Tribunal Criminal Tribunal for the Former Yugoslavia

Page 29891

 1                           Wednesday, 25 June 2008

 2                           [Open session]

 3                           [The accused entered court]

 4                           --- Upon commencing at 9.02 a.m.

 5             JUDGE ANTONETTI: [Interpretation] Mr. Registrar, please call the

 6     case.

 7             THE REGISTRAR:  Good morning, Your Honours.  Good morning

 8     everyone in and around the courtroom.  This is IT-04-74-T, the Prosecutor

 9     versus Jadranko Prlic et al.  Thank you, Your Honours.

10             JUDGE ANTONETTI: [Interpretation] Thank you, Mr. Registrar.

11     Today is Wednesday, 25th of June, 2008.  Good morning, Witness.  Good

12     morning to the accused, the Defence counsel, the OTP representatives and

13     to all the people.

14             Mr. Usher, can you check?

15             Witness, can you hear me now?  Fine.  I was greeting everybody.

16     I do this again in order not to forget anybody.

17             THE WITNESS: [Interpretation] I can hear you, thank you very

18     much.

19             JUDGE ANTONETTI: [Interpretation] And good morning again,

20     Witness.

21             Mr. Registrar, you have the floor because you have some IC

22     numbers for us.

23             THE REGISTRAR:  Yes, Your Honours, some parties have submitted

24     lists of documents to be tendered through Witness Akmadzic, Mile.  The

25     list submitted by 1D shall be given Exhibit number IC 00809.  The list

Page 29892

 1     submitted by 2D shall be given Exhibit number IC 00810.  The list

 2     submitted by 4D shall be given Exhibit number IC 00811.  And the list

 3     submitted by the OTP shall be given Exhibit number IC 00812.  Thank you,

 4     Your Honour.

 5             JUDGE ANTONETTI: [Interpretation] Thank you, Mr. Registrar.

 6             Mr. Karnavas, in order to save time, I understand that during

 7     proofing, there were new documents that were submitted and you intend to

 8     use them.  When you do, you will ask for the documents to be added to the

 9     65 ter list; is that right?

10             MR. KARNAVAS:  Yes, Mr. President.  In fact, I was planning on

11     reading the list of documents now so we have it all and I will begin.

12     It's 1D 02941, 1D 02942, 1D 02943, 1D 02944, 1D 02945, 1D 02946,

13     1D 02947, 1D 02948, and 1D 02949.  And I should also note that after

14     leaving here yesterday, we reduced the documents that we probably will be

15     discussing with the witness so hopefully I will be able to finish my

16     direct examination in two and a half hours or so.  That's my game plan.

17             JUDGE ANTONETTI: [Interpretation] Very well.  At any rate, I'm

18     not going to intervene so go ahead.

19                           WITNESS:  ZARKO PRIMORAC [Resumed]

20                           [Witness answered through interpreter]

21                           Examination by Mr. Karnavas: [Continued]

22        Q.   Good morning, Mr. Primorac.

23        A.   Good morning.

24        Q.   Now, yesterday we left off with this one document, 1D 02689, and

25     I'd ask you to look at it.  It was -- it's an agreement on the manner of

Page 29893

 1     conducting payment transactions in the dinar balance between legal

 2     entities and national persons from the Republic of Croatia and the

 3     Socialist Republic of Bosnia.  I had asked you in particular to look at

 4     Article 2 and tell us whether you can give us your interpretation of this

 5     document, in particular provide us with any comments.

 6        A.   Yes, the document pertains to the time before I became

 7     Minister of Finance.  It has to do with the first payments agreement

 8     between the then Socialist Republic of Bosnia and Herzegovina and the

 9     Republic of Croatia and more specifically, it deals with part of the

10     subject matter regulated in the payments agreement, namely, how the

11     balances that already were there on the 31st of December, 1991, would be

12     dealt with.

13        Q.   All right.  Just quick question --

14             THE INTERPRETER:  Microphone for Mr. Karnavas, please.

15             MR. KARNAVAS:

16        Q.   One quick question.  Why would such an agreement be necessary?

17        A.   Yesterday, I tried to explain that at the moment when the former

18     Yugoslavia was falling apart, there were many outstanding claims among

19     the different republics.  It wasn't only Bosnia and Herzegovina and

20     Croatia but all the republics of the former Yugoslavia.  Since they did

21     not have enough foreign currency to pay these outstanding debts, then

22     through agreements such as this one, it was regulated how this would be

23     dealt with.

24        Q.   Thank you.  Now, I notice that your chair is a bit low and I've

25     also noticed that you're rather tall.  Are you comfortable?

Page 29894

 1        A.   I'm okay.

 2        Q.   We can raise the chair a little bit.

 3        A.   It's a good thing that you're taking care of me, isn't it?

 4        Q.   1D 01339.  This is a decree law on money of the Republic of

 5     Bosnia and Herzegovina.  We see at the bottom it's dated 2 July 1992, and

 6     from the very first article, it talks about monetary units and means of

 7     payment in the territory of the Republic of Bosnia and Herzegovina shall

 8     be the dinar issued by the National Bank of Bosnia and Herzegovina.  Can

 9     you explain to us about this particular decree based on your experience

10     and knowledge at the time?

11        A.   This is one of the key documents for bringing about monetary

12     independence of the Republic of Bosnia and Herzegovina.  This is a decree

13     law on the establishment of the money of Bosnia and Herzegovina.  Until

14     then, until the 15th of August, what was in circulation was the money

15     issued by the central bank, that is to say the National Bank of

16     Yugoslavia.  That was money that was in existence throughout the former

17     Yugoslavia.  Through this decree law and through the other documents that

18     followed, Bosnia and Herzegovina basically wanted to make itself

19     independent from the national bank, the central bank of the former

20     Yugoslavia.

21        Q.   And before we get to the other documents, do you know whether

22     this decree was actually implemented and if so, at what time?

23        A.   This decree was implemented not fully, perhaps I can put it in

24     those terms.  In August 1992 in this file of documents, it will probably

25     be there, so this is the legal basis for bringing the money in.  How this

Page 29895

 1     will be implemented in actual fact what the money would look like,

 2     what -- how it would be distributed, all of that was regulated in August

 3     1992.

 4        Q.   All right.  Thank you.  Now, if we look at the next document,

 5     1D 02945, 2945.  We see that it's dated at the bottom July 13, 1992.  At

 6     the top it's Republic of Croatia Ministry of Finance as the buyer and

 7     then the government of the Republic of Bosnia as the seller and this is a

 8     contract or advance payment for purchase of various goods and we see the

 9     actual amount of -- I believe it's 500 million Croatian dinars.  Do you

10     know anything about this particular document, sir, and can you comment on

11     it?

12        A.   Yes, I can.  I'm not the person who signed it because at that

13     time, I was in Sarajevo and as you know, Sarajevo was under blockade.

14     This document was signed in Zagreb.  On behalf of the Republic of Bosnia

15     and Herzegovina, it was Mr. Krsticevic, the trade minister who signed it

16     on the authority vested in him by the government.  It had to do with an

17     advance payment that the Republic of Croatia gave to Bosnia and

18     Herzegovina primarily in order to buy humanitarian aid supplies that were

19     arriving in the port of Ploce, different food supplies such as flour,

20     sugar for the general population.

21        Q.   Thank you very much.  Now, the next document, and for

22     Your Honours, I'm going to be covering four documents together with three

23     other documents with this one and I'll read out the numbers so you can

24     have them handy but we'll go one through one, or one by one.  It's

25     1D 01773 and then I will be discussing 1769, then going on to 1765 and

Page 29896

 1     then 1764 but we'll start off with 1773.

 2             If you could look at this, sir.  We see that the title of it is,

 3     Platform for regulating the relationship with the Republic of Croatia.

 4     Are you familiar with this document, sir?

 5        A.   Yes.

 6        Q.   And do you know when about this document was generated, on or

 7     about?

 8        A.   This document was prepared during the first half of July 1992.

 9     It was used as a platform for discussions with the Republic of Croatia

10     that were being prepared.  I'm not sure of the date but I think that

11     these talks were held around the 20th of July, 1992.

12        Q.   All right.  Now, I want to draw your attention to the last

13     paragraph of paragraph one after the six listed items where it says and

14     I'll read for everyone's convenience, "Alongside these issues that must

15     be resolved as soon as possible, it is also necessary to discuss the

16     relationship between two sovereign states in order to commence with the

17     drafting of certain agreements."

18             Now, keeping that in mind, sir, if we go to the next page under

19     item number 2 where it talks about money transfers and financial

20     cooperation and, again, the very last paragraph of that page, again I

21     will read it, it says, "Within the framework of financial cooperation and

22     establishment of a joint bank should be initiated that would encourage

23     the development of cooperation between business entities."

24             Can you please comment on this, sir, if you are in a position to

25     do so?

Page 29897

 1        A.   Yes.  That part of the platform regulates financial cooperation

 2     with the Republic of Croatia, that is part of the material prepared by my

 3     ministry.  The idea was to speed up or normalise, if we can put it that

 4     way, the economic relations between Bosnia and Herzegovina and Croatia.

 5     It says here that a joint bank was supposed to be established.  In

 6     linguistic terms it can be interpreted in different ways, in the singular

 7     or in the plural, but here it seems to be in the singular.  This would

 8     speed up and normalise relations between the two countries.

 9        Q.   All right.  Okay.  Now, if we go to the next document, 1D 01769.

10     This is a feasibility study on economic justifiability of the funding of

11     the Hrvatska Banka Mostar, a joint stock company, and this is dated

12     November 1992.  And my first question is are you familiar with this bank,

13     sir?

14        A.   First of all, I haven't seen this document before.  This is the

15     first time I see it.  But as Minister of Finance of Bosnia and

16     Herzegovina, I did attend the founding assembly of this bank in

17     Medjurgorje.

18        Q.   Okay.  Could you please tell us a little bit about that event?

19        A.   It was a standard founding assembly.  There were companies both

20     from Croatia and Bosnia and Herzegovina that founded the bank with their

21     own capital so this was an assembly that dealt with the establishment of

22     the bank, its leadership, everything that one does when establishing a

23     bank.

24        Q.   I take it back then as it is today, to some extent, banks are

25     regulated by the government.

Page 29898

 1        A.   No.  Regulations on the establishment of banks, that is to say,

 2     the entire procedure of establishing banks is dealt with by the central

 3     bank of the country concerned.  In this case, the central bank of Bosnia

 4     and Herzegovina was the one that carried out the formal part of reviewing

 5     documents and issuing licences.  As for the government and my presence

 6     there, this was political support in terms of cooperation with the

 7     Republic of Croatia.

 8        Q.   All right, thank you.  I guess I slipped because in my

 9     terminology, government would also include that.  But given your answer,

10     let's look at the next document, 1D 01765, 1765, and here we see that

11     this is a decision and it's permission is granted to establish the mixed

12     ownership bank, Hrvatska Banka Mostar.  And we see at the bottom

13     Dr. Stiepo Andrijic who was the governor of the national bank of Bosnia

14     which would be, then, consistent with what you just told us, that he

15     would be the central bank or the national bank that would be regulating

16     private banks or mixed banks; correct?

17        A.   Yes, this is approval.  Actually this is an authorisation

18     provided to the bank to engage in certain operations, however, everything

19     that is important in terms of regulating the work of the bank falls under

20     the authority of the central bank of Bosnia and Herzegovina and in this

21     case Governor Andrijic.

22        Q.   If we look at the next document 1D 01764, 1764, we see that this

23     is a decision by Dr. Stiepo Andrijic, who was the governor of the

24     national bank, and it's the decision that the mixed ownership bank, or

25     Hrvatska Banka, is hereby granted authorisation to conduct international

Page 29899

 1     money transfers and credit warranty activities.  So I take it this sort

 2     of an implementing document; correct?

 3        A.   I'm sorry I'm not in a position to answer.  Could you please

 4     repeat your question because I didn't seem to hear the first part of it.

 5        Q.   We see that -- based on the earlier document we now see a

 6     document related to Hrvatska Banka and here we see from item one that

 7     this bank is granted authorisation to conduct international money

 8     transfers and credit-warranty activities.  So this again would show that

 9     this bank is being regulated by the national bank.

10        A.   The national bank regulates the work of all banks.  This is a

11     decision that is issued in order to allow the bank to engage in foreign

12     economic relations.  In most cases, for this kind of work, that is to

13     say, payments with foreign countries, a special licence has to be issued

14     because the national bank has to realise or, rather, establish that the

15     commercial bank is properly equipped with the right personnel as well to

16     carry out this kind of work.  In this case, the central bank assured

17     itself of the fact that this bank indeed was capable of handling such

18     work.

19        Q.   Thank you very much.  Now we go to the next document.

20             JUDGE ANTONETTI: [Interpretation] One moment, Mr. Karnavas, I did

21     not want to put questions but given the relevance of the topic, I have

22     to.  I'm about to ask a question of this witness.

23             Looking at this document, Witness, there is one conclusion that

24     can be drawn.  This Hrvatska Banka bank, apparently seated in Mostar

25     since I can see Mostar next to this name, is granted authorisation by the

Page 29900

 1     National Bank Of Bosnia and Herzegovina to operate in Bosnia and

 2     Herzegovina and to have various activities including credit activities

 3     transfer activities, also a loan, lending activity.  So based on this

 4     authorisation which seems to be sort of rather broad in its scope, does

 5     this mean that as of the date of this document, that is, 10th of

 6     November, 1992, in Mostar and around Mostar as well as in Bosnia and

 7     Herzegovina, the Croatian dinar going through this bank is going to be

 8     allowed to circulate freely and possibly be in an economic position of

 9     prime importance?

10             THE WITNESS: [Interpretation] This is general approval for

11     carrying out foreign economic relations so it pertains to all the

12     countries with which it -- the bank has relations of correspondence as it

13     is called, so it has to do with all the foreign currencies that the bank

14     is authorised to deal with.  That is my understanding of the matter and

15     this is customary practice.

16             JUDGE ANTONETTI: [Interpretation] You are speaking about foreign

17     currencies but could the Croatian dinar also transit through the bank and

18     based on this, could the bank lend money to a Mostar citizen or business

19     or company not in a foreign currency but in Croatian dinars?

20             THE WITNESS: [Interpretation] As far as I know about these

21     things, at that time, the Croatian dinar was a foreign currency for

22     Bosnia and Herzegovina so the bank, depending on its rules, I don't know,

23     but I assume that the bank could have allowed so-called foreign currency

24     credits, that is to say, in Croatian dinars and in Deutschemark and any

25     other foreign currency if it did indeed grant approval for credits in

Page 29901

 1     foreign currencies.

 2             JUDGE ANTONETTI: [Interpretation] Very well.  Thank you.

 3             MR. KARNAVAS:

 4        Q.   Just to follow-up from that question.  At this point in history,

 5     what was the official currency circulating in Bosnia and Herzegovina and

 6     what was its value as a currency, that is?

 7        A.   You are talking about November 1992.  At the time, officially,

 8     the official foreign currency in -- or rather the official currency of

 9     Bosnia and Herzegovina was the dinar issued by the central bank of Bosnia

10     and Herzegovina.  What its actual value was is subject to interpretation

11     especially in terms of different areas in Bosnia and Herzegovina but

12     basically it wasn't all that valuable.  As for the value of other

13     currencies that were in circulation in Bosnia and Herzegovina, it

14     depended on the situation and on the area involved, that is to say, how

15     much money was in a particular area and also how many goods could be

16     purchased in the area involved.

17        Q.   All right.  And how much value would it have outside of Bosnia

18     and Herzegovina?

19        A.   Are you talking about the dinar of Bosnia and Herzegovina?  It

20     was a typical non-convertible currency.  I don't know if anyone accepted

21     it.

22        Q.   All right.  Now if we go to the next document, 1D 02047.  This is

23     a decree law on the application of the law on the financing of general

24     social needs.  If you could just look at that very briefly and I will be

25     asking you to comment primarily on Article 2 and Article 4.  So if you

Page 29902

 1     could just look at those two Articles very briefly and then maybe even

 2     Article 15.

 3             Are you familiar with this decree, sir?

 4        A.   Yes.  Yes, I am familiar with this decree.

 5        Q.   All right.  Now, if you look at Article 2, under 1, we see that,

 6     The general social needs of the socio-political communities during an

 7     imminent threat of war and during the state of war shall be and it says,

 8     "The financing of the armed forces of the Republic of Bosnia and

 9     Herzegovina."

10             My first question would be what is a socio-political community?

11     What was meant by that?

12        A.   This is a term that was handed down to us by the previous system

13     and no wonder, this was 1992.  It surprised everything to catch in the

14     simplest possible terms, it comprised all of the bodies of government in

15     Bosnia and Herzegovina ranging from the municipalities to the Republic of

16     Bosnia and Herzegovina itself with all its institutions.

17        Q.   All right.  Now, if we look at Article 4, it says, "The needs

18     referred to in Article 2 of this decree shall be financed by the

19     socio-political community from the available resources determined in the

20     war budget."  Then it talks about a priority being given to armed forces.

21             Can you explain what that means?

22        A.   You mean paragraph 1 or paragraph 2 of this Article?  The first

23     sentence or the second sentence or perhaps both?

24        Q.   Well, Article 4.

25        A.   Okay.  Okay.  I have to provide a brief introduction.  Each

Page 29903

 1     socio-political community, which is what it's called in Article 2,

 2     meaning a municipality or state and so on and so forth had or was

 3     supposed to have a war budget.  The war budget included various sources

 4     of financing, income, the expenditure, that sort of thing.  This Article

 5     tells us that each socio-political community can survive on its budget

 6     depending on how much money there is in that budget.  There needs to be a

 7     balance.  That's the first sentence.

 8             The second sentence tells us that based on such a modality of

 9     financing, priority should be given to the purposes of the armed forces,

10     the consequences of war as well as the health and social security of the

11     population which I believe is self-implicit.

12        Q.   All right.  Now, if we look at Article 15, if you could help us

13     with this article.  Here it says, "The war budget of a socio-political

14     community shall allocate resources for public enterprises on the basis of

15     the opinion of the competent administrative organ."

16        A.   Yes.  This is an Article that -- well, I'll try to remember what

17     it was exactly that we were trying to say by this Article at the time.

18     There was a lot of discussion going on, this was a time of war, there

19     were many ideas floating about.  This wasn't a system in which all the

20     laws could be applied and so on and so forth.  I think the Article was in

21     reference to a situation of this kind.  The republic or rather the war

22     budget of the socio-political community needed to have certain funds to

23     assist public companies.  When I say public companies, I mean those

24     pertaining to infrastructures such as the railroads, the forestry

25     companies, the water supply companies and so on and so forth whenever

Page 29904

 1     there was damage to their equipment, to their communications of such a

 2     kind that the companies could no longer bank roll these projects from

 3     their own budget.

 4        Q.   Okay.  I'm going to ask you to slow down just a little bit.

 5             THE INTERPRETER:  Microphone, please.

 6             MR. KARNAVAS:

 7        Q.   If you could slow down just a little bit.

 8        A.   I'm sorry, I will try.

 9        Q.   All right.  That's the best we can always do.

10             Now, if we look at Article 20 and then we'll leave this document.

11     First let's look at Article 20.  It says "During an imminent threat of

12     war and during a state of war, the socio-political community may

13     determine new sources of revenue and abolish the existing ones; change

14     i.e., increase, lower and abolish tax rates; determine tax relief and the

15     exemption of certain taxpayers and determine the conditions and manner of

16     use of resources intended for financing general social needs during an

17     imminent threat of war and during a state of war."

18             Could you please comment on this article?  What was its

19     intentions?

20        A.   This is in my opinion a typical wartime article.  Given the

21     conditions in Bosnia and Herzegovina at the time there wasn't a lot of

22     income that was regular and that a state of or some of the

23     socio-political communities would have had available to them in

24     peacetime.  The economy was in tatters, the taxes weren't coming in

25     regularly and in order to at least to some extent make it possible for

Page 29905

 1     the socio-political communities to balance their budgets, this provision

 2     gives them a possibility to amend the existing regulations when it came

 3     to their income.  They now were entitled to get new sources of income

 4     through new avenues and modalities.

 5        Q.   All right.  Thank you.  If we go to the next document, this is a

 6     rather different topic and again we're going to be covering several

 7     documents with this.  We'll start off with 1D 02941.  If you look at this

 8     document, we see at the bottom it's 6 August 1992, and it's titled,

 9     "Measures and activities to ensure means for survival of the population

10     of RBH."

11             If you could -- are you familiar with this document, sir?

12        A.   Yes, I worked on it.

13        Q.   And were you only -- we've only translated the very first page

14     although we could certainly -- we will translate the rest but as this is

15     the one of the documents we received from you, isn't that correct, sir?

16        A.   Correct.

17        Q.   And you said that you worked on this document so you would be an

18     ideal person to tell us exactly what this document is all about and what

19     was its intentions.

20        A.   First of all, this is one of the documents of its kind.  I'm not

21     sure if we will be coming across more like these, we probably will.  This

22     was August 1992.  Sarajevo was entirely under siege.  Winter was

23     encroaching and winter can be fierce in Bosnia.  We tried to set up a

24     staff, an HQ, I think that's what it's called, a government staff, if you

25     like, that would try to make sure the population survived the winter.

Page 29906

 1     This is one of such documents and it envisaged measures and activities to

 2     be taken.  This is a platform, if you like, envisaging measures to be

 3     taken.  After that, there would be more specific programmes as to who

 4     should do what and when and such programmes as to who we would be talking

 5     to abroad.

 6        Q.   All right.  If we go to the next document and that is 1D 02697.

 7     This will tie in with your -- the last sentence of your answer.  We see

 8     this is a note, it's dated 24 August 1992.  It's from a meeting of the

 9     staff responsible for collecting funds for the needs of the population of

10     RBH.

11             We see under number 4 your name.  And then if we go to the second

12     page under AD 2, towards the middle of it, it says, "In order to involve

13     the Catholic church in the available activities, it is necessary to

14     conduct preliminary talks with the archbishop of -- I need some help

15     Vrhbosna, Vinko Puljic.  The prime minister Jure Pelivan and the finance

16     minister Dr. Zarko Primorac will conduct these talks."

17             Then it goes on, "In order to involve the Jewish organisations in

18     this activity, the finance minister Dr. Zarko Primorac will conduct the

19     talks with their president, Ceresnjes.

20             Thank you.  I'm having some problems.

21             We can see others have been designated other tasks, so could you

22     comment on this document a little bit, sir?

23        A.   As I said a while ago, in order to implement this platform or

24     programme to collect funds for the survival of the population, a special

25     staff was set up which comprised for the most part leading ministers from

Page 29907

 1     different sectors of the economy, members of the government and a number

 2     of other people too.  The staff would meet from time to time to consider

 3     measures that were taken and that remained to be taken.  Specifically, I

 4     have two responsibilities here, one being to talk to the Catholic church

 5     and the other being to talk to the Jewish community in Sarajevo.  I

 6     would, however, like to remind you of one thing because we will probably

 7     be becoming across another document later on at later stage that will

 8     show you that we had a lot of other commitments not just the --

 9             THE INTERPRETER:  The interpreter didn't understand the word.

10             THE WITNESS: [Interpretation] In this staff, I had at least five

11     or six other commitments and responsibilities that I was given, not just

12     myself but all the other members of the staff too.  This part that is in

13     reference to these two talks, I remember that I talked to Mr. Ceresnjes.

14     I also have to tell you that I don't remember talking to the archbishop,

15     whether I talked to him or not is not something that I can say right now.

16        Q.   And the purpose was to get assistance?

17        A.   The purpose was to try and mobilise all the available resources

18     not just in Bosnia and Herzegovina but also and above all, resources

19     outside Bosnia and Herzegovina because in Bosnia and Herzegovina there

20     was no such thing.  The intention was to ask these two to go and talk to

21     these two and then ask these two gentlemen and the rest after them to try

22     to enlist the assistance of all of their foreign contacts and helpers to

23     aid Bosnia and Herzegovina.

24        Q.   All right.  If we look at the next document 1D 02696.  And I

25     think this is sort of a follow-up to your previous answer which -- we see

Page 29908

 1     here is the programme and again we see your name and the other names of

 2     those individuals and their responsibilities; is that correct?

 3        A.   Yes, that was the programme containing specific responsibilities

 4     and commitments until the 30th of September, 1992.

 5        Q.   And then if we go to 1D 02694.  Do you recognise this document,

 6     sir?

 7        A.   Yes, I do.

 8        Q.   Tell us what it is?

 9        A.   Again, this is a document that is part of the work of the

10     survival staff.  In order to have in the most general idea as to what our

11     resources were at the time, understandably, we had to draw up a document

12     to see what there was, what was available to us, what we could expect and

13     what the basic needs were that we had to provide for over the next few

14     months.

15             This document shows you the financial resources that were

16     available to us at the time or that could possibly have been available to

17     us at the time.

18        Q.   All right.  Now, I'm going to -- probably in your binder skip

19     forward a little bit.  I'm going to go to 1D 02709.  1D 02709.  If you

20     look at the yellow stickies or posties or whatever you want to call them.

21     If you wish, we can have the usher provide you with ...

22        A.   I think that might be a good idea.

23        Q.   Do you recognise this document, sir?

24        A.   Yes, I know what it's about.  I don't recognise the format but I

25     know what it's about.

Page 29909

 1        Q.   All right.  Now, if we look at the second page at the name, we

 2     see Jure Pelivan, he was the prime minister at the time; correct?

 3        A.   Correct.

 4        Q.   If you look at the very last paragraph, it talks about some sort

 5     of a delegation having a meeting on September 5th and 25th of 1992.  So

 6     do you know what delegation Mr. Pelivan is talking about and can you help

 7     us a little bit because we don't have a date on this document.  So I can

 8     only assume that it must have been before September 5 that this was

 9     generated and sent to the president of the European Community.

10        A.   Again, this is a document that is part of the survival programme.

11     One of the measures adopted at the time was for the prime minister to

12     dispatch letters to several addressees in the world explaining the

13     situation and requesting their assistance, to put it in the simplest of

14     terms.  This document is about the request that was made to the president

15     of the European Commission to receive the Bosnian delegation, the BH

16     delegation between the 5th and the 25 of September, the delegation was to

17     be headed by a member of the Presidency, Dr. Ganic and I was a member of

18     the delegation.  We went to those talks, we discussed the population

19     survival programme but it wasn't at this point in time.  I think it was a

20     lot later.  I might even be able to remember the date, but it could have

21     been possibly some time in late October.

22             THE INTERPRETER:  The interpreter didn't understand the other

23     date that the witness mentioned.

24             MR. KARNAVAS:

25        Q.   What might have been the other date, sir, because it wasn't

Page 29910

 1     picked up?

 2        A.   I think it was between the end of October and the first decade of

 3     November.

 4        Q.   Okay.  All right.  If we look at 1D 02712 and this would be the

 5     last document within this chapter.  We see a survival programme for the

 6     population of the Republic of Bosnia and Herzegovina during the period

 7     1 November 1992 to 30 June 1993.  At the bottom of the page, we see

 8     Sarajevo, 1 November 1992.

 9             Sir, do you recognise this document?

10        A.   Yes, I do.  I didn't work on this document but it was a component

11     of the activities taken by the survival staff.  This is something that

12     Mr. Ganic and I used for our presentation in terms of the needs of Bosnia

13     and Herzegovina with the European commission.  And I think I've given you

14     a date already; I think it was sometime in the first half of November.

15        Q.   All right.  Again I'll ask you to slow down --

16             THE INTERPRETER:  The interpreter's note, could the witness

17     please be told to slow down.  Thank you.

18             MR. KARNAVAS:  They're really -- we need a clear record and it

19     helps.

20        Q.   One final question with regard to your trip to the European

21     Commission, do you recall whether you were successful in any way?

22        A.   We had talks at various levels over there.  We gave a

23     presentation of our programme.  Understandably, at the top-most levels we

24     were told that we would receive assistance.  There was no specific

25     agreement.  There was no specific document that was produced as a result

Page 29911

 1     of our request.  There was nothing for us to sign.  Nevertheless, within

 2     the framework of the regular assistance that was being shipped to Bosnia

 3     and Herzegovina by certain countries of the European Union, I'm sure that

 4     the document achieved some notable results nevertheless.

 5        Q.   All right.  Thank you.  Now, if we go to the next document, 1D

 6     01620, 1620.  And it's dated 16 of August, 1992.  This is a decision to

 7     implement the decree law on the currency of the Republic of Bosnia and

 8     Herzegovina.  And if you could take a look at that and I will be

 9     focussing primarily just on Articles 1, 2 and 3.

10             Do you recognise this document, sir?

11        A.   Can I please have an explanation?  I'm not sure we're talking

12     about the same document because the one that I have in front of me, the

13     subject matter is the same, apparently.  The date is the 13th of August,

14     1992.

15        Q.   Okay.  I'm looking -- I'm sorry, I'm looking at the very top of

16     the page and you're looking at the end.  But you're right, okay, it's

17     13th of August, 1992, at the very end.  And my apologies.  This is a

18     decision to implement the decree law on the currency.  Now, are you

19     familiar with this document?

20        A.   Yes.

21        Q.   All right.  And could you please explain to us what it is?

22        A.   A while ago, we looked at a document by which the government of

23     Bosnia and Herzegovina and the Presidency adopted a decree law

24     establishing the dinar as the official currency of Bosnia and Herzegovina

25     and it was to be issued by the central national bank of Bosnia and

Page 29912

 1     Herzegovina.  That was a decision that had to do with a principal,

 2     namely, it introduced a new currency into the monetary system of Bosnia

 3     and Herzegovina.  This was a decision that talked specifically about a

 4     number of other things apart from the introduction of this new currency,

 5     it also comprised several other provisions, what the lower denominator

 6     would be, 100 para equals one dinar.  It also introduced the designations

 7     for this new currency.  Once the new currency was introduced, the old

 8     currency was no longer valid and then it talked about all the differences

 9     between the new currency and the old currency.  Everything that was

10     necessary for a currency to be able to viably function as a means of

11     payment in a country.

12        Q.   We can see from Article 3 that on the day when this decision

13     enters into force, that the new value shall be set for money issued by

14     the national bank of Yugoslavia at the rate of 10 to 1.  Why is that

15     significant?

16        A.   That's significant because the money that had been in circulation

17     up to this point in Bosnia and Herzegovina issued by the National Bank of

18     Yugoslavia was devalued by inflation to a frightening extent.  We had to

19     make sure that we were on the safe side to the effect that the new

20     currency would, be in a manner of speaking, more valuable.  I'm not sure

21     if that's of interest but I might as well explain that.  This decision at

22     the time assumed or rather it was based on the fact that the new currency

23     that was printed would be brought into Sarajevo.

24        Q.   Okay.  Now, I just want to make sure that I understand this

25     correctly so -- and I assume you're going to correct me if I am wrong

Page 29913

 1     because you've done that on several occasions so far so ...

 2        A.   I'm sorry but I have to be precise.

 3        Q.   Exactly.  That's fine.  And we strive for precision here.

 4             But up until this point in time, can we assume that there is no

 5     Bosnian currency, that they're using the old Yugoslav dinar, is that what

 6     the official currency was up until this period circulating in Bosnia and

 7     Herzegovina?

 8        A.   That's correct.

 9        Q.   If we go to the next document, 1D 0 ...

10             JUDGE ANTONETTI: [Interpretation] Just a follow-up question.  In

11     paragraph 3, it seems that former Yugoslav dinars will be replaced by

12     Bosnian dinars at the ratio of 1 for 1 -- of 10 for 1, so 1.000 Yugoslav

13     dinars are ten times less worth in Herceg -- Bosnia and Herzegovina

14     dinars, is that how we're supposed to understand it?

15             THE WITNESS: [Interpretation] First of all, I would like to

16     remind you that we're talking about the dinar and that was the official

17     currency in Bosnia and Herzegovina.  And the ratio, you're quite right,

18     Your Honour, that's 10:1.  1.000 dinars issued by the Yugoslav Central

19     Bank will now be exchanged for 100 dinar issued by the Central National

20     Bank of Bosnia and Herzegovina.

21             JUDGE ANTONETTI: [Interpretation] Wasn't that a blow to all

22     people who owned Yugoslav dinars whose fortune was ten times less worth

23     at once?

24             THE WITNESS: [Interpretation] This is paper money, both.  It's

25     only worth whatever you can buy for it, therefore, this is no blow at all

Page 29914

 1     to those who expressed the value of their property in Yugoslav dinar

 2     because that currency no longer existed.  It was as simple as that.

 3     There was now a new currency in circulation and the ratio was defined as

 4     10 to 1.  That was that.  This is a technical reform that in no way

 5     changed or affected the value of the old currency.  It is just that it is

 6     now expressed in a currency that is worth more in purely formal terms.

 7     How you choose to express this belongs to a very technical discussion.

 8             JUDGE ANTONETTI: [Interpretation] Thank you.

 9             Mr. Karnavas, you may proceed.

10             MR. KARNAVAS:  Thank you, Mr. President.

11        Q.   Now, if we go to the next document, 1D 01622, 1622.  This is a

12     decision to put bank notes into circulation and withdraw bank notes from

13     circulation.  We see that this is 13th of August, 1992.  Just focus on

14     Article 1 and then I'll take you to Article 5, if you just look at those

15     very briefly.

16             In Article 1, it says, "On 17 August 1992, the National Bank of

17     Bosnia and Herzegovina shall put into circulation bank notes in

18     denominations" and it lists them.

19             And then going to paragraph number 5, it says, "The exchange of

20     bank notes from item 2, paragraph 1 and 2 in this decision for bank notes

21     from item 1 of this decision shall be carried out by the National Bank of

22     Bosnia and Herzegovina, the public auditing service of Bosnia and

23     Herzegovina, banks and post offices with payment operations."

24             Then it goes on to say that, "The exchange of bank notes for item

25     2, paragraph 2 of this decision shall take place solely in the area of

Page 29915

 1     the city of Sarajevo."

 2             Now, could you please explain that to us?

 3        A.   First of all, this is a document, it wasn't the government of the

 4     national bank of the -- of Bosnia and Herzegovina.  Putting new bank

 5     notes into circulation is something that any central bank carries out.

 6     In this case, it's the central bank of Bosnia and Herzegovina.  In

 7     Article 1, it says what the actual bank notes will be and in number 2, it

 8     says when this will take place.

 9             I have to remind you of my statement in relation to money a few

10     moments ago.  All of this was done on the assumption that the money that

11     was printed in Slovenia and that was transported or that was rather

12     supposed to be transported to Sarajevo will in actual fact be brought

13     into Sarajevo because Sarajevo was under a blockade.

14             If you allow me, I'm just going to use three more sentences to

15     explain the process.  My task was to try to reach agreement with

16     General McKenzie, the UNPROFOR commander that he make it possible for us

17     to bring money into Sarajevo.  We had a meeting and he promised that.

18     There are two things that are very important from his promise that I wish

19     to point out now.

20             First of all, he promised that he would make it possible for us

21     to have a plane land in Sarajevo, a plane that we would find.  And

22     secondly, the money that would be unloaded would be brought to the

23     treasury of the central bank under a military escort.  We found that to

24     be satisfactory.  However, two days later, I was informed by his people

25     from his office, his staff, that this agreement was still in force except

Page 29916

 1     that he's adding two new ones.  First of all, that the Serbs had to be

 2     informed what it was that was being transported; and secondly, that he

 3     cannot provide a military escort to us from the airport to the treasury

 4     of the national bank of Yugoslavia.  That is when we decided not to try

 5     to bring money into Sarajevo anymore and this entire decision therefore

 6     practically lost not all of its importance but most of its importance.

 7     This was the truth and that is when we decided or rather later we decided

 8     to issue monetary coupons.

 9        Q.   And just to make sure I understand, General McKenzie was there on

10     behalf of the United Nations?

11        A.   He was commander of the UN forces in Bosnia and Herzegovina.

12        Q.   I thought I'd point that out because there's been a lot of

13     speculation about their contribution and we see one of them here.

14             Now if we go on to 1D 01621.  This is a decision to issue bank

15     notes and the basic characterisation of bank notes.  I just draw your

16     attention to Article 5, I believe.  Just as an example.  Can you tell us

17     what this is about, what this document -- and I suspect it's connected to

18     the previous one.

19        A.   Yet again this is a technical document that as a rule is adopted

20     by the governor of the National Bank of Yugoslavia and what is specified

21     here is what the bank notes would look like and generally speaking, all

22     the other technical characteristics of the money involved.

23        Q.   All right.  Now, you told us about not being able to bring in

24     this money that had been printed in Slovenia.  And incidentally, can you

25     please tell us what the cost was, if you recall, I don't know if you

Page 29917

 1     mentioned that?  Because I suspect that the Slovenians didn't do this out

 2     of the goodness of their hearts.  This was not an altruistic act on their

 3     part?

 4        A.   This order for the new money was one that was placed before I

 5     became a member of the government, the money was printed in Celje.  If my

 6     memory serves me well and I hope that is the case, the price paid was

 7     1.600.000 Deutschemark.  When the money was printed and prepared for

 8     transport then upon orders from the government of Bosnia and Herzegovina

 9     and in agreement with the government of the Republic of Croatia, this

10     money was transported and stored in the treasury of the national bank of

11     Croatia.

12        Q.   All right.  If we go on to the next document, 1D 01623.  It's a

13     very short document, we see it's 20 August 1992.  I'll read the second

14     paragraph under item one, it says, "On 20 August 1992, the national bank

15     of Bosnia and Herzegovina shall put into circulation monetary coupons in

16     denominations of 10, 20, 50, 100, 500, 1.000, and 5.000 dinar as set out

17     in the decision to issue monetary coupons and the basic characterisation

18     of monetary coupons ..." and it gives a number.

19             And then perhaps a more telling paragraph that I would like you

20     to comment on, still under number one.  "The monetary coupons mentioned

21     in paragraph 2 of this decision shall be used as bank notes in the

22     territory of the city of Sarajevo."

23             So could you please comment on this?

24        A.   The document that is a consequence of what I explained a few

25     moments ago, namely, the fact that we could not transport the money that

Page 29918

 1     had been printed in Slovenia, we could not bring it into Sarajevo, and

 2     the money of the former Yugoslavia was no longer valid, the governor of

 3     the national bank passed a decision to print monetary coupons as

 4     surrogate money.

 5             I cannot fully comment on the second part of this decision why he

 6     decided that this would only be the case in the territory of Sarajevo.  I

 7     assume, and this is just an assumption, Sarajevo was under blockade,

 8     probably this -- these coupons would have very little practical value on

 9     territories outside that environment.

10        Q.   All right.  Well, do you know for a fact whether these coupons,

11     for instance, would have any value, say, in Zenica, based on this

12     decision?

13        A.   If you allow me two sentences by way of an introduction because

14     the subject matter is complex after all.  Our idea was this real money

15     that is also paper money but well, it looked differently, should be

16     brought to Sarajevo or, rather, if it could not, then to Sarajevo, Livno,

17     Duvno and other places.  Since this was no longer a possibility then in

18     the other areas of Bosnia and Herzegovina, people tried to make due in

19     different ways.  I personally know that coupons were printed in other

20     areas as well.

21             I know that proclamations were made to the effect that other

22     currencies would be used as the currency like the German mark.  Then

23     other surrogates for the German mark and so on and so forth.  So this is

24     a situation and a time that gave rise to different solutions.  All these

25     monetary forms with the exception of real money like the German mark were

Page 29919

 1     practically very little value.

 2        Q.   All right.  If we go on to the next document, 1D 02695, 2695.

 3     This is a report on damage, transportation, infrastructure caused by the

 4     ravages of war.  It's dated Sarajevo, 31 August 1992.  This is

 5     Deputy Minister but we can't in English -- we haven't translated this

 6     can't recognise his signature.  Do you recognise the name by any chance?

 7        A.   Not with any degree of certainty.

 8        Q.   Okay.  Now, are you familiar with this report?

 9        A.   At that time, I was in Sarajevo.  I did not see this document in

10     Sarajevo, as far as I can remember, but I know how it came into being.  I

11     probably saw it later on in Zagreb.  I know how these documents were

12     created.  The government then gave an instruction probably to assess war

13     damages on basic infrastructure because, at that time, we harboured the

14     illusion that the war would not last for a long time.

15             In actual fact, we wanted to propose the establishment of an

16     international aid fund for the development of Bosnia and Herzegovina, an

17     international fund so we had to know what was damaged and to what degree

18     in terms of infrastructure.

19        Q.   All right.  Now, if we look at the second sentence in the first

20     page it says, "The transport infrastructure (tunnels, bridges, roads,

21     rail roads, PTT," that's the postal service facilities and other "located

22     on the axes of the aggressor's operations was a particular target of

23     destruction."

24             Do you know if this is correct, based on you living in Bosnia and

25     Herzegovina at the time?

Page 29920

 1        A.   Of course I cannot confirm anything in specific terms but I

 2     assume this is correct because these are vital facilities for the

 3     functioning of life in general in a country and the economy in

 4     particular.  There have to be these vital prerequisites for things to

 5     succeed.

 6        Q.   Okay.  And I'm mostly interested at this point because we will

 7     discuss it later on about the PTT services, the telecommunication

 8     services.  At that point in time, can you please explain to us what the

 9     condition was in Sarajevo, especially with telecommunications and again I

10     want you to link your answer, if it's possible, to the banking system,

11     how it might affect banking transactions or commercial transactions in

12     light of the system that was then operating or inherited prior to the --

13     to the war conditions.

14        A.   I know for sure that from the beginning of May that year,

15     communications with the world were at first impeded and later on, they

16     did not exist at all.  I know that in terms of the communications that I

17     could have then from the company that I worked in and later on from the

18     government.  I know that because I lived near the main post office

19     building in Sarajevo that was the main communications centre with the

20     foreign countries and I know that during the night between the 2nd and

21     3rd of May, and that is 150 metres away from my apartment, was -- this

22     post office was totally destroyed.

23             After that, communication became virtually impossible.  We tried

24     to make due in a different way.  Energoinvest, my former company, bought

25     a satellite telephone and through it we tried to communicate with the

Page 29921

 1     rest of the world.  The government didn't have anything.  Perhaps only a

 2     month after that, the prime minister brought in a telephone and the

 3     central bank after that brought in a third telecommunications set of this

 4     kind; so I think that was it.  I can just say that communications in

 5     terms of all functions, that is to say, state organs, banks, companies,

 6     all of this was brought down to a very, very low level.  Perhaps I should

 7     put it this way.  It became impossible.

 8        Q.   With respect to -- you indicated that the central bank received a

 9     telephone or a satellite telephone, that would have been in which month,

10     sir?

11        A.   I think sometime in the month of September.

12        Q.   Okay.  Thank you.  Now, I don't want to get ahead of myself but

13     maybe this may be a good time because there is this organ or whatever you

14     want to call it that is unknown to us, to many of us, called the payment

15     bureau system.  Could you tell us how that functioned briefly and how

16     telecommunications might have been relevant with respect to the

17     functioning of the payment bureau?

18        A.   The payment bureau was the successor of the former public

19     accounting service of Yugoslavia.  Perhaps at that time it was still

20     called the public accounting service.  I assume that that was the case

21     actually.  Among other functions, as it's very name says, it was involved

22     in payment operations between and among banks, companies, et cetera.  All

23     banks and companies had their own current accounts, giro accounts for

24     carrying out their payment operations.  Of course when the system of

25     payments of a country functions, it is not physical money that is in

Page 29922

 1     circulation but information and when these -- this information is brought

 2     to a standstill, the system can no longer function.

 3             So very soon in the autumn of 1992, the system could no longer

 4     function.  That is what had to do with internal payments.  As for the

 5     other part of the story, that is to say, communication with the rest of

 6     the world, communication with external banks, technically, things were

 7     the same.  Banks communicate between and amongst themselves by way of

 8     information that is transported through communications equipment and on

 9     that basis, payments are made and money is sold and purchased.  If these

10     communications do not work you cannot function, you cannot communicate,

11     you cannot function.

12        Q.   Thank you.  If we look at next document 1D 02947 and this would

13     tie in with your -- part of your, I think, a couple of answers ago when

14     you talked about the establishment of an international fund for

15     reconstruction and we see here -- and this is dated September 1992.  And

16     it document is entitled in fact, "The international fund for

17     reconstruction development of the economy of Bosnia and Herzegovina."

18     And again, I believe we -- all we need to do is look at the very first

19     page a little bit.  The summary, that is.  The first paragraph talks

20     about roads, railway, the PTT communications having been destroyed.  If

21     we look at -- we skip one paragraph and we go on to the next, it says,

22     "The Presidency and the government of the Republic of Bosnia and

23     Herzegovina have initiated the concept of establishing the international

24     fund for reconstruction and development of the economy of Bosnia and

25     Herzegovina."

Page 29923

 1             Then later, it lists after that, some priorities and if you go on

 2     to the third page, we see telecommunications being one of them, hence my

 3     previous question to you.

 4             Now, sir, could you please tell us a little bit about this.  How

 5     was this document generated, if you know, and whether anything came about

 6     as a result of this concept of establishing an international fund for

 7     reconstruction and development?

 8        A.   Yet again this has to do with part of the activities that are

 9     related to what we have already discussed and that is to say, the

10     survival stuff.  One of the conclusions from one of these meetings said

11     that we decided to come up with this initiative to establish an

12     international fund for assisting the development of Bosnia and

13     Herzegovina and we started collecting money for that purpose.

14             This document was prepared and it was adopted by the government

15     and the Presidency, I assume.  It was sent to about 10 different

16     addressees in the leading countries in the world and Europe.  Alija

17     Izetbegovic spoke at the General Assembly of the United Nations in the

18     second half of 1992 and he mentioned this idea in his expose, in his

19     statement to the General Assembly.  I, together with Mr. Ganic explained

20     this idea in the European Union.  There weren't any major results coming

21     from that initiative.

22        Q.   Thank you.  If we go to the next document, 1D 01927.  1927.  This

23     is dated 1 September 1992.  And I should point to Your Honours that with

24     the exception of some chapters, I've tried to structure my direct in sort

25     of a chronological order so we have a snapshot of history of how things

Page 29924

 1     progress.  If you look at this document, this is 1 September 1992, if we

 2     look at the name at the bottom, it's Tomislav Krsticevic.  You obviously

 3     know the gentleman; correct?

 4        A.   I know Mr. Krsticevic.

 5        Q.   And we see that he's with the government of the Republic of

 6     Bosnia and Herzegovina.  This is a letter to the Ministry of Finance of

 7     the Republic of Croatia and the very first sentence, we see it says, "As

 8     we are still unable to finance certain business trips abroad ourselves,

 9     we request that you once again render us a favour and pay to our

10     professor Vladimir Trlin, the head of a team of experts for the

11     succession of states, an advance of 10.000 Deutschemarks ..." and so on.

12             Can you please explain to us why would it be necessary for a

13     government official, a minister of transport and communications to be

14     writing a letter to a ministry in Croatia, to the finance ministry to ask

15     that Croatia pay for certain business trips being carried out by

16     individuals from Bosnia and Herzegovina?

17        A.   At that time, as I've already said, Sarajevo was under a

18     blockade.  This was the 1st of September, 1992.  Mr. Krsticevic was

19     minister of trade and communications in the government and he sat in

20     Zagreb.  Mr. Trlin on the basis of the decision of the government

21     represented Bosnia and Herzegovina in the expert group for succession of

22     the former Yugoslavia and from time to time, this group would meet in

23     Geneva, Brussels and elsewhere.

24             Since Bosnia and Herzegovina did not have any resources, any

25     money, any bank accounts, there was no way of paying this gentleman's

Page 29925

 1     expenses and for others, too, and the only way of dealing with this was

 2     to ask the Croatian government to handle this and that is what they did.

 3        Q.   All right.  When you say "that's what they did," the Croatian

 4     government provided the money for these trips.

 5        A.   The Croatian government on this occasion and later on on many

 6     occasions, and I can testify to that, did indeed lend that money.

 7        Q.   All right.  If you go to the next document 1D 01558, 1558.  This

 8     is dated Mostar, September 12th, 1992.  It's addressed to the president

 9     of the government of the Republic of Bosnia and Herzegovina and at the

10     bottom we see it's from Dr. Jadranko Prlic, president of the HVO, HZ HB.

11     And if you can just look at this document and I will be asking you a

12     couple of questions in particular about the first three paragraphs or so.

13     If you just look at this for a second.

14             Now, it says here "Please find enclosed the acts passed by the

15     temporary executive and administrative body Croatian Defence Council of

16     Croatian Community of Herceg-Bosna in the period of imminent war, threat

17     and in wartime with the aim to normalise life and activities of legal

18     system in the liberated areas."

19             It goes on to say, "In accordance with the decree of the

20     president of the Republic of Bosnia and Herzegovina dated May 2, 1992,

21     certain legal regulations have been inherited from the former SFRY, while

22     other regulations are declared null and void.  By declaring those

23     regulations null and void, a legal vacuum has been created, the

24     consequences of which is the fact that the whole field, especially in

25     economy, remained unregulated."

Page 29926

 1             It then goes on to say, "Since the daily life in the liberated

 2     areas required that these legal vacuums be filled, the Croatian Community

 3     of Herceg-Bosna was forced to pass regulations in these fields with the

 4     remark that all these regulations were passed as temporary regulations

 5     and they are limited to the period or war and imminent threat of war."

 6             My first question is and perhaps only question on this document

 7     because we'll have to take a break soon is:  To your understanding, were

 8     there legal vacuums created as a result of what Dr. Jadranko Prlic is

 9     saying to the president of the government of the Republic of Bosnia and

10     Herzegovina keeping in mind we're speaking of September 12, 1992?

11        A.   I can just give a general answer to this.  I'm not a lawyer but I

12     do know that taking over regulations, because this was more or less the

13     main task of the government at my time, taking over regulations from the

14     former Yugoslavia and passing new regulations that were to be in force in

15     wartime conditions and all of this led to many, many problems so I assume

16     that what Mr. Prlic said in this respect is correct.

17        Q.   It's been translated as problems and it's my understanding that

18     you said legal gaps.  Is that correct?  Are we talk being problems or

19     gaps, legal gaps?

20        A.   It is true that I did say that there were problems, different

21     problems of different kinds because regulations either became dated or

22     they were overcome or whatever, so in my view we can call all of this

23     legal problems, I think.

24             MR. KARNAVAS:  Okay.  Thank you.  Your Honour, I see the time.

25     It may be good for a break.

Page 29927

 1             JUDGE ANTONETTI: [Interpretation] Yes, we are going to break for

 2     20 minutes.

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

 4                           --- On resuming at 10.54 a.m.

 5             JUDGE ANTONETTI: [Interpretation] The hearing is resumed.

 6             The registrar just told me that Mr. Karnavas has used up 1 hour

 7     and 57 minutes, so he still has 1 hour and 3 minutes.

 8             MR. KARNAVAS:

 9        Q.   Now, if we look at 1D 00036.  If you don't have the document, I

10     can provide it to you.  1D 00036.  Do you have it, sir?  Okay.

11             Here, we see -- this is a decree on the regulation of payment

12     transactions in Croatian dinars on the territory of the

13     Croatian Community of Herceg-Bosna during the immediate threat of war or

14     state of war.

15             We talked a little bit about the social accounting services.  If

16     we look at Article 2, it says, "Organisation units of the social

17     accounting service (herein after the SDK) in HZ HB shall open a subgroup

18     of accounts within the main group of accounts with numerical designation

19     1 written in the first column ..." and so on and so forth.

20             Can you comment on this particular decree, sir, keeping in mind

21     the time when it was issued, and this is 22 September 1992, and, of

22     course, reminding us again the conditions and the importance of SDK, the

23     social accounting services and how it functioned.

24        A.   I understand this decree as a technical decree on how a foreign

25     currency should be used in the territory of Herceg-Bosna and in this

Page 29928

 1     case, Croatia's dinar.  I don't see any essential elements in this decree

 2     that might suggest that the intention was to have Croatia's dinar as

 3     Herceg-Bosna's currency.  There is nothing in it to suggest that the BH

 4     dinar should be abolished as a means of payment.  I don't see here any

 5     intention to introduce the new currency.  I don't see any suggestions

 6     here that all the values should be expressed in Croatia's dinar.  I don't

 7     see any specific ratio being mentioned here.  What this leads me to

 8     conclude is that this is a document of a purely technical nature.

 9        Q.   Thank you.  Unless there is any questions from the Bench, I will

10     go on to the next document.  1D 0 --

11             JUDGE ANTONETTI: [Interpretation] Just one question.  This is a

12     technical document, I therefore have technical question.

13             Witness, you spoke about the exchange rate and you mentioned the

14     fact that this decree does not aim to prohibit the use of BH -- the BH

15     dinar because otherwise mention would have been made in that decree about

16     the exchange rate.  I know a long time has passed but could you tell us:

17     What was the parity between the Croatian dinar and the BH dinar, was it a

18     ratio of 1:1 or was it different?

19             THE WITNESS: [Interpretation] I don't know when the BH dinar was

20     introduced.  We did not establish its parity to any other currency.  We

21     started out with the assumption that the market would do its job in this

22     respect and that market relations would then eventually establish the

23     exchange rate and that's why it wasn't regulated there and I can't

24     comment here either because it's not regulated here either.

25             JUDGE ANTONETTI: [Interpretation] When you say that market

Page 29929

 1     relations established the exchange rate, that means there's a parallel

 2     market, right?

 3             THE WITNESS: [Interpretation] If I may, by way of introduction,

 4     the exchange rate between two currencies can be fixed, this is something

 5     that is done by the central bank and then, for example, one assumes that

 6     a dollar is worth two units of another currency.  And if the central bank

 7     maintains that rate, it becomes a fixed rate.  You can do it differently,

 8     you can leave it to the market, the law of supply and demand to settle

 9     that and then the exchange rate is not a stable one, it fluctuates

10     practically on a daily basis.  We call this a floating exchange rate or a

11     fluctuating exchange rate.  Since we didn't have a fixed exchange rate in

12     this case, obviously the intention was to leave this to the market and

13     the law of supply and demand for that particular currency in the market.

14             JUDGE ANTONETTI: [Interpretation] Very well.  Mr. Karnavas, you

15     may proceed.

16             MR. KARNAVAS:

17        Q.   Yes.  And perhaps as a follow-up, why wasn't it fixed?  Was that

18     just a policy decision or was it a decision based on the realities of the

19     circumstances?

20        A.   I have to repeat what I said a while ago.  This decree did not

21     define a number of other things either that would have led us to conclude

22     that this currency was now being introduced as BH's official currency.

23     None of the other elements are mentioned here.  You don't have the

24     exchange rate for that very reason.  For that matter, there is no

25     exchange rate defined for BH dinar and German mark, BH dinar and

Page 29930

 1     Croatia's dinar.  This all depended on the supply and demand for that

 2     particular currency.

 3             Let me give you an example from Sarajevo, for example, the German

 4     mark was sometimes sold and exchanged for 100 Bosnian dinar.  But

 5     sometimes it was a whole bag of BH dinars that you could get in exchange

 6     for a single German mark.  It really very much depended on the

 7     fluctuations of the market day in, day out.

 8        Q.   If I go on to the next document 1D 02446, dated 26 September

 9     1992.  We see at the bottom that the gentleman's name is Hakija Turajlic,

10     the deputy prime minister of the Republic of Bosnia and Herzegovina and

11     he's also the chairman of the commission for weapons and military

12     equipment.  Of course along with this document there are other documents

13     but first, if we could focus on the first page, it says, "On the basis of

14     the agreement on friendship and cooperation with the Republic of Croatia

15     dated 21 July 1992, items 8 and 10, it was decided that our states would

16     initiate and develop cooperations on the manufacture and sale of weapons

17     and military equipment."

18             Then if we just go on to the next page, it talks about -- we see,

19     "Our two republics jointly work on a few projects related to weapons and

20     military equipment."  I'm just reading the very first sentence.

21             Page 3, the very top sentence, it says in the top paragraph,

22     "This is a very significant task for the Republic of Croatia and Bosnia

23     and Herzegovina as the job is very capital-intensive and requires

24     significant capacity for key factories of the NVO, weapons and military

25     equipment, industry in both republics."

Page 29931

 1             And I won't go through any other portions of the document.  But

 2     first and foremost, I don't know if you told us, did you know

 3     Mr. Turajlic?

 4        A.   Yes, I did.  Quite well, in fact.

 5        Q.   And were you aware at all about this particular document, you

 6     know, the contents related in this document, that is, based on this

 7     friendship and cooperation agreement between Bosnia and Herzegovina and

 8     the Republic of Croatia here they want to initiate the development and

 9     cooperation in the manufacturing of weapons?  Were you aware of that?

10        A.   We spoke several times within the framework of the government's

11     so-called coordination for the economy and its various sectors and

12     Mr. Turajlic was at the head of this initiative and the same applied to

13     military cooperation or the development of military equipment in

14     cooperation with Croatia therefore I'm familiar with that.  As for the

15     document itself, I didn't work on this document, however, I'm privy to

16     the subject matter and if you want me to further elaborate on that, I'd

17     be glad to.

18        Q.   If you could, just with one or two more sentences, if you wanted

19     supplement that.

20        A.   Between 1980 and 1990, Yugoslavia produced tanks based on Soviet

21     technology.  Two types, T-72 and T-84.  The tanks were sold abroad:

22     Kuwait, Libya, a number of other countries like that.  Industrial players

23     from all over Yugoslavia were involved but the military production

24     facilities in Bosnia and Herzegovina and Croatia were those most

25     involved.  The idea behind this was to try to pick up again this

Page 29932

 1     initiative and start again producing this tank, this was to be done in

 2     the Djuro Djakovic factory, the intention being for the military

 3     industries of Bosnia and Herzegovina and Croatia to make up for those

 4     republican industries that on account of the breakup of the former

 5     Yugoslavia were now outside the production process and were no longer a

 6     player in that game.

 7        Q.   Thank you.  If we go on to the next document, 1D 02684 and this

 8     is a document that's addressed to the Croatian Defence Council Mostar.

 9     It's dated 17 October 1992.  Again, we see Mr. Turajlic as the deputy

10     prime minister and if we look at this document for a little bit, it says,

11     "We have received your request" and it gives the number "of 5 October of

12     this year referring to giving guarantees for an international loan of US

13     $5 million."

14             Then it goes on to say, "In order for us to be able to consider

15     your request, we hereby ask you to inform us about the items [sic] of

16     this loan.  If you have a concrete offer (the foreign lender, the terms

17     of payments, interests, et cetera)."

18             "In your letter, you also mentioned sending us a bill of costs

19     with basic items for financing the army but we have not received any, so

20     we ask you to send it to us."

21             "Kind regards."

22             What can we draw, what conclusions can we draw from this

23     document, sir?

24        A.   I wasn't in Sarajevo at the time but the way I understand this

25     request, when the deputy prime minister Turajlic was writing this, he

Page 29933

 1     said that he needed this in order to be able to provide a guarantee for a

 2     foreign loan but for the government to be able to do that, he had to know

 3     the terms first for that loan and that I find to be perfectly

 4     understandable.

 5        Q.   And this would have been the relationship between the government

 6     in Sarajevo, that is, him being -- acting on behalf of the government

 7     because he's deputy prime minister and the Croatian Defence Council; is

 8     that correct?

 9        A.   Yes, the deputy prime minister is here providing a reply to the

10     Croatian Defence Council which had previously made a request.

11        Q.   And given his tasks as the deputy prime minister, would this have

12     been within his remit?

13        A.   Under the rules, in keeping with which the government was working

14     this was something for the finance minister to reply to; however, I

15     wasn't in Sarajevo at the time, I was in Zagreb.  Why he took it upon

16     himself to provide this response is not something that I can explain.

17        Q.   All right.  Now, if we look at the next document, and we're going

18     to cover actually three documents with this but let's look at the next

19     one which is 1D 02 --

20             JUDGE ANTONETTI: [Interpretation] Just a second, Mr. Karnavas.

21     Before you enter into a different subject, I would like to ask a

22     follow-up question.  There is something which seems surprising.

23             Witness, if I understand correctly, the HVO sent a letter on the

24     5th of October, unfortunately we do not have that letter because it would

25     have been useful, and by this letter, the HVO asks the government of

Page 29934

 1     Bosnia and Herzegovina to warrant a loan with somebody else, a loan of

 2     US $5 million.  This letter which was sent by Mr. Turajlic seems to

 3     mention a loan concerning the financing of the army, meaning the HVO.

 4             From your point of view, in view of the fact that you held very

 5     high responsibilities as finance minister, does it mean that the level of

 6     the government of Bosnia and Herzegovina, there was not a refusal on the

 7     principle but the government of Bosnia and Herzegovina was awaiting

 8     further information in order to warrant, if possible, that loan?  Is this

 9     how we are supposed to understand this exchange, knowing that we do not

10     have that letter dated 5th of October?

11             THE WITNESS: [Interpretation] Bearing in mind the general

12     situation at the time, and the fact that we needed any assistance that we

13     could get on any reasonable terms, and knowing that the HVO was viewed as

14     a component of the armed forces of Bosnia and Herzegovina and bearing in

15     mind the nature of this response, I think the BH government would have

16     provided a guarantee as long as the terms were acceptable.

17             JUDGE ANTONETTI: [Interpretation] There is something else that is

18     not mentioned in this particular document but which is probably mentioned

19     in the letter dated 5th of October.  The HVO probably had contacts with a

20     state entity, an individual state entity which was ready to loan those US

21     $5 million provided that there was a warranty by the government of Bosnia

22     and Herzegovina.  In financial terms, didn't that mean that the HVO was

23     in contact with someone who was ready to provide this loan and this is

24     quite a substantial amount of money?

25             THE WITNESS: [Interpretation] I'm not familiar with these

Page 29935

 1     details.  I didn't know about that at the time, but I would like to say

 2     this.  It needn't have been the government.  It could have been a bank or

 3     any other institution that wished to loan $5 million.

 4             JUDGE ANTONETTI: [Interpretation] Very well.  Since we do not

 5     have that letter dated 5th of October, Mr. Karnavas, you may proceed.

 6             MR. KARNAVAS:  Thank you.  Thank you, Mr. President.  If we go on

 7     to the next document, 2944, 2944.

 8        Q.   We see this is dated Mostar, 22 October 1992.  At the very top,

 9     it's handwritten "Received at the office of BiH government on 23 October

10     1992, under number 05/1055."

11             At the bottom, we see that this is from the Department of Finance

12     head, Neven Tomic and this is about an overview of accounts of the

13     Croatian Community of Herceg-Bosna.  One, non-residential dinar account;

14     two, non-residential foreign currency account; three, budget of Croatian

15     Community of Herceg-Bosna in BiH."

16             Then there is an accompanying page with this and it has a

17     breakdown of salaries, purchases of military equipment and so on.  Can

18     you please assist us, sir, because along with that there is also a

19     document of -- it should be 16 October 1992, it's been -- it says

20     September but if you look at the Croatian version, you will see that it

21     actually says 23.10.1992.  I'm sorry, it says -- if we look at

22     Dr. Prlic's letter, we can see it there on the right-hand side.

23             If you could look at these documents and please tell us what is

24     in this bundle under what has been marked as 1D 02944 that was received

25     by the office of BiH on 23 October 1992?

Page 29936

 1        A.   In the first set of documents, there are two, three, four bills,

 2     invoices with certain amounts of money to be used for military purposes

 3     or equipment, military equipment and its value.  This is something that

 4     was done by the company in Mostar that was producing aircraft and this

 5     was forwarded to the HVO.  All the foreign -- the other document is

 6     something that talks about the breakdown of expenses but we don't know

 7     the exact period and we don't know exactly what it's about.  I assume

 8     this is an assessment of Herceg-Bosna's financial needs over a certain

 9     period of time, that's the only reasonable conclusion that I can draw.

10             The third document has the same nature as the first one.  It is a

11     request by the Croatian Community of Herceg-Bosna to the government of

12     the Republic of Bosnia and Herzegovina, President Pelivan for payments

13     regarding military equipment.  Again it was signed by Mr. Prlic.

14             The fourth document is an attachment about the submission of

15     invoices, those that I've been talking about, I assume.  And there is

16     another letter that I have here but it's a very poor copy and I really

17     don't know what it's about.

18        Q.   Now, sticking with the letter that you indicated was to

19     Jure Pelivan, if you could look at the date -- and this is from

20     Dr. Jadranko Prlic to the president Jure Pelivan.  Could you please --

21     are you able to make out the date?

22        A.   Yes, as long as we are talking about the same document, I think

23     so.  Mostar, the 19th of October, 1992.  This is a letter in which

24     invoices are forwarded.  The other letter that I said I couldn't read,

25     that was illegible, what it comes across to me is the 20th of October,

Page 29937

 1     1992, but it's quite illegible, therefore I'm not entirely certain what

 2     it says.  I don't know that if that is what your question was about, sir.

 3        Q.   All right.  That's fine.  And Your Honour, we have not translated

 4     what is under "Racun," which are the receipts and we will do so at some

 5     point but due to time considerations we were unable to do that.

 6             Can you explain to us why would these matters be sent to the

 7     government by Mr. Tomic and by Dr. Jadranko Prlic?

 8        A.   I think that the explanation is simple.  They were asking to be

 9     paid, the government of Bosnia and Herzegovina.  And in addition, they

10     provided the accounts to which the money was supposed to be paid.

11        Q.   All right.  Now, if we look at the next document, 1D 02948, we

12     see your name at the bottom of this document.  We see that it's dated

13     11 November 1992, and it says, "Pursuant to the arrangement made between

14     Mr. Primorac and Mr. Martinovic, please make the following payments to

15     our accounts."

16             First, who is Mr. Martinovic?

17        A.   Mr. Martinovic, at the time, was an advisor to the

18     director-general of Privredna Banka Zagreb and before that he was the

19     minister of finance for the Republic of Croatia.  Since our financial

20     relations, that is to say, those between Bosnia and Herzegovina and

21     Croatia primarily went through this bank, Privredna Banka Zagreb, the

22     operative person who was in charge of these relations was the gentleman

23     concerned.

24        Q.   Could you please explain to us what exactly is this document

25     about?

Page 29938

 1        A.   As I have explained, the government of Bosnia and Herzegovina had

 2     a policy of helping Bosnia and Herzegovina whenever possible, whenever

 3     they had the necessary financial resources.  In this document, I request

 4     that Privredna Banka to pay 1 million Deutschemark to Herceg-Bosna as

 5     soon as possible, also to make a payment to the municipality of Orasje,

 6     100.000 marks, again through Herceg-Bosna, to ensure for our office in

 7     Zagreb 50.000 Deutschemark and to provide us with 30.000 Deutschemarks in

 8     cash in order to cover the expenses of our delegations going to meetings

 9     in Geneva, devoted to the succession of the former Yugoslavia and so on.

10     So it is through this channel that I am trying to do what I can with

11     Mr. Turajlic, who was my contact person in the government of Bosnia and

12     Herzegovina generally speaking.

13        Q.   All right.  If you could help us out a little bit.  We know where

14     Herceg-Bosna Mostar is -- but Orasje municipality, do you know offhand

15     where that would be?

16        A.   I do know.  I do know full well because I'm from Bosnia and

17     Herzegovina.

18        Q.   Could you tell us?

19        A.   The municipality of Orasje is at the north of Bosnia and

20     Herzegovina by the Sava River, that is to say, the northern-most part on

21     the other side of the Sava River is the Republic of Croatia.

22        Q.   Okay.  Is that region called anything, does it come by a

23     particular name?

24        A.   I beg your pardon.

25        Q.   That area, is it called -- is it ever referred to by another

Page 29939

 1     name?

 2        A.   The area not only of the municipality of Orasje, but also of the

 3     neighbouring municipalities is usually referred to as "Posavina".

 4        Q.   Thank you.  I know it but others may not.  But thank you for that

 5     clarification.  All right.  If we go on to the next document --

 6             JUDGE ANTONETTI: [Interpretation] One moment, a very short

 7     follow-up question.  This document shows that on the 11th of November,

 8     1992, you as the minister for finances of the Republic of Bosnia and

 9     Herzegovina asked the Privredna Banka of Zagreb to transfer to

10     Herceg-Bosna Mostar 1 million Deutschemarks.  When you sent this request,

11     I suppose you had the agreement of the prime minister of the time.

12             THE WITNESS: [Interpretation] Since this is a biggish amount, I

13     had Mr. Turajlic's consent at the time because usual practice in the

14     government of Bosnia and Herzegovina was that Mr. Turajlic and I sign

15     everything that has to do with military expenses.  I as Minister of

16     Finance and he in his capacity.

17             JUDGE ANTONETTI: [Interpretation] Apart from the budgetary and

18     financial aspects of this, because this involves or has an effect on the

19     finances of Bosnia and Herzegovina because at least 1 million would be

20     given to Herceg-Bosna, did you need to have a prior political agreement?

21     Would this type of decision have the agreement of the Presidency of

22     Bosnia and Herzegovina and of its president?

23             THE WITNESS: [Interpretation] I don't think so because it has to

24     do with the budget of Bosnia and Herzegovina and that was adopted already

25     around the middle of the year, as it was.

Page 29940

 1             JUDGE ANTONETTI: [Interpretation] Yes, but I'm thinking in

 2     political terms.  You're part of a government that carries out a specific

 3     policy as defined by the prime minister but there's also a Presidency

 4     that may have a say and it may be that Mr. Izetbegovic would not be in

 5     agreement either.  Therefore, such a commitment for a sizeable amount,

 6     did it need the political agreement of the highest level, for instance,

 7     by Mr. Izetbegovic?

 8             THE WITNESS: [Interpretation] As to whether this kind of

 9     political agreement had to exist, probably the prime minister would have

10     to know about that.  The next document will show that he was aware of

11     what I say asking for because he also issues an order to Mr. Krsticevic

12     who was a signatory of our account to transfer 1 million DM to

13     Herceg-Bosna; so these two documents are complementary.

14             JUDGE ANTONETTI: [Interpretation] Very well.

15             MR. KARNAVAS:

16        Q.   If we could look at 1D 02943 and I believe this is the document

17     that you were referring to and I guess this goes back to what you had

18     told us earlier when you said that Bosnia and Herzegovina would help

19     Herceg-Bosna and can you please assist us with this document?

20             THE INTERPRETER:  The interpreter did not catch the number, it

21     was very fast.

22             THE WITNESS: [Interpretation] 1D 023943 is the number, is that

23     what we are discussing.

24             MR. KARNAVAS:

25        Q.   2943, yes.  2943.

Page 29941

 1        A.   [In English] Okay.  [Interpretation] This is an order issued by

 2     Prime Minister Pelivan and it consists of two matters.  First of all, why

 3     is he addressing Krsticevic and not me?  I am the minister of finance but

 4     he is addressing Krsticevic here who is also a member of the government

 5     and who was a signatory of the resident account of Bosnia and Herzegovina

 6     and Opuzen.  At that time I was not a signatory and that is why this was

 7     sent to Krsticevic.

 8             It consists of two things.  One is to stop paying all money

 9     orders from this account in Ploce and Opuzen except for 1 million

10     Deutschemark remittances to the HVO.  So Herceg-Bosna or, rather, HVO was

11     remitted 1 million Deutschemarks and the stoppage of other payments is a

12     consequence of the fact that we decided to restructure the orders or,

13     rather, all the accounts held in Croatian banks and that will be shown by

14     the next document.

15        Q.   All right.  I believe the next document you are speaking of is

16     1D 02690.

17        A.   Yes.

18        Q.   Could you comment on this document?

19        A.   With the approval of the prime minister, I decided that we should

20     close down all non-resident accounts that had existed until then and that

21     our future financial operations, that is to say, of the Republic of

22     Bosnia and Herzegovina in Croatia should be organised through three

23     accounts in Zagreb.  One account was for the office of the government of

24     Bosnia and Herzegovina for current expenses.  This account would have

25     Krsticevic and Goluza as the officers authorised to sign transactions.

Page 29942

 1     The second account would be for humanitarian aid to Bosnia and

 2     Herzegovina.  This would be signed by Amila Omersaftic and

 3     Minister Raguz, the lady was head of the government office for

 4     humanitarian aid.  And the third account of the Republic of Bosnia and

 5     Herzegovina would be signed by myself, Zarko Primorac;

 6     Tomislav Krsticevic, who was minister of trade; Goluza, Josip, who was

 7     deputy minister of trade; and Logo, Muhamed, who was my deputy.  So

 8     financial operations in the Republic of Croatia were fully stabilized in

 9     this way and were fully transparent too.

10        Q.   The documents we have just been going through is 1D 02690

11     followed by 1D 02691 and 1D 02692; is that correct?  That's what you

12     just -- these are the documents that you were referring to in your

13     previous answer?

14        A.   These are the documents that we were -- that I was discussing.

15        Q.   Now, this might be a good time for us to ask you and for you to

16     discuss -- you know, you indicated that you weren't in Sarajevo and so

17     could you please tell us --

18             JUDGE ANTONETTI: [Interpretation] One moment.  Document 1D 02692,

19     the third one, Witness, I can see that you now have the signature because

20     we can see your name in this document.  Is that so?

21             THE WITNESS: [Interpretation] It is correct.

22             JUDGE ANTONETTI: [Interpretation] So had you decided that you

23     could, of your own accord, withdraw or give orders without having to go

24     through Krsticevic or Goluza?

25             THE WITNESS: [Interpretation] A document is missing here, one

Page 29943

 1     that I compiled at the time in Zagreb and in this document, I prescribed

 2     how financial operations would take place in Croatia, those of the

 3     Republic of Bosnia and Herzegovina, I mean.  This document precisely

 4     described how these operations would take place, cash operations, how

 5     documentation was to be filed, and stored and so on.

 6             Within this programme of putting into order the financial

 7     operations of the Republic of Bosnia and Herzegovina in Croatia, there

 8     were these documents, too, that created a system of non-resident accounts

 9     in Croatia and they were made fully transparent in this way.  This was

10     solely my responsibility.

11             JUDGE ANTONETTI: [Interpretation] Very well.  Thank you.

12             MR. KARNAVAS:

13        Q.   Thank you.  Now, if you could please explain to us, you were in

14     Zagreb at the time and I know we've heard a little bit of testimony in

15     this courtroom about that but could you please tell us where were you

16     working out of Zagreb and why were you not in Sarajevo because this is a

17     period when you are the Minister of Finance?

18        A.   On the basis of a decision of the government of Bosnia and

19     Herzegovina, I left Sarajevo on the 18th of September, 1992, as head of a

20     delegation of the Republic of Bosnia and Herzegovina that was supposed to

21     take part in the work of the annual assembly of the International

22     Monetary Fund and the World Bank in Washington in the second half of

23     1992.

24             In addition to myself, there was Mr. Andrijic, the governor of

25     the central bank, he was also on this delegation, and in Washington, the

Page 29944

 1     delegation was joined by the then ambassador of Bosnia and Herzegovina

 2     and Mr. Mihat Brankovic, who was the representative of Energoinvest in

 3     Washington.  They were also appointed members of the delegation.

 4             Upon my return, as you saw in the government programme, I was

 5     supposed to work on the integration of Bosnia and Herzegovina and the

 6     International Monetary Fund, the World Bank, the European Bank of

 7     Reconstruction and Development, also to sum up work in terms of

 8     succession of Bosnia and Herzegovina and also to work on the

 9     establishment of a bank for Bosnia and Herzegovina in Vienna.

10             There were also many other obligations that were of an

11     international nature.  I could not do that kind of work from Sarajevo.

12     No one could have done that work from Sarajevo because quite simply there

13     was a communication blockade.  That is to say that I spent about a month

14     and a half doing this kind of work in Zagreb.

15             When I brought this work to a level that I considered that

16     something had been achieved, I returned to Sarajevo and together with

17     Mr. Pelivan and Mr. Andrijic, I was supposed to fly on an UNPROFOR flight

18     to Sarajevo.  It could have been the last days of November.  On that same

19     day when I was supposed to take this flight in the afternoon, I received

20     information from Mr. Turajlic, Pelivan and Andrijic are witnesses to

21     that, that I should not return then, rather, that I was supposed to wait

22     for Ganic to get out of Sarajevo so that we could go together to the

23     European Union to present our programme for the survival of the

24     population.

25             I waited for Ganic.  A few days later he got out of Sarajevo.  We

Page 29945

 1     went to Brussels and Geneva together.  We presented this programme and I

 2     returned to Zagreb, say, sometime towards the end of the first part of

 3     the month of December.  That is when I was informed that the government

 4     was being reconstructed.  Since I did not wish to be a member of the

 5     government anymore, it seemed pointless for me to go back at that point

 6     in time.  Once again, may I repeat, I did not leave Sarajevo, I worked

 7     upon instructions.  I had intended to return.  I was registered as a

 8     person who was to be returned but this was delayed due to the

 9     circumstances involved.

10             There is another thing I would like to mention, perhaps it's not

11     important but already at that time, my apartment in Sarajevo had already

12     been destroyed and, for all intents and purposes, I had nowhere to

13     return.

14        Q.   Okay.  Thank you.  Now, just two very quick documents for

15     housekeeping purposes.  1D 01630.  This is dated 10 November 1992 and

16     it's a decision, it says "To accept the resignation of Jure Pelivan," I

17     believe that was the prime minister under which you were working, or the

18     president of the government.  It says here prime minister of the Republic

19     of Bosnia and Herzegovina.  And then of course the next document,

20     1D 01408.  This is -- this refers to the election of Mr. Akmadzic

21     replacing Mr. Pelivan; correct?  To your knowledge, that's what happened?

22        A.   At that time, I wasn't down there but this is what happened,

23     according to documents.

24        Q.   Okay.  And there was a period of time when you were -- well, we

25     know that you worked for -- under Prime Minister Jure Pelivan and it's my

Page 29946

 1     understanding that there was some time that you also worked under the new

 2     Prime Minister Akmadzic; is that correct?  Or do I have it wrong?

 3        A.   That is correct.

 4        Q.   Okay.  Now, if you look at the next document, 1D 02693, 2963.

 5     This is November 20th, 1992.  Again, this may have -- may be linked to

 6     your previous answer concerning why you were not in Sarajevo to some

 7     extent and we'll see how.

 8             This is a request for issuing a certificate on meeting the

 9     conditions of the registration of LT/Livno-Tomislavgrad Trading Bank DD

10     Livno."  And we can see here, it says that "Since 28 December 1989, the

11     Livno main branch office has been working as part of the

12     Sarajevo Commercial Bank DD without the status of a legal entity."

13             Now, if we skip down a couple of paragraphs, it then goes on to

14     say, "With the breakout of the war in the RBH, Republic of Bosnia and

15     Herzegovina, communication between the Livno main branch office and the

16     head office was completely cut off.  However, in spite of the absence of

17     communications, the Livno main branch office continued to work in the

18     conditions of an imminent threat of war."

19             Then if we look at the rest of the document, we see what their

20     request is.

21             Can you please help us out here.  What exactly is being sought

22     through this letter?  Because you already told us previously that the

23     communications were not functioning in Sarajevo.  And again remind us how

24     that might have been important with this Livno branch at the time.

25        A.   At the time, or up until that time, up until the war broke out,

Page 29947

 1     Privredna Banka Sarajevo was in existence as a central headquarters and

 2     within it there were several branch offices including the one in Livno.

 3     As for the distribution of work within the bank, it was such that foreign

 4     currency transactions, that is to say, relations with foreign countries,

 5     payments, international credits and so on and so forth all of that was

 6     work that was done by headquarters on behalf of their branch offices.

 7             In other words, let me link all of this up to this document.

 8     When the communications blockade of Sarajevo and the headquarters of this

 9     bank was in force, the branch offices could no longer carry out foreign

10     transactions.  First of all, they didn't have the authorisation.

11     Secondly, they didn't have the communication needed in order to continue

12     foreign transactions, at least as far as I was concerned, and -- that is

13     to say, the payments of pensions of our workers who had worked in Germany

14     and had payments, on account of that pensions, our branch office in Livno

15     and elsewhere had to do something about this to reestablish communication

16     either to reorganise themselves, to become independent, or to find a

17     third way.  According to this document, this branch office decided to

18     become independent and this is what I can infer on the basis of this

19     document.

20        Q.   And would you say, and I don't want to lead you but would you say

21     this is one of the consequences of the disruption of the communications

22     and -- what the war brought out?

23        A.   Definitely that is one of the consequences of this war.  Had

24     there not been a war, this would not have happened.

25        Q.   All right.  Now, if we look at 1D 02698.  This is dated

Page 29948

 1     20 November 1992.  We see Mr. Turajlic again.  And we see the subject

 2     here is the platform for the talks of the delegation of the RBH at the

 3     seat of the EC.  Attached to it is the platform and if we look on the

 4     third page, under item number 4, we see the international fund for the

 5     reconstruction of RBH.

 6             Now, to save time, it would appear that here, this is in of what

 7     you've already told us about of your participation and Mr. Turajlic's and

 8     others in putting a platform together for the survival of the population

 9     and having discussions with the EC and the intention to establish an

10     international fund for reconstruction; is that correct?

11        A.   This is correct.  I was always very specific about these talks.

12     This is the platform that was used by Mr. Ganic and myself.  This is a

13     platform that was established by the government of Bosnia and Herzegovina

14     both Mr. Ganic and I used it in our negotiations with our negotiations --

15     within our negotiations with the European Union towards the end of 1992.

16             THE INTERPRETER:  Interpreter's note, the witness is speaking too

17     fast.

18             MR. KARNAVAS:  I'm going to have to caution you again.

19             THE WITNESS:  Sorry.  Sorry.  [Interpretation] Was I speaking too

20     fast again?

21             MR. KARNAVAS:  Okay.

22        Q.   1D 02949.  And we only translated a portion of this but if we

23     look at it from the very top, we see your name.  We see that it's

24     addressed to the president of the government, Mr. Akmadzic, and if you

25     look at -- under item 5 which was translated and we'll have the rest of

Page 29949

 1     the document translated, Your Honours, but again this is one of the

 2     documents we received rather late.  It says here, "Pensions in foreign

 3     currencies" and again this is linked up to what you told us already.  You

 4     say, "Pensions in foreign currencies and assistance to our citizens from

 5     Germany and other countries have not been paid since April this year.

 6     The money is at German banks around 4 million Deutschemark.  This problem

 7     is especially pronounced in western Herzegovina and Central Bosnia."

 8             Then you say, "To solve this problem, it would be necessary that

 9     the following persons get out of Sarajevo:  Responsible manager of

10     Privredna Banka Sarajevo and director of PIO BiH Luka Sijalkovic

11     [phoen]."  And can you please tell us why was it necessary for you to

12     send this letter to Mr. Akmadzic, the president of the government and why

13     were you asking that these individuals leave Sarajevo just -- I want to

14     hammer home this point?

15        A.   This was a situation in which the pensions earned by BH citizens

16     in Germany were available for transfer to Bosnia and Herzegovina and for

17     distribution to pensioners who were now resident in Bosnia and

18     Herzegovina.  However, the communication lines broke down and these funds

19     accumulated in German banks and could not be transferred to Bosnia.

20             There were problems in other sectors too and the remaining

21     portion of the document will show that.  I sought a solution and one of

22     the solutions was for someone who was responsible on behalf of the

23     Privredna Banka to come out.  I wrote to the prime minister to

24     familiarise him with the problem and to ask for his assistance to leave

25     Sarajevo.  I'm just telling you this to illustrate what the situation

Page 29950

 1     was.  None of the managers of any bank or any institution could leave

 2     unless previously authorised by the prime minister or the president of

 3     the Presidency.  Therefore, this was addressed to the prime minister.  We

 4     had to look for a solution and that is the gist of the matter.

 5        Q.   The very last sentence or paragraph, you say, "There are similar

 6     problems related to the collection of Iraqi debts which are considerable

 7     for us.  I have taken measures so that some people get out and go to

 8     Geneva, but your support is needed here as especially regards the bank

 9     and retirement insurance."  So this again supports what you just told us,

10     correct?

11        A.   Correct, but if I may just say a word or two about the Iraqi

12     debt.  The UN set up a special committee to deal with Iraqi debt after

13     the first Iraqi war back in 1991.  B & H according to our records, or

14     rather, companies from B & H were making claims worth millions of dollars

15     from Iraq.  It was very important for someone who understood the problem

16     to leave Sarajevo, to go to Geneva and try to deal with it.  That is why

17     I pointed out about those people leaving that were dealing with this

18     Iraqi business and then people who were dealing with the pension funds

19     and people who -- the pension funds and the bank as soon as possible for

20     those people to leave Sarajevo.

21        Q.   All right.  If we go to the next document, 1D 02942, 2942.  We

22     see your name at the top of this document and as I understand it, you

23     even provided it to us.  If we go at the last page in the original

24     version, we see that it's dated December 8, 1992.  And this is

25     information on the financial dealings of the government of BiH in Zagreb,

Page 29951

 1     of the government of the government in BiH in Zagreb.  That's what it

 2     says.

 3             Then you talk about the relations with Privredna Banka.  If we

 4     could just look at this first page under information and tell us what is

 5     this about?

 6        A.   Yes.  If you remember, we spoke yesterday in the morning or

 7     earlier about the so-called advance payment granted by the Croat

 8     government to Bosnia and Herzegovina.  That had now been exhausted and we

 9     needed new funds for all sorts of purposes.  So first I got into

10     negotiations with the finance ministry of the Republic of Croatia and

11     they granted their approval as a matter of principle for a new loan from

12     Croatia.  This time around, we asked for a billion and a half dinar and a

13     million dollars and this would be distributed in different ways.  There

14     were negotiations with the Privredna bank and the government and then I

15     informed the prime minister and that's how far the whole matter got.

16             Otherwise, the date on this is the 8th of December which is

17     exactly the time I came back from Brussels and I probably already decided

18     that I would not be part of this new government which had already been

19     reconstructed.  And this is one of the documents in which I am informing

20     everybody else as to what I've been doing and what was still open.

21        Q.   All right.  Now, of particular importance and the Trial Chamber

22     may want some clarification is where you say here, "The contract with the

23     bank has not been signed yet.  The bank has firmly promised to approve

24     the loan.  Until now, the following financial means for these accounts

25     have been engaged" and then you say "For Herceg-Bosna Mostar in

Page 29952

 1     accordance with the government's conclusion, the value of 1 million

 2     Deutschemarks and dinars."

 3             Now, we saw some earlier documents.  Is that what we're talking

 4     about?

 5        A.   The first two figures are linked to what we've been saying but

 6     there's a new element here.  At the time, we received a substantial

 7     amount of humanitarian aid from England, its value being, as far as I

 8     remember, about 9 million German mark.  However, we needed 216.000 pounds

 9     to secure the -- to cover the shipment fees and the storage fees.  We

10     didn't have that kind of money and we had to go back to the Croatian

11     government to help us with that as well.

12        Q.   All right.  And of course we could see on this very same page

13     where you do discuss or inform everybody about the opening of

14     non-residential accounts and that was based on what we have already seen;

15     correct?

16        A.   This is related to what I was speaking about earlier, the opening

17     of new non-residential accounts.

18        Q.   Right.  If we look at 1D 02682, 2682, this is 2 December 1992.

19     This is addressed to the mission of the RBH government, personally to

20     Tomislav Krsticevic and we see at the bottom it's signed by HZ HB

21     vice-president a Mr. Ivankovic.

22             The very first paragraph says, "The Croatian Defence Council has

23     organised a defence war in the territory of Bosnian Posavina and has been

24     conducting it from its very beginning without any help from the Republic

25     of Bosnia and Herzegovina.  This is why we now ask you, for the first

Page 29953

 1     time, to help us financially at a critical [sic] moment for us and thus

 2     enable us to overcome the problem of financing our formations which has

 3     been critical for a long time already."  And we see the amount that they

 4     are being asked.

 5             Do you know anything about this particular request of 2 December

 6     1992?

 7        A.   This was received by the government's office in Zagreb on the

 8     15th of December, 1992.  As this shows, this was just before the

 9     reconstruction of the government.  Therefore, I'm not familiar with this

10     document but there is one other thing that I have to say and I have to

11     remind you that we looked at other documents and it was clear that we had

12     issued an order to the Privredna Bank to use some of our funds and to pay

13     100.000 German marks to Orasje municipality from those accounts.

14        Q.   Exactly.  And that's why I asked you about Posavina so we could

15     tie it up together.  All right.  Very nicely.  1D 02683.  1D 02683.  We

16     see your name at the bottom.  This is 11 December 1992.  Here, again, we

17     saw an earlier such document.  This is addressed to a commercial bank in

18     Zagreb and you're saying -- at the top, we see Republic of Bosnia and

19     Herzegovina government, Ministry of Finance.

20             "We hereby ask you to pay the amounts given below to members of

21     the succession group delegates of the Republic of Bosnia and Herzegovina

22     on the ICFY in Geneva who are travelling to Geneva on 12 December

23     1992 ..." what is this document about, sir?

24        A.   This is another document of this kind.  There were members of the

25     BH commission that went to the succession talks in Geneva.  Some of those

Page 29954

 1     members of that group were in Sarajevo or were from Sarajevo.  Mr. Trlin,

 2     for example, was in Zagreb at the time, but as a rule, these members did

 3     not have sufficient funds to cover their travel expenses.  Whenever a

 4     situation like this occurred, we would go to the Privredna bank in Zagreb

 5     the same bank whose services we used for our other transactions and we

 6     would ask them to cover the travel expenses incurred by those members,

 7     obviously, that would later be charged to Bosnia and Herzegovina.

 8        Q.   All right.  1D 02681.  Again we see your name.  This is dated

 9     17 December 1992, and this says "We hereby ask you to transfer 20 million

10     Croatian dinars from the non-residential account of the government of the

11     Republic of Bosnia and Herzegovina to this particular -- to the account

12     of the office of the RBH government at the Commercial Bank Zagreb."

13             This -- again we have your name.  Can you please explain what

14     this document is about and what it illustrates.  That's probably the

15     perhaps most important aspect is what does this illustrate so we have a

16     good sense, so we don't draw any wrong conclusions of what is a

17     non-residential account and who should have one and if there are any

18     sinister motives behind opening such an account.

19        A.   I tried to explain yesterday why these non-residential accounts

20     were necessary and why the non-residential accounts were not only

21     functioning between Bosnia and Herzegovina and Croatia but were also

22     beginning to function in relation to the other republics as well.

23             If there are any more detailed questions about this, please ask

24     them but all means but speaking of this document, it should be simple

25     enough to explain.  Quite simply, I'm applying to a bank that still has a

Page 29955

 1     non-residential account to transfer to Zagreb 20 million Croatian dinars

 2     which didn't strike anyone as a large sum of money at the time.  It was

 3     actually quite negligible, believe me, at the time to cover the expenses

 4     of the BH office in Zagreb.

 5        Q.   The next document is 1D 01931.  This is dated 26 December 1992.

 6     We see at the bottom it's vice-president of the government, Mr. Turajlic,

 7     and if you look under item number 1, it says "Zarko Primorac is hereby

 8     authorised to run the operational side of the loan and, in contact with

 9     the Privredna Banka Zagreb, prepare and initial the text of the loan

10     contract."

11             Of course we can see above that about certain conclusions of the

12     government concerning $1 million.  Could you please explain to us what

13     exactly Mr. Turajlic is asking of you or authorising you to do, keeping

14     in mind that this is 26 December 1992, and I think that you either have

15     resigned by this point or are rapidly coming upon your resignation?

16        A.   We've looked at that document showing that in keeping with a

17     conclusion by the BH government, I had applied to Croatia to give us an

18     additional loan, 1 billion and a half Croatian dinars and 1 million

19     dollars which is something that should have been dealt with through the

20     Privredna bank as anything else that we were doing with Croatia.  These

21     negotiations were in progress when I was relieved of my duties, which was

22     on the 21st of December, 1992.  The document was written on the 26th and

23     Mr. Turajlic authorised me to continue in an operative sense to see the

24     deal through, for the contract to be signed, but the contract was

25     eventually signed by the appropriate minister in the BH government.

Page 29956

 1        Q.   All right.  If we look at the next document, 1D 01930, dated

 2     15 January 1993.  We see Mr. Akmadzic's name as the president of the

 3     government and it says here, "Pursuant to the conclusions adopted by the

 4     government at its 104th session held on 20 December 1992," we saw that

 5     earlier in the previous document, he goes on to say, "I hereby authorise

 6     Mr. Martin Raguz, minister of labour and social welfare, to sign the

 7     contract with Privredna Banka Zagreb."

 8             So in the previous document we saw that you were run to

 9     operational side, initialling it, I guess, at some point, and here it

10     would appear here that Mr. Raguz is going to be signing the contract.

11     Can you explain that to us so we can understand it?  What's going on?

12        A.   This is perfectly simple.  In my capacity as minister, I started

13     those negotiations but when I was about to leave, the negotiations had

14     not yet reached a conclusion.  Mr. Raguz was not a financial expert.  I

15     don't remember what it was that it was called that he did but he did

16     something different altogether.  He couldn't go on with these

17     negotiations because they were of a technical nature so the government

18     decided that despite the fact that I was no longer minister I should see

19     the deal through.  That I should hash out the terms of the agreement and

20     the contract with the Croatian government and that he, as officially the

21     minister, a minister in the BH government should be the one to sign the

22     contract.  Mr. Raguz as officially a minister with the BH government to

23     sign the contract.

24        Q.   All right.  So from that, I mean I guess we can conclude that

25     Mr. Turajlic at least had confidence in you to allow to you continue with

Page 29957

 1     this particular task, that is getting the loan even after you had -- you

 2     were no longer the minister.

 3        A.   I hope so.  It didn't matter but I had been working with

 4     Mr. Turajlic for 25 years, that's one thing you should keep in mind.

 5        Q.   All right.  Okay.  And that was the gentleman incidentally that

 6     unfortunately and regrettably was killed in Sarajevo.

 7        A.   Yes, he is a gentleman who was killed in an UNPROFOR vehicle in

 8     Sarajevo.  UNPROFOR, the -- were taking back from Sarajevo airport to the

 9     centre of town.  The vehicle was intercepted.  The UNPROFOR soldiers

10     opened the vehicle, I'm not sure what the circumstances were surrounding

11     this, but eventually he was killed inside that vehicle.

12        Q.   All right.  Now, if you go to the next document, 1D 01584, if we

13     look at this document, it says, "Report on the activities of the RBH

14     government logistics centres for humanitarian aid in the Republic of

15     Croatia from 1 January 1993 to 31 May 1993."  Obviously this is after you

16     have left.

17             We do see on top two names, Josip Goluza and Zlatko Hurtic.  And

18     of course if you look at the third paragraph of this document on the

19     first page, it says, "The logistics centres, however, had been operating

20     even prior to that," to a date being referenced in February 20th, 1993,

21     "for instance, one in Ploce since June 1992 and one in Split since

22     July 1992.  Their operations were, however, quite uncoordinated in terms

23     of both reception and distribution of incoming aid."

24             And I point that out just to make reference that this would have

25     been the period when you were a minister with the government of Bosnia

Page 29958

 1     and Herzegovina; correct?

 2        A.   Are you talking about paragraph 3 on page 1?

 3        Q.   Yes.

 4        A.   Yes, that was the period.

 5        Q.   That was a foundational question because my next question was

 6     going to be -- well, first, obviously you know these two gentlemen;

 7     correct?  One is a Croat and the other one is a Muslim.

 8        A.   That's right.  I know Goluza quite well.  I know Hurtic a little

 9     less well, if I can put it that way.

10        Q.   Were they both located in Croatia at the time, to your knowledge?

11        A.   They were both because Goluza, as far as I know, the government

12     appointed Goluza deputy trade minister.  That was Jure Pelivan's

13     government, that was probably extended.  He had been nominated by the

14     government to be in charge of this humanitarian aid business and to be in

15     Zagreb.  He ran the whole thing and he was the head of the Zagreb office.

16             Hurtic was a different thing altogether.  He had been tasked by

17     the government to deal with refugees, people who were on the fringe of

18     society, humanitarian aid, and so on and so forth and he had a job in the

19     Zagreb office but his job was different from that of Mr. Goluza.

20        Q.   And just one technical question -- before I get to that question.

21     This document here and the data that is included in here, would this be

22     the sort of data that you have come across while you were Minister of

23     Finance with respect to activities resulting from these logistics

24     centres?

25        A.   I would like to understand your question better.  Are you talking

Page 29959

 1     about --

 2             THE INTERPRETER:  The interpreter did not understand the witness.

 3             MR. KARNAVAS:

 4        Q.   We see a lot of data here and obviously you were in Zagreb at one

 5     point as the Minister of Finance and I'm wondering whether during your

 6     tenure, obviously you must have known that there were logistics centres

 7     and I'm just wondering whether the data that we see here is the sort of

 8     data that was being collected for accountancy and transparency purposes

 9     that you would have been aware of at the time when you were serving?

10        A.   I think so.  I can't say whether it was done this systematically

11     but my involvement with this part of the government's activity was about

12     this whenever funds were needed to ship aid, to store aid, other types of

13     financial services too.  Knowing Mr. Goluza, who is a very serious

14     individual, I think whenever there was an operation -- and that part of

15     service that he was in charge of -- well, you know, that he absolutely --

16     I think one might even say he -- and I can sort of link this up with what

17     I said before.  This was entirely transparent.

18             THE INTERPRETER:  And the interpreter did not understand the last

19     part of the witness's answer.

20             MR. KARNAVAS:

21        Q.   Could you please repeat the last part of your answer.

22        A.   I said knowing Mr. Goluza who was a very serious individual in

23     the way he went about his job, I'm almost certain that whenever there was

24     an operation that was his responsibility, he recorded this in the

25     appropriate way and then he went on to inform the government of BH about

Page 29960

 1     that.

 2             THE INTERPRETER:  Interpreter's note:  Could the witness please

 3     be asked to slow down.  Thank you.

 4             JUDGE ANTONETTI: [Interpretation] Mr. Karnavas, you are two or

 5     three minutes beyond schedule.  I don't know what the other Defence

 6     counsel intend to do.  I don't know whether there will be

 7     cross-examination.  I don't know.

 8             MR. KARNAVAS:  I have three documents -- well, two to three

 9     documents left and I think I can wrap it up in five minutes, Your Honour.

10     And I had initially predicted four hours.  I don't know about my

11     colleagues.  I'm told there may be another five minutes or ten minutes

12     from them but I think --

13        Q.   Just one housekeeping matter because I failed to ask this

14     question.  At this time when you have this office that you are operating

15     out of that is for Bosnia and Herzegovina in Zagreb, was there another

16     office for other matters such as -- that would serve as a diplomatic

17     mission as it were or had the embassy already been opened?

18        A.   When I came to Zagreb, I found this office of which Mr. Goluza

19     was head, as I said.  This office mostly dealt with issues to do with

20     humanitarian aid, the transit of goods, that sort of thing, generally

21     speaking.  I was never a member of that office.  I simply worked there

22     for a while.  I would go there because I had nowhere else to work.

23             As for everything else, I know that sometime in mid-July, the

24     Presidency appointed Mr. -- Mr. -- the name escapes me but I'll tell you

25     the gist of the matter and then maybe we can trace the name.  An office

Page 29961

 1     was set up that dealt with the diplomatic -- issues of diplomacy and

 2     consular business.  Another gentleman was appointed head who taught at

 3     the faculty of economics in Zagreb and he's even a member of the Croatian

 4     parliament, Dr. Semso Tankovic.

 5        Q.   Could you just tell us that name again because it's not in the

 6     record.

 7        A.   Dr. Semso Tankovic.

 8        Q.   Now just very quickly, 1D 01928, this is a document and again

 9     this is for the purposes of -- that we can see a snapshot in history.

10     Now we're in 1 June 1993, and this is from Governor Stiepo Andrijic, we

11     know that he is the governor of the national bank of Bosnia and

12     Herzegovina and this is in regards to a loan, a rather small loan, I

13     guess, by those days, 100.000 Deutschemarks.  And he says, "I refer to my

14     conversation with Mr. Josip Martinovic during which I attempted to convey

15     the need of the National Bank of Bosnia and Herzegovina for a short-term

16     loan in the amount of 100.000 Deutschemark."

17             Now, Martinovic, again, if you could help us out, who was he, and

18     why would the governor of the National Bank be asking this gentleman for

19     a loan presumably for the National Bank?

20        A.   Let me remind you, allow me, I said before that, the

21     Privredna Banka Zagreb was a bank that was authorised to handle many

22     transactions of this kind with the Republic of Bosnia and Herzegovina.

23     Mr. Martinovic, at the time, was an advisor to the general director of

24     the Privredna Banka in Zagreb and before that, he was the finance

25     minister for the Republic of Croatia.  So this document shows another

Page 29962

 1     thing.  At all times, not just me as a minister but also other

 2     institutions of Bosnia and Herzegovina, I'm talking about the national

 3     bank and everybody else, whenever we are facing a national difficulty and

 4     at the time we were facing a great deal of financial difficulty -- oh,

 5     I'm sorry, I'm sorry.  May I continue?

 6        Q.   Slow down, you're almost there.

 7        A.   Me, in my capacity as the finance minister, and other

 8     institutions of the government of Bosnia and Herzegovina including the

 9     central bank whenever we were facing some sort of financial difficulty or

10     whenever there was a shortage of cash which was a recurring situation at

11     the time, we would always use this channel to address the Croatian

12     government and ask them for assistance.

13        Q.   All right.  We can see that in 1D 01929, this is from Mr. Goluza,

14     this is 3 June 1993, where he's asking for the payment of travel expenses

15     nonetheless incurred by our government officials.  Is that correct?  This

16     is another example?

17        A.   This is another example but let me just add one more thing.  This

18     is a document according to which Mr. Krsticevic and I are settling final

19     financial accounts with the government of Bosnia and Herzegovina.

20        Q.   Okay.  I have one last document and this will take about 30

21     seconds.  Again, now we are in -- this is January 1993.  We have could

22     have handled this a little earlier but I just want to focus your

23     attention on this, this document here.  As of 25 January 1993, we have

24     the National Bank of Bosnia and Herzegovina.  They're putting into

25     circulation money coupons and now it's in denominations of 5.000 and

Page 29963

 1     10.000 dinars.  So do you know whether, as of January 25, 1993, whether

 2     Bosnia and Herzegovina had a currency that was not of this type that you

 3     could circulate the news throughout Bosnia and Herzegovina?  Because here

 4     we're talking about coupons and we saw earlier the coupons were referring

 5     to Sarajevo?

 6             JUDGE ANTONETTI: [Interpretation] Mr. Karnavas, can you give us

 7     the document number?

 8             MR. KARNAVAS:  I apologise.  1D 01292.  1D 01292.  1292.

 9        Q.   15th January, 1993, decision to put into circulation money

10     coupons.  So we see here it's January 25 that the National Bank is going

11     to be putting out in circulation more coupons.  And my question was and

12     we saw that earlier the coupons were for Sarajevo only, do you know

13     whether there was any hard currency that could be used, that was being

14     generated, that is, by Bosnia and Herzegovina that could be used

15     throughout the free territories of Bosnia and Herzegovina at the time and

16     perhaps even outside of Bosnia and Herzegovina as hard currency?

17        A.   First of all, may I answer the question that has to do with the

18     bank notes and then I'm going to add something that is of relevance to

19     the entire area of Bosnia and Herzegovina.

20             Although this is the period when I was not -- no longer in the

21     government, I assume that this is a decision putting into circulation

22     coupons that were of higher value.  Obviously, inflation had taken its

23     toll and it was necessary to introduce coupons of a higher value in order

24     to reduce the amount of paper involved.

25             The second question, whether there was a currency that was valid

Page 29964

 1     throughout Bosnia and Herzegovina formally, yes, it was the dinar issued

 2     by the National Bank or, rather, issued by the central bank of Bosnia and

 3     Herzegovina.  This decision was passed in the month of August.

 4             In essence, this was a situation that cannot be described simply.

 5     There was not a single currency that prevailed physically throughout the

 6     area.  In Sarajevo, there was these coupons.  Other municipalities had

 7     issued their own coupons, I will have to check the dates but I think that

 8     the districts of Zenica and Tuzla had already introduced the German mark

 9     as their currency so there was this great deal of variety throughout

10     Bosnia and Herzegovina.

11             MR. KARNAVAS:  Mr. Primorac, I want to thank you very, very much

12     for answering my questions and I trust you will answer any other

13     questions with equal clarity no matter where they come from in this

14     courtroom.  Thank you very, very much.

15             Your Honours, I have no further direct.

16             JUDGE ANTONETTI: [Interpretation] We are going to have a break.

17     I think it's best to break now.  And we will resume in 20 minutes' time.

18                           --- Recess taken at 12.26 p.m.

19                           --- On resuming at 12.49 p.m.

20             JUDGE ANTONETTI: [Interpretation] The hearing is resumed.  Let me

21     ask the Defence teams.  2D?

22             MR. KHAN:  Your Honour, I'm grateful.  On behalf of Bruno Stojic,

23     we have no questions of this witness.  Thank you.

24             JUDGE ANTONETTI: [Interpretation] Thank you.  Mr. Kovacic, 3D.

25             MR. KOVACIC:  [Interpretation] Your Honour, General Praljak's

Page 29965

 1     Defence will just have a few questions, just a few minutes, but my

 2     colleague Ms. Tomasegovic would be in the right order.

 3             MS. ALABURIC: [Interpretation] Your Honour, the Defence of

 4     General Petkovic will have no questions.

 5             JUDGE ANTONETTI: [Interpretation] Very well, you have the floor.

 6             MS. TOMASEGOVIC TOMIC: [Interpretation] Good afternoon,

 7     Your Honours.  I will say briefly what it is that I would like to put

 8     questions about.  It will have to do with the transactions of

 9     Energoinvest on the very eve of the war, that is to say, the late 1980s

10     and the early 1990s.  The witness said what his position was during the

11     direct examination and he spoke briefly of the Energoinvest company;

12     however, if the Trial Chamber believes that I go beyond the direct

13     examination in my questions, I understand that the time would then be

14     taken away from the overall time given to the 5D Defence.

15             JUDGE ANTONETTI: [Interpretation] Go ahead, ask your questions

16     since the witness said that he worked in that company and I myself had

17     wondered as to the importance and the part played by this company in the

18     general economy.

19             So please go ahead.

20             MS. TOMASEGOVIC TOMIC: [Interpretation] Also, by your leave, I

21     have two documents that I do not wish to tender through this witness,

22     however, I have prepared them for the sole reason of showing them to the

23     witness in order to jog his memory so that we could move on more quickly.

24     This is an economic project 20 years ago so I would just like to remind

25     him of what this was all about.

Page 29966

 1                    Cross-examination by Ms. Tomesagovic-Tomic:

 2        Q.   Good afternoon, sir, I am Dijana Tomasegovic-Tomic

 3     attorney-at-law from Zagreb and I act as Defence counsel for

 4     Mr. Valentin Coric in these proceedings.

 5             Since I see that both you and I seem to be fast speakers, I will

 6     kindly ask you to ask you to listen to the interpretation and when you

 7     hear that it is over, only then start giving an answer.  So please give a

 8     brief pause between my question and your answer.  Mr. Primorac, you told

 9     us that in the 1980s, you were the vice-president of the business board

10     of Energoinvest; am I right?

11        A.   That is right.

12        Q.   Tell me, please, do you remember or, rather, do you know how many

13     people were employed by Energoinvest at the time?

14        A.   In the period when Energoinvest was in full swing, I can say

15     between 1980 and 1985, the maximum number of employees was 55.000.  After

16     that, some of the organisations separated from Energoinvest.  If I

17     understand you correctly, you are referring to 1989 and 1990.  I don't

18     know the exact figure for that period but I assume that it was about

19     50.000 employees.

20        Q.   Tell me, please, Energoinvest had a market throughout the

21     territory of the former Yugoslavia and I assume that it was also involved

22     in exports outside the former Yugoslavia?

23        A.   Energoinvest had companies or factories throughout the former

24     Yugoslavia, all the republics of the former Yugoslavia.  I stand

25     corrected.  This happened when the company was in full swing.  Later on,

Page 29967

 1     some of these companies separated from Energoinvest.  As for exports, it

 2     was the biggest exporter of the former Yugoslavia.  Energoinvest exported

 3     to about 30 countries throughout the world.  These exports amounted to

 4     $800 million per year in the years of our greatest activity.

 5        Q.   Since this was in the time of Yugoslavia and since this was such

 6     a big company, it was only natural that this company employed persons of

 7     all ethnic backgrounds, that Serbs, Croats, Bosniaks were employed and

 8     all the others in the company; right?

 9        A.   At the time, no one paid any attention to that, to how many

10     persons from what ethnic background were employed in the company.  It was

11     only natural that persons of all ethnic backgrounds were employed there

12     so that question was totally irrelevant while I was there.

13        Q.   Tell me, sir, Aluminij Mostar, was this an organisation that was

14     within Energoinvest in 1987?

15        A.   May I just say two things before giving a direct answer?

16     Energoinvest built Aluminij Mostar.  The first contract with Pechiney, a

17     French company, was signed in 1969.  The Alumina factory was commissioned

18     in 1975, the electrolysis factory Elektroliza Mostar, the best-known

19     company, was commissioned in 1981.  After that, Aluminijumski Kombinat

20     Mostar separated from Energoinvest but I think that was in 1989.

21        Q.   Thank you very much.  Before I put the question, could the usher

22     please give the witness these documents so that he can have a look at

23     them so that ...

24             Witness, our usher will now give you two documents.  One document

25     pertains to the project of the factory in Citluk and the other document

Page 29968

 1     is an opinion of the chamber of commerce of Bosnia and Herzegovina about

 2     this same project.  Now I'm going to ask you whether you remember that in

 3     1987, this project was developed within the programme of the Citluk

 4     factory.  We see here that the author of the project is the work

 5     organisation Energoinvest Aluminij Mostar and that within this project in

 6     addition to this factory, yet another factory was supposed to be built in

 7     Ljubusko?

 8        A.   Let me just continue along what you were saying.  You were right

 9     in 1987, that was the case and it is shown that by these documents.  Our

10     policy was, in our company, to build as many processing facilities as

11     possible throughout Bosnia and Herzegovina with the objective of having

12     primary aluminium that was produced in Mostar processed throughout Bosnia

13     and Herzegovina, that is better than exporting raw aluminium.  Several

14     different facilities were built for that purpose throughout Bosnia and

15     Herzegovina, I can tell you what they were if necessary.  I was not

16     directly involved in this line of work at the time but I think that this

17     was a programme that implied that a new factory would be built in Citluk

18     and I think that this was a topical programme but the factory was not

19     built.

20        Q.   Sir, do you remember the protagonists of these project, do you

21     remember -- it's on the next page, Zarko Bilic, Radoslav Krkelic [phoen],

22     Sadik Dizdarevic, Valentin Coric, Milan Jovicic, do you remember talking

23     to these persons and cooperating with them on this project?

24        A.   I know more or less all of these persons.  This is the director

25     of the secretary of development of the aluminium complex in Mostar, that

Page 29969

 1     is to say, the sector that was supposed to develop then.  It was

 2     Sadik Dizdarevic, if I remember correctly, he is referred to here as the

 3     protagonist or the -- I don't know exactly what his position was.  But

 4     the director of the OOUR in Citluk was Zarko Bilic, also a person I know

 5     well, Valentin Coric too, so all the persons mentioned here I think they

 6     were in a way involved in this project.

 7        Q.   Tell me, please, on the basis of this opinion of the chamber of

 8     commerce of Bosnia and Herzegovina, the metallurgy association from 1987,

 9     their opinion about this project.  This is the opinion on the

10     harmonization of this programme with the policy of development

11     established by the social plan of Bosnia and Herzegovina in the period

12     from 1986 until 1990.  What I'm interested in in relation to this

13     opinion, is the following:  When I look at the opinion and the project,

14     it seems to me, I'm a layman, I'm not a economist, I'm not a business

15     woman, I don't know much about this but it seemed to me that this was a

16     big investment, a meaningful investment that would be important for the

17     economic development of the area where the factories would be built in

18     terms of employing people, making money and so on.  Am I right?

19        A.   Yes, you are right, definitely.  As soon as the project was the

20     subject of harmonization within the chamber of commerce of Bosnia and

21     Herzegovina, it had to be a meaningful project.  I don't know what its

22     actual size was but since it had to undergo this procedure, it certainly

23     had to be a significant project.

24        Q.   My last question.  Tell me, please, Energoinvest, this is a

25     hypothetical question, actually that I'm going to put but you were on the

Page 29970

 1     board, you held one of these top positions so I'm sure that you will be

 2     able to answer.  I'm referring to Energoinvest and the investors and the

 3     protagonists of this project.  If anyone knew that there could be a war

 4     or had planned a war, would they go for such a project and in that case,

 5     would they plan to build this kind of factory because this is not a

 6     one-year project that would simply cease to exist after one year.

 7        A.   I can give you an answer along the same lines of your question.

 8     Anyone who thinks that something will happen that will destroy his

 9     investment will not go for that kind of thing.

10             MS. TOMASEGOVIC TOMIC: [Interpretation] Thank you, sir.  No

11     further questions.  Thank you, Your Honours.

12             MR. IBRISIMOVIC: [Interpretation] Mr. President, Mr. Pusic's

13     Defence doesn't have any questions.  Thank you.

14             JUDGE ANTONETTI: [Interpretation] Mr. Kovacic.

15             MR. KOVACIC: [Interpretation] Thank you, Your Honour.

16                           Cross-examination by Mr. Kovacic:

17        Q.   Good afternoon, Mr. Primorac.  My name is Bozidar Kovacic.  I am

18     counsel for General Praljak here.  I just have two small subjects to deal

19     with.  One question directly pertains to some of the things that you

20     stated during the course of your testimony.

21             Your Honours, I think that the first question would be belong to

22     the category of pure cross-examination so I think that it should not be

23     taken from my time afterwards.

24             Mr. Primorac, you mentioned during your testimony this problem of

25     workers' remittances or specifically pensions that many citizens of

Page 29971

 1     Bosnia and Herzegovina received from foreign countries on the basis of

 2     their previous work abroad especially in Germany.  In that context in

 3     order to enable the Trial Chamber to understand the gravity of the matter

 4     at that time in the former Yugoslavia and when Yugoslavia was breaking up

 5     in the first period of the war, workers' remittances was an expression

 6     that was bandied about.

 7             Can you explain to the Trial Chamber why this was an important

 8     category?  What this was all about?  Especially in terms of foreign

 9     currency?  Also, could you tell us what it meant specifically for the

10     economy of Bosnia and Herzegovina?

11        A.   Starting from 1965, the citizens of Bosnia and Herzegovina could

12     get passports more easily and go and work abroad.  Most of them worked in

13     Germany but there were others working in other countries, France,

14     Switzerland, Austria, Sweden.  Most of them went there to work for a

15     temporary period of time in order to make more money to upgrade their

16     family situation, increase their standard of living, et cetera.

17             They stayed there and during the year they would come once or

18     twice to visit their parents or their homeland.  Throughout the year,

19     they sent money to support their families so these were these

20     remittances.  These were very significant amounts from the point of view

21     of the balance of payments of the country and also very significant

22     amounts as a source of foreign currency for paying for the import of

23     goods and all the other needs that existed in the state.

24             The money that arrived in Yugoslavia, in Bosnia and Herzegovina,

25     could be deposited in savings accounts or they were converted into

Page 29972

 1     dinars, financing the needs of the families of the persons who were

 2     employed abroad.

 3        Q.   Thank you.  Let's just add one more thing in relation to that,

 4     perhaps.  As a citizen of Bosnia and Herzegovina irrespective of all the

 5     high positions you held, you certainly knew because any average citizen

 6     would know, this same category of people, migrant workers as they were

 7     called, were they the people who helped their homeland, in this case,

 8     Bosnia and Herzegovina, through voluntary contributions, donations to

 9     their municipalities, to their own municipality in order to help secure

10     weapons, humanitarian aid and so on?

11        A.   I heard that such efforts were made by our people abroad and that

12     resources were collected for defence purposes.  I did not have experience

13     with that kind of remittance so I am not in a position to answer.

14        Q.   Thank you.  That will do.  And now, another group of questions

15     that I will be using for a different purpose.  And I believe that you

16     will be able to answer these questions.  Bearing in mind your CV or,

17     rather, the line of work that you were involved in up until the beginning

18     of the conflict in Bosnia and Herzegovina, my question would be as

19     follows:  Did you know Dr. Tanja Kesic?

20        A.   Yes, I did know her and I still know her.

21        Q.   Tell us, is it correct that Dr. Tanja Kesic was a professor at

22     the University of Sarajevo, the school of economics?

23        A.   That is correct.

24        Q.   Do you know that that person is the sister of General Praljak who

25     stands accused here?

Page 29973

 1        A.   Yes.

 2        Q.   Did you know Dr. Pero Kesic, her husband?

 3        A.   Yes, he worked with me.

 4        Q.   So he worked in Energoinvest?

 5        A.   Yes, he worked in Energoinvest and also at the school of machine

 6     engineering but also at the research and development institute of

 7     Energoinvest.

 8             MR. KOVACIC: [Interpretation] Thank you, Mr. Primorac.  I have no

 9     further questions.  Thank you.

10             JUDGE ANTONETTI: [Interpretation] Yes, Mr. Praljak.

11             THE ACCUSED PRALJAK: [Interpretation] Just two questions by way

12     of a supplement, just for you to know exactly what the amounts of money

13     were that were coming into Bosnia and Herzegovina throughout the 1990s

14     through these remittances and the amount in pensions which is another

15     subgroup of the same thing and what that might today.  These are the two

16     questions that I would like to ask the witness.

17             JUDGE ANTONETTI: [Interpretation] Well, are you competent in this

18     field?

19             THE ACCUSED PRALJAK: [Interpretation] Of course, Your Honour.

20     I'm qualified to ask this because I was a political enemy of the system

21     that was in place at the time because they were hiding the amounts of

22     money that were actually coming in and the extent to which the state

23     subsisted based on those remittances coming in from abroad.  I have been

24     monitoring the situation for over two decades and I'm privy to the issue.

25             JUDGE ANTONETTI: [Interpretation] Fine, put your question.

Page 29974

 1                      Cross-examination by the Accused Praljak:

 2        Q.   Good afternoon, doctor.

 3        A.   Good afternoon.

 4        Q.   Based on your information, what were the amounts in terms of

 5     dollars of these remittances of migrant workers working abroad on average

 6     per year between 1965 and the 1990s?

 7        A.   I definitely can't answer that question because that information

 8     is not available to me; however, if you want that information, it should

 9     be available if you go to the original documents that were produced at

10     the time and you can find it in documents published by The National Bank

11     because they were in charge of foreign currency transactions.  I

12     certainly couldn't support your idea and your suggestion that this was

13     being hidden because that was all open and all the transactions were

14     recorded in the chequing account of the country itself and it should be

15     easy enough to track this sort of information down, if you try hard

16     enough.

17        Q.   I didn't say that this was being hidden systematically or that

18     the national bank didn't exactly publish but it didn't publicise this.

19     Nevertheless, according to your information from the 1980s, what were

20     these workers' remittances that were being sent in to Bosnia and

21     Herzegovina from somewhere abroad, what was the amount?

22        A.   Again, you expect me to extemporize.  I simply don't have that

23     information.  I am a man who deals with stuff like that but whenever I

24     encounter myself in a situation where I need specific information, I go

25     back to the source, I study the source and I arrive at my information.

Page 29975

 1     Therefore my answer is the same as the previous one.  You should go to

 2     the Bureau of the National Bank of Bosnia and Herzegovina.  It should be

 3     simple enough; maybe it's on the internet.  It wasn't available then

 4     because there was no internet to speak of at the time but there are

 5     appropriate publications and I think this information is available in the

 6     public domain.

 7        Q.   Would you agree with me that today's remittances of workers,

 8     migrant workers living abroad to Bosnia and Herzegovina are over 20 per

 9     cent of its budget?

10             JUDGE ANTONETTI: [Interpretation] Slow down, please.

11             THE ACCUSED PRALJAK: [Interpretation]

12        Q.   Do you know that the remittances of migrant workers or people

13     living abroad from the federation or part of Bosnia and Herzegovina today

14     are over -- amount to over 20 per cent of the federation's overall

15     budget?

16        A.   Mr. Praljak, I'm an economist.  There is no room for

17     improvisation in my profession.  Firstly, this information can be

18     obtained, what the remittances amount to in relation to the BH's overall

19     budget.  But I must remind you of one thing, these remittances don't go

20     straight to the budget of Bosnia and Herzegovina; this is sent directly

21     to families or rather the beneficiaries.  The budget of Bosnia and

22     Herzegovina is something that is accumulated or something that is

23     replenished, if you like, from taxes, customs and other kinds of income.

24     You have these two values and there may be a relation between them of

25     some kind but there is no direct link.

Page 29976

 1        Q.   Mr. Primorac, I said over 20 per cent of the budget, I didn't

 2     mean to imply that they were part of the budget or being sent into the

 3     budget but this is simply a cumulative amount of money and many people

 4     use this to get by.

 5             Thank you very much for your answers.

 6             THE ACCUSED PRALJAK: [Interpretation] Your Honours, I will do my

 7     best to show exactly what these amounts were, remittances by workers from

 8     abroad for Yugoslavia, for Bosnia and Herzegovina, what the pensions were

 9     in such municipalities such as Livno and Orasje sometime in the late

10     1980s.  Thank you very much.

11             JUDGE ANTONETTI: [Interpretation] Cross-examination is now over,

12     cross-examination by the other accused so the Prosecution has the floor

13     for its own cross-examination.

14             MR. KRUGER:  Thank you, Mr. President.  Good afternoon,

15     Mr. President, Your Honours, everybody in and around the courtroom.

16                           Cross-examination by Mr. Kruger:

17        Q.   Dr. Primorac, good afternoon.  I'm Pieter Kruger and as you

18     gathered, I'm with the Office of the Prosecutor.

19             Sir, I see that from what you have just told General Praljak, you

20     are an economist and as you said, there is no room for improvisation.  I

21     take it that you are not comfortable as a politician.

22        A.   Economists deal in figures, no room for improvisation.  Figures

23     are always easy to prove.  Politicians in that respect at least and

24     that's the way I see it, have a situation that is somewhat easier because

25     they deal in words.

Page 29977

 1        Q.   Now, sir, the time that you were Minister of Finance, would that

 2     be fair to say that was virtually the only period that you had to

 3     function as a politician in some way?

 4        A.   Yes, purely as a politician, although some of my previous

 5     positions, for example, the head of the chamber of commerce, although

 6     that was about economics, in essence, but in the former system, to some

 7     extent it had to do with politics as well.  Therefore, throughout the

 8     previous period before I became minister, I did overlap with politics in

 9     one way or another from time to time.

10        Q.   Thank you.  Now, sir, you told the Court yesterday that you were

11     never in the HDZ or were never a member of the HDZ; that's correct?

12        A.   That's correct.

13        Q.   Were you, however, in 1992, a member of the -- of another party,

14     the SDP?

15        A.   I stopped being a member of the League of Communists of

16     Yugoslavia after it was dissolved.  If I may just remind you, the breakup

17     of the party began in 1989 at what is known as the 14th Party Congress.

18     All the republics, some at a faster pace, some at a lower one, disbanded

19     their own party formations.  Once I stopped being a member of the

20     League of Communists I never joined another political party.

21        Q.   Now, how did it come that you were appointed Minister of Finance,

22     to a political function?

23        A.   I wasn't familiar with any debates at any of the Presidency

24     meetings but I'll describe the process for you, how this worked.

25     Jure Pelivan's government in April 1992 resigned.  This was a period when

Page 29978

 1     the aggression against Bosnia and Herzegovina commenced.  There followed

 2     a period when there was no government at all.  Formally they had

 3     resigned, the former Serb ministers left Sarajevo and there was a lot of

 4     speculation among the public as to who the new prime minister would be.

 5     It was always supposed to be a Croat though.

 6             Finally, I was called by the government, I had an interview and I

 7     suppose a decision that was eventually taken was for a number of people

 8     who had no political affiliations to become members of the government.

 9     People with no political links but people who enjoyed a high profile in

10     Bosnia and Herzegovina from all three ethnic groups.  That is how my late

11     Serb friend Ugljesa Uzelac joined, he used to be the mayor of Sarajevo;

12     writer Bruno Kolac; and then a Muslim also, Turajlic, who was not a

13     member of any of the political parties, Asim Muratovic.  As far as the

14     Croats were concerned, I was there and Martin Raguz joined as well.

15             As far as I know if you look at all the names that I've

16     mentioned, as far as I know, Raguz was the only one who was a member of

17     the liberal party.  Aside from that, none of us others were members of

18     any political parties or had any political affiliations at all.

19        Q.   Could I just check.  Earlier you had said that you never, after

20     the breakup of the League of Communists joined another political party;

21     however, at page 87, line 16 and 17, you say that you were a member of

22     the liberal party.  Could you perhaps just explain that?

23        A.   I don't know which document you have in mind.  I can't see that.

24     Secondly, I was not a member of any party including the liberal party.  I

25     said that if you look at the names that I've mentioned, I assume that

Page 29979

 1     Raguz was the only one who was a member of the liberal party.

 2        Q.   Sorry, I misread and I misheard.  My apology.

 3             Was there any pressure or any attempts to get you to join the

 4     HDZ, for instance?

 5        A.   No.  No.  What's more, I think the then leaders of the HDZ

 6     considered me to be somewhat of a leftist.  I don't think they ever would

 7     have planned for it.

 8        Q.   You are a Croat.  Is there any reason or could you explain why

 9     you did not join the HDZ?

10        A.   I am a Croat, that's true.  But there is no particular reason I

11     never joined the HDZ.  I never received an invitation.  Even if I had, I

12     wouldn't have done it all the same.  Quite simply, I did not wish to have

13     any form of political involvement.  I explained that to Mr. Karnavas

14     yesterday when he asked me why I had not been a member of the government

15     and what my positions had been before the war.  I preferred my own field

16     of expertise.  I preferred that over joining the HDZ or any other

17     political party at the time, truth to tell.

18        Q.   Okay.  And if you say that the HDZ would have regarded you as

19     somewhat of a leftist, does that imply that you did not necessarily agree

20     with all the policies of the HDZ?

21        A.   You see, anybody with my political beliefs at the time, the

22     belief that it was no great fortune that we had national parties in power

23     now, but it was a sign of the times.  Those were the parties elected by

24     the voters of Bosnia and Herzegovina and those parties were then given a

25     mandate to put together a government.

Page 29980

 1        Q.   Now, sir, I'd very quickly like to just clear up one matter.  If

 2     we can look at -- and this is in the binder that -- yes, thank you, the

 3     binder that you're just receiving.  The document I wish to refer you to

 4     and so other people can also start looking for it is P 10504.  Document

 5     P 10504.

 6             As you will see, this is a Reuters report by -- do you have it?

 7     By a Hugh Pain and it was an interview that was conducted with you around

 8     about 20 July 1992.

 9        A.   First of all, may I ask you by any chance do you have a Croatian

10     copy of this?

11        Q.   My apologies.  If you turn two pages -- my apologies.

12        A.   I remember this.

13        Q.   Now, we'll get back to the -- to this article in a bit more

14     detail but the only thing I now wish to clear out with you is in the

15     English version, if we turn to the second page, and on yours -- I'm just

16     quickly checking in your version, you will see it's on page 3 of your

17     version.  There is a paragraph saying, "Emphasising" it reports what you

18     said, "Primorac indicated that" and then it says, "Emphasising that the

19     plan was his own" this is now for the reconstruction fund "and had not

20     been adopted as official policy.  Primorac, who retains his former post

21     as vice-president, the Energoinvest industrial combine envisaged ..." and

22     then it goes ahead.

23             My question, sir, is at the time when this was -- when you gave

24     this interview, you were already or you had just become the Minister of

25     Finance of the BiH but is it correct, this, that you were also at that

Page 29981

 1     stage still vice-president of Energoinvest?

 2        A.   In an operative sense, I wasn't, but if you want me to be as

 3     specific as I can as to my employment documents, my employment book, it

 4     stayed with the company with Energoinvest and it stayed that way all the

 5     way until March 1993 which is when my links with Energoinvest were

 6     eventually severed.  So in a formal sense, yes, I was still their

 7     employee.  But I was by this time already a full-time minister with the

 8     BH government.

 9        Q.   At this stage, were you still a professor or a lecturer at

10     Sarajevo University or had you ended that part?

11        A.   I remained a lecturer at the Sarajevo University until the war

12     broke out.

13        Q.   Sir, if we can move on to your career as Finance Minister,

14     Minister of Finance.  Yesterday, and for this, I don't know if it's

15     necessary that you return to it but you were shown the decision that is

16     in the Defence binder 1D 02645 and this was the decree by which you were

17     appointed along with 16 other persons as Minister of Finance and 16 other

18     people who were appointed as different ministers.

19             Do you recall that document?

20        A.   I do.  But do I have it in the file in front of me?

21        Q.   No.  I don't think it's necessary that we look at it and what I

22     would like to ask you:  Apart from 16 persons being appointed as

23     ministers, is it correct that 3 persons were appointed as vice prime

24     ministers?

25        A.   That's right.  Mr. Turajlic, Simovic and Lagumdzija, yes, that's

Page 29982

 1     right.

 2        Q.   And is it also correct that the same document or by the same

 3     decision, Mr. Jure Pelivan was appointed as prime minister?

 4        A.   That's right.

 5        Q.   Now, this group of people, would they have been known as the

 6     cabinet?

 7        A.   You could put it that way.

 8        Q.   To understand how this functioned, the executive would have been

 9     the Presidency.

10        A.   No.  No.  The Presidency, that was under the constitution.  The

11     Presidency, in a way, took over the function of the BH Assembly which was

12     a legislative function because the assembly could not meet under those

13     conditions.  Nevertheless, the Presidency did have a number of executive

14     powers, probably as concerned defence on behalf of the parliament of

15     Bosnia and Herzegovina, the executive body was the government of the

16     Republic of Bosnia and Herzegovina and according to the same logic, the

17     government in times of war as well.  Apart from the fact that the

18     constitution provides for certain functions, certain powers for the

19     Presidency defence and so on and so forth.

20        Q.   Okay.  So the cabinet was basically where the decisions were

21     taken and from the cabinet, the decisions were implemented.  What I'm

22     referring to is basically the governance, the basic decisions for

23     governing Bosnia and Herzegovina.

24        A.   Let's try to see this matter through.  The Assembly at the time

25     could not pass any laws because it wasn't meeting, was it?  One needed to

Page 29983

 1     inform -- to transform almost the entire legislative framework from a

 2     peacetime one to a wartime one.  This is how the procedure worked.  In

 3     order for the government to propose decree laws, and those proposed

 4     decree laws would then need to be ratified by the Presidency and as soon

 5     as the Presidency ratified them, the decree laws would take effect.  So

 6     the government would propose laws and then after that during the

 7     implementation stage.  So that was the situation.

 8        Q.   The cabinet, how regularly or did the cabinet meet, and I'm

 9     referring to it as cabinet for convenience.  Did the cabinet meet in the

10     initial phases when you were appointed, regularly, once a week, for

11     instance?

12        A.   At the time, the cabinet was meeting with far greater frequency

13     but before I answer your question, please allow me another explanation.

14     The government worked through its ministries, there were groups -- the

15     three deputy prime ministers had the role of coordinating.  Let me take

16     the example of deputy minister Turajlic.  He worked with ministries that

17     had to do with the economy, the country's industry and so on and so

18     forth.  Coordination had nothing to do with the executive aspect of the

19     government, the responsibility was ours, the ministers, but we had to

20     coordinate among ourselves because sometimes there were conflicting

21     interests and situations and then these proposals would be tabled to the

22     government.  That was the system according to which we worked at the

23     time.

24             There were other commissions and other bodies but that is not as

25     important.  How often were we meeting?  Were we meeting?  I think there

Page 29984

 1     were periods where we had daily meetings.  This was a time of war and

 2     there were countless regulations that needed passing and needed

 3     processing at the time.

 4             All of that was difficult to get there at the time.  My own

 5     office was at the national bank building, the distance from the

 6     government building being 300 metres.  I'm not trying to get

 7     overemotional here but let me paint a picture for you.  There were

 8     certain situations where it was simply impossible for me to cross the 300

 9     metres simply because we were being showered by bullets at all sides.

10        Q.   I can imagine that it was difficult to get all those ministers

11     together.  I understand the situation.

12             Sir, under those circumstances when there were, for instance,

13     daily meetings, how would it be notified that there was a meeting?  Would

14     it be a preset time and place or would ministers be given an agenda and

15     summoned to a meeting?

16        A.   As a rule, materials would be prepared, a whole pile of those in

17     fact.  Depending on their nature, they had to go through this

18     coordination procedure that I told you about and then that would go to

19     the government.  More often than not, the next meeting would be scheduled

20     at each of the meetings.  If all of the materials had not been sorted

21     yet, they would be delivered by one of the drivers in due course and they

22     would be waiting for us at our tables as soon as we came to a meeting.

23        Q.   The prime minister, did he normally chair these meetings?

24        A.   Yes, as a rule whenever he was in Sarajevo.  The period that I'm

25     talking about when I was physically there, I think he was twice away from

Page 29985

 1     Sarajevo which is where the appropriate deputy would stand in for him.

 2     More often than not, this was Mr. Turajlic.

 3        Q.   Now, how did it function when -- or what was the procedure when

 4     somebody was away from Sarajevo on official business or unable to attend,

 5     would that person, a minister or a deputy, would that person designate

 6     somebody else to attend the meetings in his or her stead?

 7        A.   Whenever a minister was away for whatever reason, it was

 8     customary for his or her deputy to appear at the government meeting.

 9     This was very much the established practice.  However, if even the deputy

10     was unable to attend, then the third in command, so to speak, would need

11     authorisation to attend a government meeting.

12        Q.   And what about the minister who is at the top of that ministry's

13     pyramid who was away?  Would he at least coordinate with his deputy or

14     then the third person who was going to attend to give some feedback on

15     his or her own activities away from Sarajevo?

16        A.   I don't know how this worked in the other ministries, but I can

17     tell you about mine.  I had very close cooperation with my own deputy.

18             THE INTERPRETER:  The interpreters did not catch the name.

19             MR. KRUGER:

20        Q.   Could you please repeat the name of your deputy?

21        A.   Muhamed Logo.

22        Q.   And what was he, was he a deputy minister or ...

23        A.   He was the deputy minister.

24        Q.   Did you appoint him yourself or was he also appointed by

25     decision?

Page 29986

 1        A.   I didn't have the power to appoint him.  He was appointed --

 2     well, I can't be certain but I think both the ministers and the deputies

 3     were appointed by the Presidency.  If not, it was a government decision.

 4     It certainly wasn't within my power to make that sort of appointment.

 5             There is something else you need to bear in mind though.  At the

 6     time, one thing that was always taken into account was the ethnic

 7     breakdown if you looked at the top-ranking positions in the government of

 8     Bosnia and Herzegovina.  We tried to achieve some sort of a balance.  If

 9     the minister was a Croat such as I was, his deputy would be a Muslim, or

10     the other way around.  We tried to achieve this sort of balance.  This

11     was very much the established practice.

12        Q.   Sir, in the few minutes remaining, just for a further basis for

13     understanding your position, I'd like to ask you a little bit about how

14     your -- what the structure of your department was or your ministry.  You

15     were the minister, you had a deputy minister.  What was beneath you?  You

16     referred to the Ministry of Finance being in the banka building or the

17     bank building.  Could you just describe the structure briefly?

18        A.   Yes, small correction, the ministry was not in the bank building,

19     my office was.  The ministry was in the same building but opposite the

20     entrance and my office was in the central wing of the building.  Apart

21     from the deputy, there was several assistants there as well.  I don't

22     know how many.  Probably a total of four or five.  They were in charge of

23     certain sectors.  For example, there was an assistant for budgetary

24     issues.  There was a customs assistant, a banking assistant.  That sort

25     of thing.  There were several assistants who covered various fields of

Page 29987

 1     the ministry's activity.

 2        Q.   And perhaps just a final question for today, I think, or final

 3     topic.  So these assistants, they were basically the managers but if you

 4     went down from them, you would probably go into the various offices of

 5     the Department of Finance throughout Bosnia and Herzegovina.

 6        A.   Once you went below that level, there were department heads or

 7     sector heads, if you like.  Most of the activity took place in Sarajevo;

 8     however, there was services and sub-ministries of the finance ministry

 9     and there were certain outposts, so to speak.  I would need to think back

10     and think hard to remember exactly how this worked and explain that to

11     you, but there were certain sections of the ministry, the customs

12     section, for example, and those had to be outposts, they had to be

13     elsewhere and not in Sarajevo by virtue of their job.

14             JUDGE ANTONETTI: [Interpretation] We need to stop now,

15     Mr. Kruger.  There is another hearing after us and I'm involved myself in

16     another trial.

17             It's almost quarter to 2.00.  Witness, we shall meet again

18     tomorrow morning.  I trust that you will be able to leave afterwards and

19     that you will not have to wait until next week.

20             We shall reconvene tomorrow at 9.00.

21                           ---Whereupon the hearing adjourned at 1.45 p.m.

22                           to be reconvened on Thursday, the 26th day of June,

23                           2008 at 9.00 a.m.