1 Thursday, 26 June 2008
2 [Open session]
3 [The accused entered court]
4 [The witness entered court]
5 --- Upon commencing at 9.00 a.m.
6 JUDGE ANTONETTI: [Interpretation] Madam Registrar, please call
7 the case.
8 THE REGISTRAR: Good morning everyone in the courtroom. This is
9 IT-04-74-T, the Prosecutor versus Jadranko Prlic et al.
10 JUDGE ANTONETTI: [Interpretation] Thank you, Madam Registrar.
11 Today is Thursday. I'd like to greet the accused, the Defence counsel,
12 the OTP representatives as well as everybody assisting us. I'd like to
13 greet the witness, Mr. Primorac, as well. I hope this will be the last
14 day of his testimony.
15 Very quickly I'd like to turn to the Prosecution concerning the
16 motion to add documents on the 65 ter list. Mr. Karnavas talked about it
17 yesterday, 1D 2941, 2942, 2943, 2944, 2945, 2946, 2947, 2948, and 2949,
18 does the Prosecution oppose that motion.
19 MR. SCOTT: Good morning Mr. President, Your Honours. Good
20 morning to all those around the courtroom. Your Honour, we do not oppose
21 the motion now. As I've said before, we'll continue to reserve our
22 position on a case-by-case basis. I do have to state a general concern
23 while I understand the -- again, the realities of the situation, the
24 Prosecution does have some concern that there's a continuing flow of new
25 materials seemingly with each witness that are not previously listed and
1 while we do not object on this occasion, it is something that we will
2 continue to look at. Thank you.
3 JUDGE ANTONETTI: [Interpretation] Very well. I suppose that the
4 other Defence teams had no objection to raise either concerning the fact
5 that those new documents will be added to the 65 ter list. Having said
6 that, as far as time is concerned, according to our calculations, the
7 Prosecutor still has two hours and 30 minutes. The Bench will try and
8 refrain from asking questions in order to allow the Prosecutor to finish
9 cross-examination. I hope there will be some redirect in the remaining
10 time and I hope that the witness will be able to leave after this hearing
11 and not be forced to stay until next week. I was a little too long and I
12 will now give the floor to Mr. Kruger.
13 MR. KRUGER: Good morning, Mr. President, Your Honours. Good
14 morning to everybody in and around the courtroom.
15 WITNESS: ZARKO PRIMORAC [Resumed]
16 [Witness answered through interpreter]
17 Cross-examination by Mr. Kruger: [Continued]
18 Q. Good morning to you, Mr. Primorac. Yesterday, we left off and we
19 were discussing the workings of the Ministry of Finance and where we
20 ended yesterday was determining that beneath you there was a whole
21 structure of assistants and directors each with his or her own network of
22 officers beneath them. Now, if we could just continue with this for a
23 very short while. Is it correct that you as the Minister of Finance
24 would implement government decisions taken at your level through that
25 network downwards?
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
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
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
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
22 new prime minister was appointed. Until the 23rd of December, 1992
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
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
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
9 A. Yes. Having left Sarajevo
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
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
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 --
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
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
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
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
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
6 A. Mr. Pelivan knew what I was doing in Zagreb. He asked me to wrap
7 up the Zagreb
8 said yesterday when I was answering Mr. Karnavas's questions, I decided
9 to go back to Sarajevo
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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."
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
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
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
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
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
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
23 the government for collecting funds, it is true that he and I were
24 appointed to hold talks in America
25 1992. There was no precise date for our travel, nor had any meetings
1 were organised prior to that.
2 Secondly, I did not leave on the 14th of September to America
3 I went after the 20th of September. I left Sarajevo for Zagreb
4 18th of September and two or three days later after that, I went to
6 the 25th or the 26th of September, 1992. I headed the BiH delegation. I
7 did not go to America
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
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,
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
4 A. I went to Vienna
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
9 that I had in Vienna
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
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
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.
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.
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
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
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
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
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
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
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
20 Do you have that paragraph?
21 A. Yes, I do. It begins "Thereby, Sarajevo will become a deserted
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
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
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
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,
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
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
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.
1 Likewise, I have to say that at least twice if not more I physically met
2 Jure Pelivan in Zagreb
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
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?
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.
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
20 couldn't get away from that channel of monetary supply. We would get our
21 money from Yugoslavia
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
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
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
24 about a period when large amounts of cash were coming in from that source
25 and being devalued all the time.
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
22 together and Macedonia
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.
1 The former Yugoslavia
2 become a new member, we had to assume some of the commitments of the
3 former Yugoslavia
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.
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
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
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
8 Herzegovina Armed Forces Supreme Command Staff report on the conditions
9 and system of financing of the Republic of Bosnia and Herzegovina Armed
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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?
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
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
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."
1 Then Ejup Ganic says, "Last time when I was there, I saw that
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
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
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
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
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
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
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
1 not so quickly, not at the same pace, not so dramatically but it did.
2 And in 1994, Croatia
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
11 JUDGE PRANDLER: I'm sorry again to say it. It may happen that I
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
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
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
1 of Croatia
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
15 JUDGE ANTONETTI: [Interpretation] You could have made colour
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
22 Republic of Croatia
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
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
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
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
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
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
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
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
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,
20 JUDGE ANTONETTI: [Interpretation] Go ahead, witness.
21 THE WITNESS: [Interpretation] This is the coupon issued by Bosnia
22 and Herzegovina
23 notes into Sarajevo
24 currency and then we had coupons that we used in lieu of money throughout
25 the Sarajevo
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
13 Q. Now, sir, the use of those coupons outside of Croatia or outside
14 the Republic of Croatia
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
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
24 Is it correct that the Croatian dinar in 1992 was losing its
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
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?
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
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
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,
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
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
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
20 Q. That was the day before your 55th birthday, if I recall
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
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
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
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
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
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
24 of central Bosnia and Herzegovina and another storage in Tuzla
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
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
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
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
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
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
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
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."
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
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
22 bank just like any country was independent in Bosnia and Herzegovina
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.
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
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
1 Mr. Milosevic had indeed printed money and had flooded Bosnia and
3 all that had had repercussions among which, I wonder, this one.
4 Given the inflation because the apparition of Yugoslav dinars,
5 did the BH government in order to try and cope with this massive influx
6 of Yugoslav dinars, what did it do? Was a possibility to depreciate the
7 currency in a drastic fashion by a factor of 10? Was that a reason that
8 prompted you, you or the government, to take that step?
9 THE WITNESS: [Interpretation] This is another technical step. It
10 was a technical step which had both a practical meaning and a
11 psychological impact. The practical one, we simply didn't have to print
12 as much money as we had to previously and we were under all sorts of
13 restrictions at the time. We said that the psychological impact is very
14 important when it comes to money so the meaning was to show people that
15 the new BH money had more value than the old one.
16 JUDGE ANTONETTI: [Interpretation] We're going to break for 20
17 minutes and then we'll have the redirect.
18 --- Recess taken at 12.24 p.m.
19 --- On resuming at 12.46 p.m.
20 JUDGE ANTONETTI: [Interpretation] Before I give the floor to
21 Mr. Karnavas, I'd like to give the floor to Madam Registrar who is to
22 give us an IC number.
23 THE REGISTRAR: Your Honours, the OTP has submitted to its
24 objections to documents tendered by 2D with witness Akmadzic, Mile. The
25 documents tendered will have the IC number 813 [sic].
1 JUDGE ANTONETTI: [Interpretation] Thank you, Madam Registrar.
2 Mr. Karnavas, you have the floor for redirect.
3 MR. KARNAVAS: Thank you, Mr. President, Your Honours.
4 Re-examination by Mr. Karnavas:
5 Q. Good afternoon, sir. I just have one question, really. You were
6 asked today about, or you were told, basically that your primary contacts
7 were with Mr. Turajlic who was vice-president of the government; do you
8 recall being asked that question by the Prosecutor?
9 A. Yes.
10 Q. Now, just to be clear that I understand it and that we understand
11 it, Mr. Turajlic was one of three vice-presidents; is that correct?
12 A. Correct.
13 Q. And each vice-president would coordinate with various ministers
14 depending on their remit; would that be correct?
15 A. Correct.
16 Q. And when it concerned the ministry of finance, it would be up to
17 the vice-president Turajlic, that was within his remit, he was dealing
18 with such matters?
19 A. He was coordinating the work of all the ministries dealing with
20 the economy, the ministry of industry, trade, traffic, finance and maybe
21 some other ministries that had to do with the country's economy.
22 Q. And I take it based on your contacts with Mr. Turajlic, he would
23 then coordinate with the other vice-presidents and then I guess the whole
24 government, essentially, would be coordinating with each other; correct?
25 A. As long as that was necessary. As a rule, proposals and issues
1 would be raised at government meetings that had gone through all the
2 coordination levels already, the economic one, the social one and then
3 they would discuss it. Did the coordination people have another
4 coordination meeting before this was tabled to the government, I wouldn't
5 know. I wouldn't say so, however.
6 Q. All right. But would it be fair to say or to conclude that based
7 on your contacts with Mr. Turajlic then, the other responsible members of
8 the government and in particular, say, the president of the government
9 and the other ministers would become acquainted with what, if anything,
10 you were doing and you were reporting to Mr. Turajlic?
11 A. That would be entirely normal. What I have been talking about
12 doesn't just have to do with the ministry of finance, it had to do with
13 the work of the government as a whole.
14 MR. KARNAVAS: Sir, I want to thank you again very, very much for
15 coming here to give your evidence.
16 Mr. President and Your Honours, I have no further redirect.
17 JUDGE ANTONETTI: [Interpretation] Thank you, Mr. Karnavas.
18 Witness, on behalf of my fellow Judges, I would like to thank you for
19 coming here, asked by the Prlic Defence. Thank you for having testified
20 on matters which were within your remit. I'd like to wish you a safe
21 trip home and I wish you all the best in your new position. Mr. Usher
22 will escort you out of this courtroom. Please do not forget your bank
23 notes which are in your bag.
24 THE WITNESS: [Interpretation] Your Honours, the money is valuable
25 in terms of these being a rare specimen of what it looked like a long
1 time ago. I would like to take this opportunity to thank everyone, the
2 Chamber, the Defence, the Prosecution. I will only be too glad if my
3 evidence contributed to the establishment of truth in this trial. Thank
4 you very much.
5 [The witness withdrew]
6 JUDGE ANTONETTI: [Interpretation] Very well. Madam Registrar
7 would like to correct a number.
8 THE REGISTRAR: Correction, the OTP objections will have the
9 number IC 817.
10 JUDGE ANTONETTI: [Interpretation] Thank you, Madam Registrar.
11 We are early today, that's very rare. I seize this opportunity
12 to inform you of the following. Next week, we have a Defence expert
13 witness for the Praljak Defence; is that so, Mr. Kovacic?
14 MR. KOVACIC: [Interpretation] That's true, Your Honour.
15 Everything is going forward as planned, the expert will be here on
16 Monday. Actually he arrived today.
17 JUDGE ANTONETTI: [Interpretation] With respect to that witness,
18 the Chamber has decided that the Praljak Defence will have an hour for
19 their examination in chief. As for the other accused, they will be
20 granted 30 minutes for cross-examination and the Chamber decided that the
21 Prosecution will have two hours all included in order to cross-examine
22 that expert witness.
23 You heard earlier that Judge Prandler mentioned a decision by the
24 Chamber, a decision which will be filed today with respect to
25 cross-examination. I therefore invite all parties to read that decision
1 which was taken in the majority. I personally dissented on the substance
2 of the decision.
3 You are therefore invited to read the said decision. Examination
4 in chief will start on Tuesday. Yes, Mr. Karnavas.
5 MR. KARNAVAS: Before we adjourn for the weekend, Your Honour, I
6 just wanted to make sure that the Trial Chamber understands that we will
7 not have a witness subsequent to this expert. We were unable to bring
8 one so -- but I did also want to take this opportunity to inform the
9 Trial Chamber that the witness that will follow the expert, our next
10 witness, we have asked for six hours and we understand that others may
11 be -- will, in fact, be questioning the gentleman and so we anticipate
12 that his testimony will last more than one week. We are making
13 provisions so we don't fall behind but -- so that everything is in order
14 from that aspect but we do wish to point out that we have asked for six
15 hours and we believe that it's going to be a Herculean effort to
16 accomplish our task in six hours, just to inform Your Honours.
17 JUDGE ANTONETTI: [Interpretation] Very well. Mr. Karnavas, you
18 should tell your witness that, unfortunately, he will have to stay on
19 Monday or Tuesday if you have those six hours, it is up to you. You need
20 to settle the issue with the witness.
21 Having said that, his schedule may necessitate that he comes back
22 at a later stage. The witness should not be put in a position when he's
23 told at the very last minute that he has to stay over the weekend. It
24 can be very unpleasant for him. So please make sure he understands that
25 you can calculate the time very precisely but when the Bench asks
1 questions, it is very difficult to anticipate what will happen. So we
2 trust that you will do the necessary for that.
3 I said that the Prosecutor would have two hours. I do not have
4 the document in front of me. The legal officer tells me it's maybe an
5 hour and a half but you will be informed in due time.
6 Anyway, we will have time and for once, the Judges will not be
7 rushed so we'll have a quiet week and we can put all the questions to the
9 Is there anything you want to raise. Mr. Kovacic.
10 MR. KOVACIC: [Interpretation] Your Honour, I just wanted to
11 remind everyone in relation to the next witness that Mr. Karnavas has
12 talked about, we have submitted a motion for this to be a 92 ter witness.
13 We asked for, I think, five or six minutes more in relation to our
14 original request. Maybe we can save up on time and we might use this
15 witness to tender some exhibits into evidence but I'm not talking about a
16 substantial amount of time, maybe up to 20 minutes for direct.
17 JUDGE ANTONETTI: [Interpretation] [Previous translation
18 continues] ... 92 ter procedure we will be doing what we've done so far.
19 Examination in chief, cross-examination, and then your witness will be
20 coming back pursuant to 92 ter. That will solve all the problems.
21 Are there any matters to be raised? Nobody wishes to raise
23 Mr. Scott, you are very silent today. No questions?
24 MR. SCOTT: Your Honour, I'm sure everyone appreciates my silence
25 and I'll leave it at that. Thank you.
1 JUDGE ANTONETTI: [Interpretation] Very well. I wish you all a
2 nice afternoon. We shall reconvene on Monday afternoon.
3 --- Whereupon the hearing adjourned at 1.00 p.m.
4 to be reconvened on Monday, the 30th day of June,
5 2008 at 2.15 p.m.