September to America but

3 I went after the 20th of September. I left Sarajevo for Zagreb on the

4 18th of September and two or three days later after that, I went to

5 America. I think that the World Bank assembly and the IMF was held on

6 the 25th or the 26th of September, 1992. I headed the BiH delegation. I

7 did not go to America based on the government programme in order to hold

8 talks relating to the collection of funds but rather, I went on the

9 instruction of the government as the head of the delegation of Bosnia and

10 Herzegovina for the annual assembly meeting of the bank and the fund and

11 Mr. Ganic was not involved in these talks and I am afraid that he is

12 mixing up things here but that's his problem.

13 Q. Now, sir, just after that, but the fourth line it goes on, he

14 says, "Therefore, these people who went up there, they broke every norm.

15 Believe me, the news will be very well received if we say that we have

16 replaced six ministers who were failing to show up at work."

17 Now, from this, it seems to me that within the cabinet, not

18 everybody was aware of the functions that you were performing as prime

19 minister -- sorry, as finance minister, my correction. Could you comment

20 on that?

21 A. I cannot comment on that for the simple reason that I informed

22 about my work the officials who were relating to me or had connections

23 with me. What they did with that afterwards, I am not aware.

24 Q. Now, sir, just returning for a moment to that work programme,

25 there were three other items on the work programme which was 1D 02696,

Page 30004

1 where you also had assignments -- and you needn't go into them and I

2 would just ask you whether you recall. There was an item which said you

3 had to hold talks with Austria, did you hold any talks with Austria?

4 A. I went to Vienna and talked to a law firm because I had been

5 assigned, given an assignment by the government among other things to

6 open a bank of Bosnia and Herzegovina in Vienna in order to take care of

7 international financial transactions so I initiated talks with a law firm

8 in Vienna to prepare the necessary documents so these are the contacts

9 that I had in Vienna. I had no contacts, however, with any government

10 authorities of the republic of Austria.

11 Q. Okay. Now, if we can move to the Presidency meeting which was

12 held on the next day, and that was the 22nd of December. This would be

13 Prosecution Exhibit P 10496. If you can turn to the B/C/S version.

14 Now, on the -- on page 6 of 8 in the English version, and this

15 would be where Mr. Akmadzic speaks again, and it says, "Zarko Primorac is

16 not in Sarajevo now for three months."

17 Do you have that section?

18 A. I'm looking at page 6. I see that Akmadzic has spoken. Can you

19 please tell me how it begins in English and then I'll find my way

20 through?

21 Q. "Zarko Primorac is not in Sarajevo now for three months."

22 Do you have that, sir?

23 A. Not yet. [In English] I have on page 6, I have Akmadzic.

24 Q. Sir, if you look at the -- sorry. If you look at the -- oh, my

25 goodness. I'm afraid that I didn't check that in the B/C/S transcript.

Page 30005

1 Sir, if I could read to you what it says, there are only short pieces, I

2 would just like your comments on this.

3 Mr. Akmadzic says: "Zarko Primorac is not in Sarajevo now for

4 three months." Now, we know that that is accurate at that stage.

5 Mr. Filipovic, he speaks next and at the end of what he says, he

6 says, "Excuse me, we had situations that certain ministers had never

7 submitted a single report to the parliament."

8 Now, sir, would that apply to you as finance minister during the

9 three months that you were absent?

10 A. [Interpretation] I have to make certain corrections if you allow

11 me, I apologise. I am relying on what you have read and at the time

12 there was no parliament, there was a Presidency. The parliament was not

13 working for the simple reason that it could not convene.

14 Secondly, as a rule, ministers do not submit any reports to a

15 parliament but rather inform the government about their work and it is

16 the government that communicates with the parliament.

17 Thirdly, I have dozens of documents, information and other papers

18 that I sent to the government of Bosnia and Herzegovina. Therefore, this

19 remark of Mr. Filipovic has no relevance and is not correct.

20 Q. Now, sir, I have actually located where this would be in your

21 version. If you look at the top right-hand corner, you will see a big

22 number, 0180 and then if you can find the number which ends with 6590?

23 A. Could someone please assist me with this?

24 MR. KRUGER: Mr. Usher, I do have a loose version of it for you

25 if that would help.

Page 30006

1 MR. KARNAVAS: While this is happening, I trust my friend will

2 also be going into page 7 where Mr. Akmadzic validates what Mr. Primorac

3 testified under oath.

4 MR. KRUGER: Thank you, Mr. Usher.

5 Q. Sir, the only reason I show this to you is you see that

6 Mr. Akmadzic speaks and he says, "Only one thing, all who know me know

7 also that Zarko Primorac is my personal friend and friend of the family,

8 please, and now let me tell you that Zarko Primorac told me that he does

9 not want to be in Sarajevo, that he does not want to be in the government

10 and those of you who had heard something you did not hear it well."

11 Sir, that just confirms what you said earlier that you had

12 decided that you did not want to continue in the government?

13 A. I'm glad that Mr. Akmadzic has said that but still I can't find

14 this piece of text.

15 Q. You heard -- did you hear the translation well and you

16 understood? I think if you turn the page, perhaps, sir. It doesn't

17 matter. You can confirm what I've just said, that is correct, isn't it?

18 A. Will you please be so kind since I was trying to find this

19 particular piece of text, could you please read it to me out again.

20 Q. Certainly, sir. Akmadzic: "Only one thing. All who know me

21 know also that Zarko Primorac is my personal friend and friend of the

22 family." Do you have that?

23 A. I did find it.

24 Q. "Please and now let me tell you that Zarko Primorac told me that

25 he does not want to be in Sarajevo, that he does not want to be in the

Page 30007

1 government." That's correct?

2 A. It is correct that I had told him that I did not want to be in

3 the government. I repeated that several times. At the time I wasn't

4 objectively able to be in Sarajevo and I can explain why. First of all,

5 my flat was devastated and soon after that, I was dismissed from my

6 position in Energoinvest company and therefore I had to look for a job

7 some place else.

8 Q. Now, sir, if we can very briefly just turn to -- this would be a

9 Defence Exhibit 1D 01632 and if I could ask the usher to perhaps provide

10 the binder to the witness again. Do you have the document?

11 A. Yes, I do.

12 Q. This is the document which basically, if I recall correctly, it

13 settles up the final -- the financial obligations towards you; is that

14 correct?

15 A. There is some misunderstanding obviously. The gentleman has

16 given me a completely different document and I have before me the

17 decision to relieve and appoint ministers -- members of the government of

18 Bosnia and Herzegovina and that's I have in front of me.

19 Q. Well, while you have that in front you, sir, yesterday you said

20 that you did not like the word that they used in that. So could you

21 perhaps just tell us why they were using the one word but you prefer the

22 other, this is this dismiss and relieve thing?

23 A. In my mind, it has nothing to do with sacking or in Croatia, it

24 says that they are relieved of their duties which just simply means that

25 they cease to be ministers. This is a normal procedure when you have a

Page 30008

1 reshuffling of the government. Some ministers for various reasons cease

2 to be ministers and the usual term that is used and I think quite rightly

3 and correctly is that these gentlemen were relieved from their duties

4 rather than being sacked or dismissed.

5 Q. Okay. Sir, I'd like to refer you and this is back in the

6 Prosecution binder to P 10503. P 10503. P 10503.

7 A. [In English] 0503.

8 Q. Yes.

9 A. [Interpretation] Can you please tell me which particular document

10 is in question? In front of me, I have P 10503, there's obviously some

11 confusion. Is that the right document?

12 Q. It is a Belgrade Politika article of 12 October 1992. Do you

13 have it?

14 A. Yes, I do.

15 Q. Now, sir, the -- I don't want to spend lots of time on this

16 document, it's not hugely important, but this is also an article about

17 members of the Bosnia and Herzegovina government not being in Sarajevo

18 and then if you look about halfway through the article, it says, "In this

19 way, Sarajevo ceases to be the centre and becomes a deserted city."

20 Do you have that paragraph?

21 A. Yes, I do. It begins "Thereby, Sarajevo will become a deserted

22 place."

23 Q. "And many members of the government have already left it but

24 given the fact that they have been given a deadline for returning, the

25 city on the Miljacka is the scene of political disagreements, aside from

Page 30009

1 the military conflict."

2 "In the difficult times of war," next paragraph, "it is almost

3 humourous to note that no one is hiding from the fact that there is not a

4 single government in the world aside from the Bosnian Herzegovinian one

5 that has the headquarters of its ministries in foreign states." Do you

6 have any brief comment on that?

7 MR. KARNAVAS: Mr. President, if I may object at this point. I

8 don't see the relevance of this. That's number one. Number two, there

9 has been testimony with respect to provisos in the constitution that

10 would allow, based on the All People's Defence, for instance for

11 government offices for relocated in a time of war. Now, I don't want to

12 go into this but I don't see the relevance. The gentleman has already

13 indicated the reasons why. Yesterday, he told us based on the financial

14 institutions he needed means of communications, his flat was deserted,

15 was desecrated or destroyed and so on so forth. We've heard testimony

16 from others. I don't see pulling out a newspaper from Belgrade, from

17 Belgrade of all places, that Politika was the mouthpiece of the Belgrade

18 government to somehow have a discussion here.

19 Now, if we want to have a political discourse, that's fine, but

20 we're here to determine some discrete issues on law, not to have a

21 discussion of what Politika, this Belgrade government mouthpiece had to

22 say at the time. Thank you.

23 MR. KRUGER: Your Honour, I don't belabour this point. I think

24 the point has already been made by the witness. There is one other thing

25 that I would, from this article, just like to inquire from the witness,

Page 30010

1 that is towards the end of the article.

2 Q. It says, "Prime Minister Jure Pelivan, also from the HDZ," do you

3 have that paragraph? It's probably -- about the fourth paragraph from

4 the bottom.

5 A. Yeah.

6 Q. "Prime Minister Jure Pelivan, also from the HDZ, is in Sarajevo

7 together with vice-presidents, Miodrag Simovic, Zarko Primorac and

8 Rusmir Mahmutcehajic." Is that a mistake because this article comes from

9 October of 1992? You weren't in Sarajevo at that stage, just to clear

10 that up.

11 A. Yes, it's certainly a mistake.

12 Q. Just the next sentence, "Does anyone remember Franjo Boras and

13 recall that he is still officially a member of the BH Presidency."

14 Mr. Boras was he still active in government at this stage?

15 A. Mr. Boras was never in government. He was a member of the BH

16 Presidency.

17 Q. And was he still active as a member of the BH Presidency?

18 A. I can't say. I don't know.

19 Q. Now, sir, before stepping on to a new topic, one final thing that

20 I'd just like to ask you. From your testimony, it seems that during your

21 period away from Sarajevo, the last three months of your tenure, you had

22 more dealings with Mr. Turajlic than with Mr. Pelivan.

23 A. I can't physically measure that. It's impossible. Where I tried

24 to explain about the nature of my job objectively speaking, the work of

25 the ministry of finance had more to do with coordinating the economy.

Page 30011

1 Likewise, I have to say that at least twice if not more I physically met

2 Jure Pelivan in Zagreb and discussed my job with him.

3 Q. Sir, let's step on to a new topic and what I would like to

4 explore now with you is the whole issue of the currency and currencies

5 being used in Bosnia and Herzegovina. Now, the first thing that I'd like

6 to ask of you, and this is simply because I don't know how these things

7 work, I'm not an economist or have very little idea of finance but as a

8 minister of finance, would it be one of your responsibilities to protect

9 the value of the official currency?

10 A. No, you can't protect a currency by state decree. It has to be

11 its objective value and the objective value of a currency is driven by

12 the economy behind it. It is true that there are measures that a country

13 can take in order to try and preserve the value of its currency and its

14 purchasing power. This is normally referred to as monetary policies and

15 this is something that the central bank of any country is normally in

16 charge of.

17 The government or the Minister of Finance try to maintain

18 stability by maintaining a balance in a country's economy between the

19 production and consumption, between the various sectors such as private

20 and public. The minister of finance is not directly responsible for a

21 currency's stability but he is a member of a government and any

22 government will try to contribute to a country's stability and the

23 stability of the country's currency always goes some way towards

24 guaranteeing the stability of a country.

25 Q. So as a minister of finance, you would also work closely with the

Page 30012

1 central bank to attempt to at least ensure some stability in this regard?

2 A. I would just like to bring one thing up. The central bank is an

3 independent institution by virtue of its nature; it's independent from

4 the government. Were this not the case, the government could always end

5 up spending a lot more than it should. There is no government that

6 doesn't wish to spend more in addition to the fact the central bank was

7 independent and was answerable to the parliament and not the government

8 it was true that there was a degree of coordination between the ministry

9 of finance and the bank.

10 More often than not, there wasn't a lot of understanding shown

11 between the two. They would be at logger heads more often than not, the

12 ministry wanted to spend as much as possible and the bank wanted to spend

13 as little as possible in order to preserve the stability of the currency.

14 Q. During your tenure as finance minister, the governor of the bank

15 was Mr. Stiepo Andrijic?

16 A. Correct.

17 Q. Now, sir, the levels of currency, would it be the responsibility

18 of the central bank or would you also have an interest in ensuring that

19 there is sufficient currency or cash in circulation in a country and not

20 too much?

21 A. That is the principal task of the central bank.

22 Q. This task, just to understand it, perhaps, does that entail that

23 if there is too much currency in circulation, that that means too much

24 buying power and too few goods to go around? How does that work? Why is

25 that important?

Page 30013

1 A. It's important in order to keep the prices stable within the

2 country and this makes sure that the whole system remains stable. Are

3 there conditions for inflation, for example? That's normally when prices

4 go up, that's what you call it and this is no use to anyone. The central

5 bank in its own policies and in its projected policies sets certain rules

6 by saying, over the next year, I will use these channels or those

7 channels to put so much money into circulation in a bid to maintain some

8 sort of a balance. Normally, there is a council of governors or a

9 national bank council that approves this. In this regard, they are

10 independent institutions, true enough, but they are under an obligation

11 to submit annual reports on their work to the country's parliament and

12 the parliament says this is good or this is no good and they only answer

13 to the parliament. Again, I'm saying at an operative level there has

14 been coordination between the government and the bank, nonetheless, the

15 bank remains independent.

16 Q. And is it also important to keep control over the levels of

17 foreign currency in a particular state in a country?

18 A. Obviously. Any central bank is not only responsible for

19 preserving stability within a country in terms of domestic currency. It

20 is also responsible for ensuring liquidity in terms of foreign currency,

21 as they say. It must make ensure that the country and all its subjects

22 are able to make foreign payments or pay for any commitments which means

23 that they need to have projected foreign policies in terms of foreign

24 currency. Okay, it is in this field that we did a lot more cooperation

25 with the ministry than elsewhere.

Page 30014

1 Q. Now, I picked up, sir, somewhere that you used a very interesting

2 simile and is it correct that there must be confidence in a currency and

3 you said it's kind of like a religion, you need confidence in the

4 religion to believe in it. I suppose my question is: Is confidence in

5 the currency an important factor?

6 A. I would call that paramount especially in today's conditions when

7 all the currencies, all the world's currencies are just paper but there's

8 no internal value. The paper is only worth what it's used for and the

9 paper is only used in currency because it is rubber stamped by a certain

10 country, the country then goes on to say this is our currency, this is

11 how payments are made. Psychological factors are of paramount importance

12 in the monetary world, expectations, confidence and so on and so forth.

13 Confidence in a currency is a paramount factor in determining its value.

14 Q. Now, with that as a basis, in time of war as you were facing the

15 situation you were in as finance minister, is it correct that there was

16 indeed a shortage of cash in Bosnia and Herzegovina or currency, rather?

17 A. Quite the contrary, we had too much cash. I'll try to explain

18 this. While the Yugoslav dinar was still in circulation as the official

19 currency of Bosnia and Herzegovina, Bosnia and Herzegovina as a country

20 couldn't get away from that channel of monetary supply. We would get our

21 money from Yugoslavia's central bank.

22 The dinar was affected by galloping inflation and the presses

23 were working at full tilt producing money 24 hours a day. The

24 denominations kept getting bigger and bigger and there was more and more

25 money. We tried to protect ourselves from this, and I do have a document

Page 30015

1 to this effect, from this flood of money coming from outside the Republic

2 of Bosnia and Herzegovina by ordering that all the bank notes of the

3 former Yugoslavia be stamped one day, that they be marked. Wherever --

4 may I continue, please?

5 So these bank notes were marked or stamped whenever possible.

6 But this didn't help stem the flood of money from outside because I think

7 they produced these stamps elsewhere too, and when using them, we

8 realised that this measure was to no avail. And then finally, we decided

9 to introduce our own money. Although I might say that, at the time, this

10 was a political decision and this political decision to introduce BH

11 money was made before I became a member of the government and then I

12 operationalised the idea.

13 JUDGE MINDUA: [Interpretation] I'm sorry, Mr. Kruger.

14 Witness, I didn't want to intervene but I don't understand what

15 you mean. Yesterday, you said there was no money left to the point when

16 you had to bring some but the UNPROFOR couldn't guarantee the delivery so

17 you used coupons. Today, you're saying that there was too much cash in

18 circulation. Maybe I misunderstood what you said. Could you help me

19 understand better your testimony?

20 THE WITNESS: [Interpretation] I was talking about a period when

21 Bosnia and Herzegovina and its monetary system were still connected to

22 the Yugoslav dinar and Yugoslavia's central national bank, that is

23 Belgrade, that's before our own BH money was introduced. I was talking

24 about a period when large amounts of cash were coming in from that source

25 and being devalued all the time.

Page 30016

1 What you're talking about, Your Honour, is something that is

2 about later on when we decided to print our own money but we could not

3 bring it into Bosnia because UNPROFOR refused to help us with that.

4 JUDGE MINDUA: [Interpretation] Thank you very much.

5 MR. KRUGER: Thank you, Your Honour.

6 Q. So, sir, when the BiH dinar was introduced, the Yugoslav dinar

7 was then basically -- was the Yugoslav dinar a problem or the flood of

8 the Yugoslav dinars, was that to a certain extent aggressed or the

9 problems created by the flood?

10 A. I'm sorry, I don't think I understood your question.

11 Q. When the BiH dinar was introduced on the 17th of August of 1992,

12 it was introduced at a level of 1:10 in relation to the Yugoslav dinar.

13 Did that to a certain extent regress the problem with this flood of

14 Yugoslav dinars coming in and creating problems?

15 A. Maybe in part and maybe at first. I have to tell you more about

16 what the situation really was. The BH dinar was introduced as the

17 official BH currency, the objective being to achieve circulation

18 throughout BH territory. But we couldn't bring it into Sarajevo and we

19 used coupons in Sarajevo, rather, the bank had it replaced by coupons.

20 You remember perhaps yesterday we read that decision by the national

21 bank, the coupons were only valid throughout Sarajevo's territory.

22 In other parts of the Republic of B & H as the Yugoslav dinar had

23 been invalidated, the remaining territories were now without a currency.

24 They did whatever they could. Some printed their own coupons, some used

25 German mark and someone used something else, therefore the situation was

Page 30017

1 very complex.

2 Back to your question about the BH dinar, did that help stop the

3 flood of money that was coming from Belgrade. That was only at first,

4 but very soon this new currency was affected by inflation as well and it

5 only existed as money that was actually used for no more than a couple of

6 months.

7 Q. Now, how does it happen then that in addition to the official

8 currency, certain other currencies as, for instance, the Deutschemark

9 becomes a currency of use in a particular area?

10 A. The Deutschemark was a much loved currency in Bosnia and

11 Herzegovina and throughout the former Yugoslavia before its break-up

12 owing to the fact that this was a stable currency and owing to the fact

13 that a lot of migrant workers from Bosnia and Herzegovina and Croatia

14 worked in Germany made sure there was a steady supply of those to the

15 Yugoslav market. This was a situation where there was no other currency

16 available so people tried to use whatever they had for their payments.

17 To all practical intents, late in 1992 and early 1993, in Bosnia and

18 Herzegovina or at least the part that I'm talking about, one used cash

19 more often than not, one used the Deutschemark.

20 Q. So the use of the Deutschemark was a pragmatic occurrence or it

21 was dictated by the circumstances as it were?

22 A. Yes, this was something that was a result of the circumstances

23 that prevailed, I agree with you.

24 Q. To make the dinar an acceptable currency to use, would it have to

25 be cleared with the central bank in cooperation with the finance

Page 30018

1 ministry, perhaps?

2 A. I explained yesterday about the introduction of the BH dinar.

3 First, at some level of the Presidency there was a political decision to

4 replace the Yugoslav one and introduce the new BH dinar. And then at

5 government level when I was a minister in that government, the law was

6 passed on this new currency saying the former Yugoslavia's currency was

7 now no longer valid and now we had a new currency issued by the BH

8 national bank and there were regulations about it and a whole lot of

9 other things, too.

10 Then the national bank, because that's what it did, implemented

11 this by actually getting the money printed and putting it into

12 circulation wherever possible.

13 Q. But in order for the Deutschemark, for instance, to be legal

14 tender with -- on the territory of the -- of Bosnia and Herzegovina in

15 cash transactions, would the central government need to know about this

16 or have some involvement and make it legal or acceptable?

17 A. The Deutschemark was never officially recognised as Bosnia and

18 Herzegovina's currency. It was used before the war for the purposes of

19 something that one could have described as the black market or the grey

20 market, if you like. According to foreign currency regulations that

21 applied before the war, anyone coming into possession of the Deutschemark

22 or any other foreign currency under the rules of the game had to have

23 that currency exchanged for the Yugoslav dinar because that was the

24 currency used for payments in the former Yugoslavia.

25 Nevertheless, where monetary issues are concerned, the market

Page 30019

1 always follows its own logic. People would keep the Deutschemark.

2 People would have savings in Deutschemark, in foreign currency.

3 Unfortunately, that came to nothing later on but people tried to put

4 themselves in the safe side as it were. There was a lot of cash flowing

5 where the Deutschemark was used before the war, but once the war began,

6 this grew and was now on a massive scale because there was no other

7 currency to be used. It was never official apart from some areas but

8 just to make one thing perfectly clear, Deutschemark was never at any

9 point in time recognised as the official currency of Bosnia and

10 Herzegovina.

11 Q. Was it at any stage officially recognised as a -- we could

12 perhaps call it a parallel currency in addition to the BiH dinar for

13 pragmatic purposes?

14 A. If you're asking me about Bosnia and Herzegovina as a whole, and

15 the government, and if you're inquiring about the period of time during

16 which I worked as minister, the answer is no, it was never recognised as

17 a parallel currency. I was vaguely aware of such cases outside of

18 Sarajevo in some areas, in some areas that recognised the Deutschemark as

19 their official currency but it only pertained to those areas.

20 Q. Now, sir, if -- in order to recognise, for instance, the

21 Deutschemark as a parallel currency in Bosnia and Herzegovina, would it

22 have been necessary to coordinate this with the German authorities, for

23 instance?

24 A. I can give you a general answer. Whenever you are introducing a

25 foreign currency in your own country, you must have authorisation from

Page 30020

1 the country where this currency is originally used. The reasons are both

2 theoretical and practical. If you take someone else's money and you now

3 recognise it as your own you must have a source available to you and what

4 is the source? The source is obviously the country where this currency

5 is officially used, produced and printed.

6 JUDGE ANTONETTI: [Interpretation] [Previous translation

7 continues] ... to intervene but it's a very technical subject. It seems

8 to me that the role of the World Bank, of the International Monetary

9 Fund, the IMF, must have had consequences on the currency in Bosnia and

10 Herzegovina. You told us that you attended some meetings of the IMF. So

11 what was the position of the IMF towards your currency? Did you receive

12 recommendations, suggestions on the way to solve that problem?

13 THE WITNESS: [Interpretation] Of course those issues were debated

14 especially with the IMF because it's the central monetary institution for

15 international purposes, in a way. It regulates the relationships between

16 various currencies, their values and so on and so forth. The World Bank

17 is linked to this but not directly. It helps countries rebuild and

18 develop thereby increasing the value of that country's currency. But let

19 me go back to the International Monetary Fund. The former Yugoslavia

20 broke up and there were now a number of new emerging countries, Slovenia,

21 Bosnia and Herzegovina, Croatia and Serbia and Montenegro were still

22 together and Macedonia. These countries were not members of the IMF yet.

23 We were talking about becoming members because we were now an independent

24 state. The fund in principal agreed to this in political terms but they

25 wanted us to sort out our responsibilities to the fund.

Page 30021

1 The former Yugoslavia owed money to the IMF. In order for us to

2 become a new member, we had to assume some of the commitments of the

3 former Yugoslavia and sort this out with the fund in one way or another

4 by simply paying back or doing something else about it. This was a

5 torturous process allocating these debts to the former republics who owed

6 what and such like. We could not expect any official recommendations

7 from the fund at a time. They were in a position to make friendly

8 suggestions, perhaps, but not to offer any official views or positions;

9 therefore, these ongoing consultations with the IMF were something that

10 was a matter of friendly consultations and no more than that until such

11 time as we actually became a member of the IMF.

12 JUDGE ANTONETTI: [Interpretation] What did they tell you? What

13 did they suggest?

14 THE WITNESS: [Interpretation] The IMF is primarily interested in

15 the stability of a country's currency and its rules stipulate conditions

16 under which the IMF will intervene, so to speak, in a country in order

17 not to depreciate the currency of a specific country more than what is

18 necessary. Any devaluation of a currency exceeding 10 per cent per annum

19 must be approved in a certain way by the IMF so their advice given to us,

20 if I remember correctly but I have notes, was to -- if we want to

21 introduce our currency, we should strive to maintain its stability to

22 make it convertible as soon as possible and to introduce it into

23 international transactions also as soon as possible.

24 JUDGE ANTONETTI: [Interpretation] Thank you. Mr. Kruger, we're

25 going to break for 20 minutes now.

Page 30022

1 --- Recess taken at 10.30 a.m.

2 --- On resuming at 10.53 a.m.

3 JUDGE ANTONETTI: [Interpretation] Mr. Kruger, according to our

4 calculations, you should have one hour and five minutes left without

5 inflation.

6 MR. KRUGER: Thank you, Your Honour.

7 Q. So, sir, still on the issue of selecting a parallel currency or

8 implementing a currency parallel to that of your own currency, if that

9 were to be done, would the stability of the parallel currency be an issue

10 of importance?

11 A. I'm not quite sure that I understand your question but I will try

12 to tell you this. A country may introduce a parallel currency but, of

13 course, always with the approval of the country whose currency is being

14 adopted as a parallel means of payment. And quite understandably, these

15 countries, although this is very rare nowadays, this applied much more to

16 the time when we had coins and silver and gold but I do not rule out this

17 possibility even nowadays.

18 In such a situation, the country introducing a parallel currency

19 is very much interested to preserve its own currency as well as the

20 originating country of the parallel currency to preserve its own

21 currency. That applies to any country in the world.

22 Q. A government deciding to take such steps, is it safe to assume

23 that that government would opt for a stable currency so as not to import

24 all kinds of inflation from outside its borders suffered by a different

25 currency?

Page 30023

1 A. Yes, you are probably right. If anyone wishes to introduce a

2 parallel currency, it is only reasonable to introduce a currency that is

3 more stable than the domestic one.

4 Q. Now, sir, if I could refer you to Prosecution Exhibit P 10501.

5 P 10501. If you can turn to the B/C/S version. This is a report of the

6 RBiH Armed Forces Supreme Command and it's dated the 6th of September.

7 And the title page says, "Please find attached the Republic of Bosnia and

8 Herzegovina Armed Forces Supreme Command Staff report on the conditions

9 and system of financing of the Republic of Bosnia and Herzegovina Armed

10 Forces."

11 If we turn to the next page, the actual report, it says,

12 "Subject -- and then the first paragraph after subject, do you have that?

13 It says, "We hereby inform you ..." sorry, this is Sefer Halilovic who

14 wrote this. He says, "We hereby inform you that the Republic of Bosnia

15 and Herzegovina National Bank has still not enabled access to the funds

16 from the approved budget for the OS RBiH financing, armed forces

17 financing." Did you know anything about this or about this problem?

18 A. I was definitely aware that there were huge problems in financing

19 the army of Bosnia and Herzegovina. I do not remember this particular

20 document but since my name is mentioned therein and since it's dated the

21 4th September, 1992, I presume that I had an occasion to see it at the

22 time.

23 Q. Yes. Just for the record it was also addressed to you as we see

24 on the last page, Ministry of Finance, Mr. Zarko Primorac along with

25 Mr. Jure Pelivan and the RBiH National Bank, Mr. Stiepo Andrijic; is that

Page 30024

1 correct?

2 A. I don't know whether this document was delivered to others. I

3 see that there are four addressees. It is probably delivered to me

4 and -- because this was a normal way of communication.

5 Q. Now, in the English translation, it's marked as page 4, and in

6 your version it would be the paragraph just above where there is a whole

7 list of figures marked in BH dinar. I'd just like to ask you about this

8 paragraph which starts with, "As the financing system cannot keep on

9 functioning this way ..." do you have that?

10 A. Yes, I do.

11 Q. "And since the RBiH National Bank has still not signed the

12 agreement on utilisation of the budget funds with the RBiH government, we

13 deem that this problem needs to be solved immediately."

14 Now, my question is it's a time of war and the defence force

15 needs to be funded, it's probably an issue of national security or

16 paramount national security. What was this delay, then, in signing an

17 agreement which would release funds?

18 A. I apologise for taking a few minutes to explain the situation

19 because otherwise I cannot answer your question, if you allow me to give

20 this explanation then my answer will make sense.

21 When I became the minister there was no budget in the state

22 because it was at war. We, if you remember, we mentioned that yesterday,

23 we had adopted a decision on how to finance a country at war. Based on

24 that decision, and when I say "we" I mean the government and the

25 Presidency, we in the Ministry of Finance prepared a budget. Just like

Page 30025

1 any other budget, it had the expenditure and the revenue sides. Based on

2 the best available information at the time, we made the calculation of

3 expenditure and -- but when we came to the sources of how to finance this

4 expenditure, we realised that we had very little funds available because

5 simply there were no taxes, there were no customs duties, there were no

6 other sources of state revenues. So these expenditures could only be

7 financed by issuing new money, that means printing money by the national

8 bank of BH.

9 The printing of money is a job which means that if you -- there's

10 nothing, no commodities that you can buy with this money is a fruitless

11 job, you are just issuing worthless paper that cannot purchase anything.

12 We tried to explain to the army of Bosnia and Herzegovina that we can --

13 and when I say "we" I'm also speaking on behalf of the governments of the

14 national bank. We can issue as much money as we can with the bank notes

15 with certain denominations but they would be useless.

16 Okay, for a certain period of time, they accepted coupons and

17 paid their expenditure with that for as long as there was commodities on

18 the market to be purchased; however, when the commodities disappeared,

19 nobody wanted to accept these coupons. Therefore, the army was right in

20 protesting and we also could have printed as many coupons as we wanted

21 but they also lost their value.

22 As far as the goods were concerned, the budget was established

23 for the period of three months, let us say until the end September. That

24 was how it was.

25 Q. If we turn to -- just look at the same document, the third

Page 30026

1 paragraph of the document, so just a bit above the bit that you read now.

2 It would be on your previous page. The one to the third paragraph around

3 about the middle, there is reference to "As well as the introduction of

4 the Bosnia and Herzegovina dinar currency while the payment transactions

5 in currencies that are not legal payment instruments in the territory of

6 RBiH are being strengthened (Croatian dinar and German mark) the

7 introduction of a single currency is prevented as well."

8 Then it says, "The functioning of the armed forces and equipping

9 of units' salary, payment, is delayed which is creating dissatisfaction

10 amongst members of the armed forces. The trust in the BH currency is

11 being lost causing the establishment of the black market exchange rate

12 which has reached the value of 700 to 1.200 BHD for one German mark."

13 Now, sir, the first question on this, perhaps if you could just

14 once again comment on transactions in currencies that are not legal

15 instruments on the territory of RBiH?

16 A. I don't know if I can add anything more to what I already said

17 but just for further clarification, under such conditions which are

18 unstable and catastrophic, people psychologically try to turn to more

19 valuable things. They try to have in their hands something which is of

20 more worth. Of course the currency mentioned here, the Croatian dinar

21 and particularly the German mark were worth more at the time than the BH

22 currency and in that sense, the people tended to have these currency as

23 preferable currencies. It had nothing to do with national feeling, it

24 was pure interest.

25 Q. Okay. Let's move on to a few other documents. Let's have a look

Page 30027

1 at Prosecution Exhibit P 00258. I think it would be the first document

2 in your binder. This is a document of 15 June 1992, and it's president

3 of the municipal Crisis Staff Josip Boro who wrote this, it's in

4 Kiseljak, and the decision says, "The Croatian dinar is hereby introduced

5 on the territory of the Kiseljak municipality as the currency of account.

6 Other currencies can be used as an instrument of payment as well."

7 My first question, I don't know this may be a translation issue

8 but is it significant that it says "the Croatian dinar is introduced as

9 the currency of account"?

10 A. Excuse me, what is your question?

11 Q. The English says, "The Croatian dinar is introduced as the

12 currency of account ..." and then other currencies may be used as well.

13 I was just struck by the Croatian dinar it doesn't say is introduced as

14 "a" currency.

15 A. If we are to interpret this decision literally, this decision is

16 pointless from the point of view of monetary theory and practice but let

17 me tell you how I understand it. They said that the Croatian dinar was

18 introduced as a currency of account which means as the basis for

19 calculation not a means of payment. Any currency primarily functions as

20 a means of payment which means that every liability can be settled in

21 this currency. There are so-called clearing currencies which are not in

22 circulation. Let me give you an example. Before the war, the former

23 Yugoslavia had the so-called clearing account with the USSR and the

24 clearing currency under this agreement between the two countries was the

25 US dollar. Therefore, the US dollar was not the currency for payment

Page 30028

1 transactions between the two countries but as a kind of stable benchmark

2 for calculating the accounts between the two countries.

3 This is what this decision says about the Croatian dinar

4 specifying it as a clearing currency whereas other currencies can be used

5 as legal tenders.

6 Q. Okay. Still on this topic then. If we look at the next

7 document, P 00281, the very next document in the binder. And this is a

8 decision by Mr. Jadran Topic, president of -- or signed by him, president

9 of the Mostar HVO and it's dated the 24th of July, 1992. It says, "This

10 decision adopts the Croatian dinar as means of cash payment."

11 MR. KARNAVAS: Before we go to that, just a technical issue. I'm

12 told that our witness indicated -- and this would be on line 22 of page

13 40 where he talked about this is what this decision says about the

14 Croatian dinar specifying it as a clearing currency whereas other

15 currencies can be used as -- for payments, here it says legal tenders. I

16 just want to make sure that we have a clear translation and a clear

17 transcript so perhaps we can get some clarification on that or is it the

18 same?

19 MR. KRUGER: Thank you.

20 Q. Sir, you have heard the intervention. Could you perhaps just

21 clarify that for us?

22 A. I have to go back to this previous decision taken by Kiseljak

23 municipality. It has two parts as you can see. The first sentence says

24 that in the area of Kiseljak municipality, the Croatian dinar is being

25 introduced as a clearing currency and as the means of payment other

Page 30029

1 currencies can be used as well. And in that respect, the decision,

2 although it's incomplete, is quite clear. The Croatian dinar serves as

3 the clearing currency whereas the other currencies, the German mark or

4 some others can be used as a means of payments and that's a big

5 difference between the two. The clearing currency is not an effective

6 currency, it just serves to settle the accounts and calculations between

7 companies and it does not appear as the means of payment in the

8 transactions. And as I understand the second part, other currencies were

9 to be used to effect payments and that's what I said.

10 Q. Just before moving then to --

11 JUDGE ANTONETTI: [Interpretation] One moment, Mr. Kruger. It

12 just so happens -- it's a miracle but there is a French translation of

13 the document. I don't know where it comes from. It may be done -- may

14 have been done by CLSS but the French translation does not say that or

15 exactly the same. I'm going to read out slowly what is written here.

16 "The Croatian dinar is introduced as unit of account in the territory of

17 the Kiseljak municipality. Other currencies may also be used as payment

18 units or instruments."

19 THE INTERPRETER: The interpreters don't have the text in either

20 language.

21 JUDGE ANTONETTI: [Interpretation] So the French version says that

22 the Croatian dinar can be used as a unit of account but that other

23 currencies can be used as payment instruments. So that's not quite the

24 same thing, not quite the same as the English version. Because when you

25 use the article "the" in front of currency, it seems to imply something

Page 30030

1 else.

2 MR. KRUGER: Thank you, Mr. President. It appears that the

3 French translation as you have read it does then also accord with what

4 the witness has said, a unit of account or a benchmark.

5 Q. Sir, on this, before moving to the next document, perhaps, if a

6 benchmark is introduced as the been done here in Kiseljak, would it make

7 sense to choose as your benchmark a stable currency?

8 A. I can only guess that. I can't give you an answer.

9 Q. But would your guess be that if you had a choice between the

10 German Deutschemark and the Zimbabwe dollar, which one would you choose,

11 to make it very dramatic?

12 A. I would choose the better one.

13 Q. Thank you, sir.

14 Let's move to the next document. This is P 00281. This was the

15 president of the Mostar HVO, Mr. Jadran Topic and in this decision,

16 24 July, he says, "This decision adopts the Croatian dinar as means of

17 cash payment in Mostar municipality."

18 So my first question: This is a step further than what we saw

19 with the previous document. This is not only setting the dinar as a

20 benchmark or the Croatian dinar, it's making it a cash payment currency.

21 A. Excuse me, what is the question?

22 Q. This decision, is this different than the Kiseljak decision which

23 only instituted Croatian dinar as a benchmark, this decision actually

24 institutes the Croatian dinar as a means of cash payment?

25 A. I have to be more explicit again. Both these documents are legal

Page 30031

1 documents and probably their interpretation and their legal meaning

2 should be done by someone who is a lawyer by profession. That's the

3 first thing. Secondly, neither of these decisions -- and please bear

4 that in mind and I will continue from my aspect which is the monetary

5 aspect, to try to understand these two decisions.

6 In my view, neither of these socio-political communities as they

7 were used to be called which are now municipalities had no any legal

8 basis for introducing a different currency in the area of Bosnia and

9 Herzegovina; however, once they've done that, and I think there was no

10 legal basis for that, and if that is the case, then these decisions are

11 null and void. But from the monetary point of view, if such a decision

12 is taken and if something is to serve as money regardless of how it is

13 called in some other country, then this kind of decision must contain at

14 least five stipulations and that is: First, a certain currency should be

15 declared withdrawn and invalid. Secondly, that a new money called this

16 and this is being introduced and that all the monetary values in the

17 territory in or in a country shall be recalculated and translated into

18 this new currency unit. This should also stipulate how these ratios are

19 going to be calculated and also to specify the source of this new money.

20 These decisions contain none of these stipulations and if you

21 want me to compare this decision to the previous one, it means a step

22 forward but it lost another meaning, it just says that the Croatian dinar

23 is going to be used as means of cash payment. Money means much more than

24 cash payment, it has other functions as well which are more important.

25 Q. Sir, in light of what you have just said, could we look at the

Page 30032

1 next document, that is P 00447. This is a decree signed by the president

2 of the HVO, Dr. Jadranko Prlic and it's dated 22 September 1992. The

3 decree is on the regulation of payment transactions in Croatian dinars on

4 the territory of the Croatian Community of Herceg-Bosna during the

5 immediate threat of war or state of war.

6 Article 1, "This decree prescribes the regulation of payment

7 transactions in Croatian dinars ..." et cetera, et cetera. In light of

8 what you have said with regard to the previous two documents, could you

9 comment on this third document?

10 A. I commented yesterday in chief on this document. Again, my role

11 is to comment and no more. I repeat what I said before in terms of its

12 substance from a purely monetary aspect, this document is not a document

13 based on which somewhere in some country, some territory, one could

14 accept a different currency for making payments but I do have to make

15 another general observation. Knowing about monetary theory and knowing

16 about finances in general, Herceg-Bosna, the Zenica district, the Tuzla

17 district, the Bihac district might as well not have written down a single

18 word concerning money, might have adopted not a single document. Life

19 would still have gone on and the same thing would have happened more

20 likely than not.

21 Therefore, all decisions of this kind are to some extent formal

22 and no more than that.

23 Q. Sir, all of these -- or these three documents that we've just

24 been talking about, were any of these documents cleared or notified to

25 your ministry?

Page 30033

1 A. The first two documents, I can tell you that I've never seen them

2 before. And this document from the Croatian Community of Herceg-Bosna

3 office, I saw this after I left Sarajevo which may have been sometime in

4 October 1992.

5 Q. Sir, yesterday, we looked at the law regarding socio-political

6 communities. Is it correct that decisions taken by or measures

7 implemented by socio-political communities still had to be done in

8 coordination with the central government?

9 A. It would be normal to assume that all the BH laws that applied

10 had to be coordinated but you must bear in mind the conditions under

11 which we worked. For months at a stretch, there would be no

12 communication at all.

13 Q. Now, sir, let's have a look at document P 02663. These, sir, are

14 minutes of the 182nd Session of the Presidency of the Republic of Bosnia

15 and Herzegovina held on 26th December, 1992. You have it in front of

16 you. Now, if we can go to the last page of the decision, and it's also

17 the last page in the translation -- sorry, not decision, the minutes, do

18 you see the place where Mr. Mile Akmadzic speaks? And he says the

19 following: "Just to say this, that the Presidency is at the same time --

20 of course, the government proposed this but with respect to financial

21 help, we are in big trouble. We are practically printing money. We are

22 in a very serious situation and I think that we will have to put this on

23 the agenda one day. First on the government agenda and the Presidency

24 agenda but we of course -- the economy does not work. Every such demand

25 means devaluation."

Page 30034

1 Then Ejup Ganic says, "Last time when I was there, I saw that

2 (Croatia) the exchange rate was -- went 50 per cent up."

3 And then Mile, I take it that would be Mile Akmadzic says, "We

4 devaluate the Croatian currency. We devaluate the Croatian dinars, that

5 is to say Herzegovina, the area from where the Croatian dinars comes

6 from."

7 MR. STEWART: Excuse me, could we just check the reference? It

8 doesn't seem to be that number at all. There's -- something quite

9 different is coming up. The number we got was 2663 but that doesn't seem

10 to be the right document.

11 MR KRUGER: [Microphone not activated]

12 MR. STEWART: It's 1D. The transcript showed P. Yes, all right.

13 That explains it, thank you.

14 MR. KRUGER: That's my mistake. I got carried away. It's

15 Defence Exhibit 1D -- thank you to Mr. Stewart, apologies to the Bench

16 and everybody else for the confusion. Does everybody now have the

17 document? The reference is on the final page of the translation marked 7

18 of 7 where Mr. Mile Akmadzic speaks. And he says, "With respect to

19 financial help, we are in big trouble. We are practically printing

20 money. We are in serious situation and I think that we will have to put

21 this on the agenda."

22 Ejup Ganic says, "Last time when I was there, I saw Croatia. The

23 exchange rate went 50 per cent up."

24 And Mile Akmadzic says, "We devaluate the Croatian currency. We

25 devaluate the Croatian dinars, that is to say Herzegovina, the area from

Page 30035

1 where the Croatian dinars comes from."

2 Now, sir, my question to you on this and this was just after you

3 left the government or your position, but it seems to me that the

4 Croatian dinars present within Bosnia and Herzegovina was creating

5 certain troubles for the government. Do you read this like that as well

6 or could you comment on it?

7 A. It's very difficult for me to comment on someone else's

8 statements, people who are not sufficiently familiar with the area but

9 I'll still make a couple of observations.

10 The Croatian dinar was also a provisional currency at the time.

11 After gaining independence, Croatia introduced the Croatian dinar. It

12 was at first a monetary coupon, the same as that issued by the BH

13 government except it was designed much more beautifully, the pattern was

14 better, the paper was much better quality. I can show you the bank note

15 bearing the signature of the minister of finance of Croatia not the

16 governor of the national bank. It was the ministry of finance that

17 produced this provisional currency. It couldn't issue the permanent

18 currency at the time for several reasons. It didn't have the foreign

19 currency reserves and it couldn't make sure the monetary system would be

20 working in a legal way and all this money that was making it to Bosnia

21 and Herzegovina was money that did not have a set value. It was more

22 valuable than the Bosnian dinar otherwise the republic would not have it,

23 but it was a provisional currency. And if you track down the serial

24 numbers of all notes those bank notes you can check that.

25 The money lost value. The Bosnian did and the Croatian money did

Page 30036

1 not so quickly, not at the same pace, not so dramatically but it did.

2 And in 1994, Croatia replaced this provisional currency by a new

3 permanent currency, the Croatian dinar and this was issued by the

4 Croatian National Bank and that's how long the official Croatian currency

5 has been in existence -- and what people are saying about this money

6 being valued or devalued -- well, certainly, and this went quickly for

7 the reasons that I've just tried to explain.

8 THE INTERPRETER: Interpreter's note: Could the witness please

9 be asked yet again to slow down. It is impossible to ensure an accurate

10 record.

11 JUDGE PRANDLER: I'm sorry again to say it. It may happen that I

12 am really maladroit, but I really -- I couldn't find even in the binder

13 of the Defence that very paper and -- but, again, now I -- the President

14 shows me the other paper that is the Prosecution's but it is where we

15 first didn't find it and we were told that it is a D document, that is

16 Defence.

17 MR. KHAN: Your Honour, if it assists, it is a D document but the

18 Prosecution have thoughtfully included it as the last document in their

19 file.

20 JUDGE PRANDLER: I see. Yes. Okay. Thank you.

21 JUDGE ANTONETTI: [Interpretation] Witness, I'm waiting for my

22 fellow Judge to find this document. In the meantime, you have just

23 mentioned something new. So far we haven't heard anything about it. You

24 state that the Croatian dinar which was in circulation in Herzegovina

25 then was actually Croatian dinar coupons issued not by the central bank

Page 30037

1 of Croatia but rather by a signature of the finance minister and you

2 state that the Croatian dinar in circulation then which triggered high

3 inflation was not the Croatian dinar in the sense that it was issued by

4 the central bank, it was actually coupons just like you in Sarajevo

5 issued coupons. Is it what you're telling us?

6 THE WITNESS: [Interpretation] Yes, your understanding is correct,

7 Your Honour. If necessary, if I may, I can illustrate this by showing

8 you an actual bank note that I have on me.

9 JUDGE ANTONETTI: [Interpretation] It could be interesting for all

10 of us to see that bank note. We'll put that on the ELMO.

11 MR. KARNAVAS: Your Honours, it might be good to also see the

12 coupons and I can distribute these photocopied exhibits. I was -- I ran

13 out of time yesterday but we have it and this will save me from my

14 redirect.

15 JUDGE ANTONETTI: [Interpretation] You could have made colour

16 copies.

17 MR. KARNAVAS: Next time.

18 JUDGE ANTONETTI: [Interpretation] Please go ahead with your

19 comments, witness. What do we have in front of us?

20 THE WITNESS: [Interpretation] This is the Croatian dinar issued

21 by the Republic of Croatia, signed by the Minister of Finance of the

22 Republic of Croatia, Dr. Zoran Jasic. We don't see any reference here to

23 Croatia's National Bank. This is not something that is entirely

24 uncommon. When a country is unable to introduce a permanent currency or

25 maintain its value, if I may, Your Honours, just another three sentences

Page 30038

1 of explanation.

2 When a country introduces money, tries to maintain its value, can

3 try to maintain its value by administrative means by establishing an

4 exchange rate and officially maintaining it but it must have a

5 well-organised system for that purpose. It must have well-established

6 borders, customs, internal circulation, and control.

7 Alternatively, a country can do something else. It can try and

8 maintain the value of its currency by foreign currency reserves. It

9 takes steps in the market by buying or keeping foreign currency reserves

10 in a bid to preserve the value of its currency. Croatia couldn't do any

11 of those at the time, it couldn't take any of those measures and it

12 decided to start producing provisional money and it went on like that up

13 until 1994, until eventually Croatia introduced its permanent currency

14 because at that point in time it was obvious that they had all the

15 conditions in place for maintaining its value.

16 JUDGE ANTONETTI: [Interpretation] What we see here is a coupon;

17 right? I'm checking the translation. So those 50.000 dinars that we see

18 on the screen, what we see actually is a coupon. The Minister of Finance

19 puts that money into circulation not the Central Bank.

20 THE WITNESS: [Interpretation] Yes, Your Honour. You are entirely

21 right. It's a coupon. It was put into circulation by the Minister of

22 Finance and not by Croatia's National Bank.

23 JUDGE ANTONETTI: [Interpretation] If I understood correctly, you

24 had a second bank note to show us.

25 THE WITNESS: [Interpretation] I have Bosnian bank notes on me as

Page 30039

1 well, if you like, and money that we commissioned to be printed. I have

2 Bosnian coupons as well, if you want me to show that, I could.

3 JUDGE ANTONETTI: [Interpretation] If you have one -- do you have

4 it with you?

5 THE WITNESS: [Interpretation] Yes, I have it on me.

6 JUDGE ANTONETTI: [Interpretation] Then you can place it on the

7 ELMO.

8 MR. KARNAVAS: This may be good to also illustrate one of the

9 questions that came from the Bench regarding the stamps and the currency

10 because there was that confusion.

11 THE WITNESS: [Interpretation] This is a bank note that was issued

12 by Yugoslavia's National Bank. This is Yugoslav money. It was in

13 circulation in Bosnia and Herzegovina up until the 15th or possibly the

14 17th of August, 1992. In my evidence, I tried to explain how we were

15 doing our best to limit the influx of this worthless money into Bosnia

16 and Herzegovina. We took a technical step which wasn't very successful.

17 You have an exemplar right in front of you. We ordered that all of the

18 Yugoslav bank notes that were in Bosnia and Herzegovina at a certain

19 point in time should be stamped by the auditing service or the

20 National Bank just to mark them out.

21 JUDGE ANTONETTI: [Interpretation] Very well. Do you have another

22 bank note?

23 THE WITNESS: [Interpretation] This is a specimen of the bank note

24 that we commissioned on behalf of Bosnia and Herzegovina. It was

25 eventually printed but we were unable to bring it into Bosnia or to put

Page 30040

1 it into circulation for all the reasons that I've explained already.

2 JUDGE ANTONETTI: [Interpretation] Very well. We'll give exhibit

3 numbers to those documents because the registry was able to take

4 pictures. We'll give Chamber numbers. What about the 50.000 bank note,

5 Madam Registrar, could we have an exhibit number for the first picture

6 which corresponds to the first bank note.

7 THE REGISTRAR: Your Honours, this will be IC 813.

8 JUDGE ANTONETTI: [Interpretation] Very well. As for the second

9 bank note, the 1.000 bank note. Just a moment.

10 THE REGISTRAR: IC 814, Your Honours.

11 JUDGE ANTONETTI: [Interpretation] The third bank note, the

12 specimen bank note with the number 25.

13 THE REGISTRAR: IC 815, Your Honours.

14 MR. KHAN: Your Honour, perhaps those IC numbers for the last two

15 numbers could be repeated. They are not picked up on the transcript.

16 JUDGE ANTONETTI: [Interpretation] Madam Registrar, could you

17 please repeat because we do not see that on the screen.

18 THE REGISTRAR: That will be numbered IC 813, IC 814, IC 815,

19 respectively.

20 JUDGE ANTONETTI: [Interpretation] Go ahead, witness.

21 THE WITNESS: [Interpretation] This is the coupon issued by Bosnia

22 and Herzegovina in August 1992. We were unable to ship the printed bank

23 notes into Sarajevo, the one that was supposed to become our permanent

24 currency and then we had coupons that we used in lieu of money throughout

25 the Sarajevo area.

Page 30041

1 JUDGE ANTONETTI: [Interpretation] Very well. We'll give an IC

2 number as well.

3 THE REGISTRAR: IC 816, Your Honours.

4 JUDGE ANTONETTI: [Interpretation] Very well. Mr. Kruger.

5 MR. KRUGER: Thank you, Your Honour. Thank you, Mr. President.

6 Q. Sir, when we talk about the Croatian dinar which was being used

7 on the -- in certain areas on the territory of Bosnia and Herzegovina,

8 from the money that we saw, would that have been the first exhibit that

9 you showed us, the 50.000 dinar bank note or coupon?

10 A. In essence, it was a coupon; but in theory and in practice, this

11 was a bank note issued by the Ministry of Finance of the Republic of

12 Croatia and a bank note that had no value as a foreign currency.

13 Q. Now, sir, the use of those coupons outside of Croatia or outside

14 the Republic of Croatia, would that only have been possible with the

15 cooperation of the Republic of Croatia?

16 A. I don't think that was the case. Private individuals got hold of

17 whatever they believed was valuable. I, and anyone else for that matter,

18 as long as I was more inclined that way, could always have chosen to keep

19 in my pocket Croatia's dinar as opposed to perhaps some other currency.

20 Q. Is it correct -- well, we saw that from the last Prosecution

21 Exhibit that -- or sorry, the 1D, the Defence Exhibit 1D 02663, the part

22 or the portion that we looked at, it says, Ejup Ganic says, "I saw that

23 Croatia, the exchange rate went 50 per cent up."

24 Is it correct that the Croatian dinar in 1992 was losing its

25 value?

Page 30042

1 A. Correct. It was affected by inflation. I'm not sure about the

2 rate but it was affected. I would need to speculate but I would think it

3 was quite a high rate.

4 If I may just to back this up, let me say this. Even in 1993,

5 companies drew up their annual balances and then those needed

6 recalculating because they had to display some more realistic value. The

7 pure monetary value of those balances had been devalued by the inflation

8 rate.

9 Q. Sir, looking at the value, let's look at Prosecution Exhibit

10 P 09255. That's P, in the Prosecution binder, P 09255.

11 A. [In English] Sorry I have to find it. Yeah, okay.

12 Q. If you page past the first page which is in English, you will see

13 that the next pages consist of copies of the currency exchange rates and

14 starting on the 3rd of February, 1992, and then it goes month-by-month.

15 If you just have a look at that, would that be the currency exchange rate

16 for the Croatian dinar? I know the print is very small.

17 A. [Interpretation] Yes, that is the exchange rate. One small

18 correction. This was always published whenever the rate changed so it

19 wasn't on a monthly basis that this was published. There were daily

20 changes sometimes depending on the fluctuating rates.

21 Q. Now, sir, the -- if we could just understand this. If you could

22 look at the list for the 3rd of February, 1992. Can you find the value

23 of the Deutschemark which is marked as DEM?

24 A. Yes, I can see that.

25 Q. And those columns, I take it, are for buy, sell, and average?

Page 30043

1 A. Correct.

2 Q. Is it correct that the value for the Deutschemark as opposed to

3 the dinar would have been -- well, it says -- I can't even read it --

4 55.000 -- 550.000, but would that be 55 dinars to a Deutschemark?

5 A. More or less. So although the buy and sell exchange rates differ

6 but we can say that it was about 55 dinars.

7 Q. If you look at the first page, perhaps that English, you will see

8 February 1992 and in the first column, numbers of dinars in one

9 Deutschemark, 55. That would correspond, I take it, to the table that

10 you saw?

11 A. That's right.

12 Q. Now, could I ask you, perhaps, just very quickly to find the

13 table for December 1992. And for the record, that would be the page

14 number with the number in the top right-hand corner of 04666784 with

15 Vodic beneath it. Do you have it, sir?

16 A. If I understood you correctly, it's an exchange list number one

17 dated 5th January, 1993.

18 Q. If you could look at the previous page, perhaps, just the

19 previous page. It's the list for Narodna Banka Hrvatske, Zagreb,

20 1 December 1992. Do you have it?

21 A. I do.

22 Q. And what was the value of the Deutschemark on that day?

23 A. Approximately 384 dinars. 384, 385.

24 Q. Okay. And if we look at the first page of the document with the

25 English on, it shows again December 1992, 386, so the point of this, sir,

Page 30044

1 is that is it correct that the Croatian dinar was indeed devaluing or

2 losing its value at a very high rate?

3 A. Absolutely.

4 MR. KARNAVAS: Your Honour, if I may, and I don't wish to be

5 disrespectful to my colleague, but what is the relevance of all of this?

6 I mean I am -- I enjoy the topic I must say, it brings me back to my

7 youthful days when I was in university studying economics but I don't see

8 the relevance in this part of the cross-examination. I really fail to

9 see it. Perhaps he could enlighten us.

10 MR. KHAN: Your Honour, I do with respect support that

11 observation. Of course it is cross-examination and whilst we may have

12 time my learned friend of course can lead. It may make us proceed a

13 little faster on these issues because they appear to be without

14 controversy even if they are relevant.

15 JUDGE ANTONETTI: [Interpretation] Mr. Kruger, with that table, it

16 is obvious that throughout the month, the Croatian dinar was losing value

17 with respect to the Deutschemark. On the 27th of May, 1994, the value

18 was 3.716. So everybody understands that as months go by, the Croatian

19 dinar loses its value. In order to save time, maybe you could just ask

20 your question. Everybody can see that. But what are you getting at?

21 MR. KRUGER: Your Honour, I'm stepping off this topic. It does

22 have relevance but I won't belabour it further.

23 Q. Sir, I'd like to step on to a different document now and this is

24 Prosecution Exhibit P 00476.

25 A. Excuse me, you said 476 but what I have is 467. Is that one and

Page 30045

1 the same document?

2 Q. If I may just assist, this is the document which was not in the

3 binder and that we circulated this morning, if I'm not mistaken.

4 A. [In English] Okay. I found it.

5 Q. Do you have it?

6 A. Mm-hm.

7 Q. Sir, this is an extract from the Official Gazette of the Republic

8 of Bosnia and Herzegovina dated 18 December 1992, and it's a decision of

9 the Constitutional Court of Bosnia and Herzegovina, a decision held on

10 14 September 1992 and the court rendered the following decision. It

11 says: "The following shall be annulled. The decision on the

12 establishment of the Croatian Community of Herceg-Bosna adopted on

13 18 November by democratically-elected representatives of the Croatian

14 people of Bosnia and Herzegovina ..."

15 And then a number of other decisions and decrees also are listed

16 which are annulled by the Constitutional Court.

17 Now, sir, at this stage on the 14th of September, you were still

18 in Sarajevo?

19 A. I was in Sarajevo on the 14th of September, 1992.

20 Q. That was the day before your 55th birthday, if I recall

21 correctly.

22 A. You know very well my biography.

23 Q. Now, sir, were you in the government aware of this matter being

24 dealt with by the Constitutional Court?

25 A. I personally wasn't aware, but I do not rule out the possibility

Page 30046

1 that someone else knew about it. I see this document for the first time.

2 It was not discussed in the government while I was in Sarajevo. If this

3 decision was taken on the 14th, it did not reach the government by the

4 end of working hours on the 17th or 18th.

5 Q. And the Constitutional Court was still functioning and a legal

6 body at that stage?

7 A. If you are asking me as an ordinary citizen, I'm not a lawyer, I

8 think it was a legal body functioning throughout the whole period.

9 Q. Thank you, sir. If we can very quickly step to another document,

10 P 10506. P 10506 this is actually a document that we have seen

11 previously. Sorry, I think in light of the time constraints we've

12 already dealt with most of the issues which I wanted to touch upon

13 through that document.

14 A. I'm sorry, I'm again having problems with documents. I cannot

15 find this document here in front of me.

16 Q. Don't worry, sir, I'm not going to deal with that document now.

17 Actually, no, sorry, there is one aspect so if we could find it, 10506.

18 Now, sir, this is an interview by Zdravko Latal with yourself and

19 was published in Delo on the 20th of August, 1992. Do you recall this

20 interview?

21 A. I had many interviews with journalists at the time. I don't

22 remember this specific one but I do not rule out the possibility that it

23 happened.

24 Q. Sir, at the end of the first paragraph, it says, "Finance

25 Minister Dr. Zarko Primorac stated what kind of attitude his state has

Page 30047

1 towards foreign currencies on its territory ..." so that's what this

2 interview was about just to help you orient yourself.

3 If we go to the -- about the fourth paragraph where you talk,

4 Primorac: "We finally put the money into circulation."

5 Do you have that paragraph?

6 A. Yes, but I only have the Slovenian original and I cannot

7 understand fully the Slovenian language so I cannot grasp the essence of

8 this interview.

9 Q. Sir, there is one aspect that I would like to in that paragraph

10 take up with you. If I just read to you from the English translation and

11 perhaps you could feel comfortable to comment on it.

12 Referring to the institution of the BH dinar, it says, "Of course

13 we had difficulties in transporting the money to the liberated

14 territories but we overcame those difficulties."

15 Could you, perhaps, just comment on what that would mean?

16 A. I explained yesterday that the government's intention, not its

17 decision but it was just a working agreement to have the dinars printed

18 in Slovenia, shipped and stored at the vault of the National Bank of

19 Croatia and that is what was done. The idea was then to introduce the

20 money into circulation formally and practically in Sarajevo as the

21 capital of Bosnia and Herzegovina which I also found to be quite normal.

22 At the same time, we planned that once we put the money into circulation

23 in Sarajevo, to have part of the money shipped to Livno to cover the area

24 of central Bosnia and Herzegovina and another storage in Tuzla and

25 Zenica.

Page 30048

1 Since some confusion set in, this money probably didn't reach

2 these other areas. I don't know what is exactly said in this interview.

3 I did not authorise or authenticate this interview. It was translated

4 from Croatian into Slovenian then from Slovenian into English and then

5 back to me from English into Croatian. Therefore, I would like to see

6 this interview in the Croatian language to know exactly what I said in

7 it.

8 Q. Sir, I won't continue with this one because you will be at a

9 disadvantage not being able to follow it but I think we've dealt with

10 most of those aspects. Sir, I would like to, in nearly concluding on the

11 Croatian dinar and my cross-examination, just want to test you on this.

12 The presence of the Croatian dinar on the territory of Bosnia and

13 Herzegovina, but then more specifically its presence on the territory of

14 the Croatian Community of Herceg-Bosna was not driven by pragmatic needs

15 but was more driven by ideology and politics. Could you comment on that.

16 MR. KARNAVAS: Your Honour, is this a statement because it's put

17 as if it's a statement of fact. Now, perhaps my learned friend would

18 like to put the inflection at the end of that declarative statement

19 making it thus a leading question.

20 MR. KRUGER: If I can assist, I'm putting to the witness that

21 that is indeed the case and I would like his comment thereon.

22 THE WITNESS: [Interpretation] Mr. Prosecutor, in money matters,

23 as well as any other material matters of every individual, there is not

24 much importance attached to ideology and national feeling. People want

25 to earn money and be financially stable. If anyone in Bosnia and

Page 30049

1 Herzegovina or elsewhere decided to adopt the Croatian dinar instead of

2 some other currency, they probably had some underlying pragmatic reasons

3 and please bear in mind that at the time, there was no

4 Bosnian-Herzegovinian currency in BH. We did introduce the Bosnian dinar

5 and we had all the decisions in place. We did print it but it wasn't

6 physically there and I quite understand the interest of certain people to

7 use the currency that they had at hand.

8 Q. Sir, the last document that I would like to show you is P 10 --

9 JUDGE ANTONETTI: [Interpretation] One moment. Yes, Mr. Praljak.

10 THE ACCUSED PRALJAK: [Interpretation] Your Honours, for two

11 hours, we've been listening --

12 JUDGE PRANDLER: Mr. Praljak, yesterday, I listened to you and in

13 my view, it was not pertinent, your statement what you made, your

14 questions, rather, what you asked from the witness. Now I would like to

15 know about what would you like to say. Are you also a financial expert?

16 We know that you know about everything but I would like to -- you to

17 explain what is your specialty in finance?

18 THE ACCUSED PRALJAK: [Interpretation] Your Honour, you do not

19 accept the relevance of my yesterday's questions. I said I would explain

20 them later because this tackles the interality [as interpreted] of the

21 financial aspect of this whole affair. This -- hasn't anyone asked this

22 witness who knows perfectly well about these matters what -- the

23 intrusion of the monetary system of Yugoslavia happened, it was

24 Milosevic's order to print 200 or 300 million of US dollars' worth in

25 Yugoslav dinars, that was just banditry. Then you would understand the

Page 30050

1 whole structure.

2 If you, Your Honour, think that I am intervening too often and

3 that I'm trying to be smart, I have education in finances. I can declare

4 this money to be Praljak's money and nobody can buy anything with it.

5 Everyone knows that no value can be declared by any political action.

6 Money is an expression of a value of certain manufactured goods.

7 For three hours now we have been listening to A, B, C, that one

8 can learn in every high school that somebody in the government of Bosnia

9 and Herzegovina would declare simple paper to be worth and valuable and

10 on the other hand, you cannot buy flour or anything with it, then how can

11 they sell flour for the worthless money.

12 So I would like to ask you to ask Dr. Primorac to explain why did

13 they stamp the bank notes and did Milosevic engage the mint in Topcider

14 to print the money around the clock in order to pay the bills of Serbia

15 and its citizens and to rob Bosnia and Herzegovina and Croatia as a

16 highwayman and after that, these two republics in order to prevent this

17 robbery resorted to printing their own money and this is how the whole

18 cycle began.

19 Your Honour, as a sociologist, I have studied economy enough in

20 order to understand these issues about foreign exchange remittance from

21 people working abroad so, please, do not discount me in advance by asking

22 me what are you doing here? Please listen first to my reasons, to the

23 facts that I have to tell you and how I put these facts together and only

24 then I ask you to make your conclusion.

25 JUDGE PRANDLER: Thank you, Mr. Praljak. You will receive today

Page 30051

1 the decision of the Chamber about the issue of your role in

2 cross-examination, et cetera, and therefore I now -- I'm not commenting

3 your statement which was a statement, of course, and you have the right

4 to make it. But again, I say that in this particular instance, I do not

5 think that you are an expert in those issues which we are now listening

6 to and talking about. Thank you.

7 JUDGE ANTONETTI: [Interpretation] Mr. Kruger.

8 MR. KRUGER: I have only one more document that I want to deal

9 with with the witness.

10 Q. Sir, if we can have a look at Prosecution Exhibit P 10507.

11 P 10507. Immediately, I can tell you that you would probably not have

12 seen these handwritten minutes previously. You would probably not have

13 been at any such meeting because this is after you have left the

14 government. Nevertheless, I'd like to ask you about one or two things in

15 this. It's the 217th Session of the Presidency of the RBiH. It's the

16 minutes for the 4th of October, 1993.

17 If you look on the first page of the minutes, item 3, the second

18 paragraph of item 3, it then deals with governor of the National Bank.

19 Then it says -- do you have that?

20 THE INTERPRETER: The interpreters don't.

21 MR. KRUGER: It's the second page of the document, the first page

22 where there's writing and it is right at the end of the -- that page and

23 in the B/C/S, on the first page and there is an item 3 and then a

24 bracket. And just beneath that bracket I think it says, "Governor of the

25 national bank."

Page 30052

1 Q. Now, it then says "Stiepo Andrijic absent. Absent for," and then

2 crossed out, "more than a year. A longer period of time from the

3 republic. The government cannot get valid information from the bank

4 about debiting the account of the bank for the orders and in," and then

5 unclear, perhaps, Celje, "and Zagreb. It is not known why the foreign

6 currency has been debited. Stiepo is removed due to the failure to

7 perform his duty in a regular manner."

8 Could you perhaps just comment on this last matter, you having

9 worked with Mr. Stiepo Andrijic, did you have problems with him in his

10 performing his functions as governor of the central bank or the national

11 bank?

12 A. Before I give you a direct answer, allow me a comment. It says

13 at the top that the meeting was attended by Izetbegovic, Dr. Ljujic,

14 Dr. Pejanovic, Hasan Efendic, Lazovic, Djuricic, Djapara [phoen] and

15 Pusina. I do not see the name of the prime minister here or anyone who

16 can say below in the text that the government cannot get valid

17 information from the bank about certain matters.

18 Apparently this is a situation where we have someone speaking on

19 behalf of the government and we do not see the prime minister here.

20 Secondly, I worked with Stipe Andrijic, we studied together economics in

21 Sarajevo. I was not his supervisor and I have to repeat that the central

22 bank just like any country was independent in Bosnia and Herzegovina but

23 on certain issues we did have to cooperate. Never before nor during this

24 brief period of time had I had any problems in my work with

25 Mr. Stipe Andrijic.

Page 30053

1 Q. So, sir, it was indeed the government that had to deal with this

2 kind of issue, the government being the members of the cabinet?

3 A. I didn't understand you properly. You said they had to deal or

4 they did not have to deal?

5 Q. Was this something which actually fell within the remit of the

6 government to deal with?

7 A. I can see a lot of details here that I can probably explain to

8 the Chamber that you probably are not able to notice because this is from

9 my domain of expertise. It mentions here the removal of money from bank

10 accounts for payment orders in Celje. Probably, and this is just my

11 guess and assumption, this probably refers to the payments for the

12 printing of the Bosnian-Herzegovinian money that we spoke at length today

13 that was printed in Celje because there were no other relations with

14 Celje other than this one at the time.

15 Further on, it says that it is not known what the foreign

16 exchange currency was paid for and if I -- if this was about Celje, it

17 was for this purposes that I explained. As for Andrijic failing to

18 perform his duties, this is not my remit but when you are talking about

19 the central bank you are not talking about a specific individual, you are

20 talking about the confidence in the bank and the money that it has to

21 take care of. So I find this to be very unusual and I would like to say

22 that I haven't seen this paper before.

23 Q. The final thing then on the next page, we see that Lazovic

24 speaks. And about three lines down he says, "Proposals for decisions to

25 fulfill these three vacant posts with previous removal of Boras and

Page 30054

1 Lasic. Their resignation results from their inclination towards

2 Herceg-Bosna and accepting posts in the Herceg-Bosna and they have not

3 taken active part in the PRBiH for a long time. They took active part in

4 establishing HB." Then there's a quote, Boras and it says, "Centuries'

5 old wish of the Croatian people to have its own state is coming true."

6 Were you aware of people in the government who held such

7 ambitions or who were, as it says here, "Inclined towards Herceg-Bosna"?

8 A. I really have no need or indeed any intention to comment on

9 Mr. Lazovic's observations.

10 Q. Sir, is it that you cannot comment on this or does this have some

11 merit in it what is --

12 A. Listen, you're asking me to comment on something someone said 15

13 years ago somewhere that I wasn't physically present and at a meeting of

14 a body of which I was not a member. This would boil down to mere

15 speculation. I'm a serious witness. I'm here to tell you what I know.

16 MR. KRUGER: Sir, thank you very much. I do agree with you that

17 you are a serious witness and I appreciate your cooperation.

18 Thank you very much, Your Honour, I have no further questions.

19 JUDGE ANTONETTI: [Interpretation] Prior to the break I just have

20 a very short question. As a result of Mr. Praljak's intervention,

21 yesterday, or was it the day before yesterday, I asked something about

22 the conversion of the Yugoslav dinar that was reduced to a ratio of 10:1

23 by a decision of the Republic of Bosnia and Herzegovina. I had asked

24 that question because I'm trying to understand what that meant and now

25 Mr. Praljak intervened, he should not have, but anyway, he said that