Tribunal Criminal Tribunal for the Former Yugoslavia

Page 35221

 1                           Tuesday, 13 January 2009

 2                           [Open session]

 3                           [The accused entered court]

 4                           [The witness entered court]

 5                           --- Upon commencing at 2.15 p.m.

 6             JUDGE ANTONETTI: [Interpretation] Mr. Registrar, kindly call the

 7     case.

 8             THE REGISTRAR:  Good afternoon, Your Honours.  Good afternoon,

 9     everyone in and around the courtroom.  This is case number IT-04-74-T,

10     the Prosecutor versus Prlic et al [Realtime transcript read in error,

11     "Momcilo Perisic"].  Thank you, Your Honours.

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

13     Today is Tuesday, 13th of January, 2009.  I said 2009 because it seems

14     that it is 2008 on the transcript still, so we really have to keep a

15     tight watch on everything in this courtroom.  I'll first greet the

16     witness.  Good afternoon to the accused, the Defence counsel, Mr.

17     Stringer and all the Prosecution team, and good afternoon to all the

18     people assisting us.

19             We are going to continue with this witness's testimony.  You may

20     proceed, Mr. Karnavas.  Again, good afternoon to you.

21             MR. KARNAVAS:  Good afternoon, Mr. President.  Good afternoon,

22     Your Honours.  Good afternoon to everyone in and around the courtroom.

23                           WITNESS:  MILAN CVIKL [Resumed]

24                           Examination by Mr. Karnavas: [Continued]

25        Q.   Good afternoon, Mr. Cvikl.

Page 35222

 1        A.   Good afternoon.

 2        Q.   As I understand it, we left off yesterday with slide 27.  That's

 3     when I cut you off a little bit because we were out of time, and so now

 4     we are getting into slide 28, so without further adieu, if you could --

 5             JUDGE ANTONETTI: [Interpretation] One moment, Mr. Karnavas.  We

 6     now have a new court reporter, and I see another mistake on line 6 on

 7     page 1.  This is Prlic et al and not Momcilo Perisic as you can see on

 8     line 6.  I'm not going to spend my time on spotting mistakes, but if

 9     anyone does, they should tell me so that I could take a rest.

10             MR. KARNAVAS:  Thank you, Mr. President.  Well, at some point we

11     do know that the transcript will be cleaned up, and we know that these

12     sorts of errors do occur rarely.

13        Q.   Mr. Cvikl, if we can now turn to slide 28 so we can complete this

14     section before we go on to the three phases, and you can begin.

15        A.   Thank you very much, Your Honours, Mr. Karnavas.  I would like to

16     make just one observation before we start.  Last night, I went through my

17     testimony and I also the check of the report and especially of the

18     documents which have been listed under the previous slide, the slide 27,

19     and I would like just to confirm for the record that what I have seen for

20     the first time were English translations of those documents.  However,

21     I've seen the original, the Croatian versions or the Bosnian version of

22     those documents before, but as we were preparing over the weekends for

23     the first time I have seen the English translation.  That's all that need

24     to be said with this.

25             In regards to the slide 28.  In this slide 28, I tried to

Page 35223

 1     summarise what is actually one of my findings on activities of local

 2     communities, and that is I have been asked to compare those activities,

 3     and as we have seen yesterday when you were presenting many documents on

 4     four major group of measures, measures to ensure defence, macroeconomic

 5     measures, microeconomic measures, and measures to ensure government

 6     services.  Notwithstanding whether these were measures undertaken in the

 7     local community with -- under the Bosnian control or with a Croat

 8     majority, I have not been seeing what was happening in Republika Srpska.

 9     But these were practically equal measures and those really equal measures

10     in practically all major areas.  They were all based on the task of the

11     local communities as defined in the old constitution both of Yugoslavia

12     and Bosnia-Herzegovina.  They were actually measures by local communities

13     to ensure logistic and the finance of defence, and then there were

14     measures were in the absence of the actions of the state authorities, the

15     central government authorities, they were undertaking macroeconomic

16     measures or they were undertaking measures to support and to provide

17     state and social services to the citizens.  That's why I say that

18     situation in Tuzla, Jablanica, Maglaj, Mostar, Livno, Travnik, Zenica,

19     Siroki Brijeg, Posusje, they were measures were all equal.

20             Logically why these local communities have to do that, since

21     there was a practically complete loss of communications and they were cut

22     off from the republic level provision of funds for those services, they

23     had to ensure economic stability in the economic area that they

24     controlled, and they had to provide -- ensure fiscal revenues to provide

25     social services, and I mentioned some of them in the bracket in the

Page 35224

 1     second bullet.

 2             So to certain extent, local communities acted like sovereign

 3     economies with a task to cover the basic needs of the citizens, to

 4     provide material support to the defence forces, and, of course, that was

 5     the basis, normalization of the life conditions for the people; once the

 6     defence was assured, that was the basis for reactivation of economic

 7     activities.  I'm also saying in the report and would like to reiterate

 8     here that these were urgent actions by local authorities and they were

 9     actually done in the circumstances of war economy, and in that context

10     they acted as one would act in similar conditions, notwithstanding what

11     kind of the political intentions were behind.  But I was looking into the

12     measures, and I can confirm these were the measures done in the interest

13     of all citizens in different local communities throughout

14     Bosnia-Herzegovina.

15        Q.   All right.  Unless there are any questions regarding this area,

16     we can now move on to slide 29, and hereinafter, as I understand your

17     presentation following your report, you describe what you came up with,

18     the three different phases of the Croatian community, Croatian Republic,

19     Herceg-Bosna; is that correct?

20        A.   That is correct.  I have been, of course, asked to analyse, and

21     in order to somehow identify differences in the -- in the situation in

22     the Croatian -- in the Croatian community of the Herceg-Bosna, I actually

23     divided this into three areas.  The first area -- the first period or the

24     first phase is really the phase when we have activities only at the level

25     of the local communities, and some limited activity by the presidency of

Page 35225

 1     the Croatian community of Herceg-Bosna; the second phase is then the

 2     phase when the executive authority had been established, the HVO of the

 3     Croatian community of the Herceg-Bosna; and the third phase and last one

 4     is the one when the parliament had been established and when the

 5     executive authority had been renamed itself in government and where they

 6     continue with the region-wide measures.

 7        Q.   Okay.  Thank you, Mr. Cvikl.

 8             Now, if we look on slide 29, there are some bullet points, and as

 9     I understand that you wanted to draw our attention to certain documents.

10     So if we could begin, that is, if you could give us a -- some remarks

11     before we go into each particular bullet.

12        A.   May I ask the usher to bring me my documents because they stayed

13     here.

14             Okay.  What was done in the first phase, what was done in the

15     first phase at the level of the local community of -- local communities

16     of Herceg-Bosna, there was, of course --

17             JUDGE ANTONETTI: [Interpretation] One moment, Witness.  Sorry for

18     interrupting you.  Let me go back to what you said earlier on, which was

19     absolutely essential and extremely relevant for the further deliberations

20     of judges as to the joint criminal enterprise.  If I understand you

21     properly, you said that we must grasp a situation at three levels:  First

22     level, that is the creation by local communities of some action plan in

23     this field; second level, the Croatian community or HVO has been created;

24     third stage, as you say, that would be somehow a parliamentary phase

25     because then the parliament has been established, which is to control the

Page 35226

 1     executive authority.

 2             And you seem to break down all of the events based on the three

 3     levels, and that could account for a great number of things.  The local

 4     level, that's the first level of intervention; second level, that's HVO;

 5     the third one being parliamentary control.  Is that what you meant?  I

 6     just want to ask you this for everything to be clear for everyone because

 7     this is a very intricate issue, and it really is worthy of comprehensive

 8     examination and scrutiny without avoiding any misunderstanding to start

 9     with.  Can you indeed confirm that as far as you see, the measures

10     undertaken have to be seen from the point of view of these three levels?

11             THE WITNESS:  Yes, Your Honour.  What am I writing in the report

12     is that there were three phases of development, not three levels, one

13     above the other, but three phases, one after another.  Why three phases?

14     My report, and I was asked to do -- to analyse the economic measures and

15     development in the area -- in the Croatian community, Croatian Republic

16     of Herceg-Bosna within the context of what was happening in the overall

17     Bosnia-Herzegovina.  As we were explaining what was happening first at

18     the local community level, I have also seen that in the similar manner as

19     in Tuzla region, the local communities that compound the Croatian

20     community of Herceg-Bosna acted in a very similar manner in that first

21     very phase.

22             Once they were acting as explained in this light, which means

23     that they organised the defence, they organised economic sector, they, of

24     course, ensure protection of the state -- yeah, the state regional

25     assets, they collected new fiscal revenues, they allocated fiscal

Page 35227

 1     revenues into budget.  Then there was immediate negative results of them

 2     acting independently because each of them acted in their own territory of

 3     a local community or municipality.

 4             So in the second phase of the developments, in order to assure

 5     region-wide measures, in order to ensure that, also, those local

 6     communities that were not -- maybe not backed so well off as some of them

 7     would also benefit from the region-wide measures.  I'll give an example.

 8     The local communities at which there was physically a checking

 9     cross-point of goods coming from Republic of Croatia into

10     Bosnia-Herzegovina, they benefitted because they were collecting customs.

11     We've seen some of the measures yesterday undertaken in Capljina.  So now

12     in the second phase, the executive -- the authority, the HVO of the

13     Croatian Community Herceg-Bosna has been established, and it had to

14     assure that not all funds stay in just one local community because there

15     were needs in other local community, you know, to undertake government,

16     social, and state services.

17             So in this second phase, HVO acted to ensure that there will

18     be -- we call economist economy of scale or we say that there will be

19     economic region-wide measures so that the balance of the economic

20     development and the benefit of economic development would be provided to

21     the whole region of Croatian Community of Herceg-Bosna.  And so that is

22     then the second phase, and I've seen that there is a difference between

23     the first phase when you have only actions by the local communities, and

24     there's a different with the second phase where you have, you know,

25     executive authority, HVO, undertaking some measures and actually

Page 35228

 1     fighting, "economically fighting," with local communities to take part of

 2     that -- some assets collected locally into the region-wide budget.

 3             And the third phase, time-wise, is the phase when this executive

 4     authority have been strengthened because the Croatian Republic of

 5     Herceg-Bosna had been established, and as we have seen, especially the

 6     second half of 1993 and early 1994, then you have government of these

 7     Croatian Republic of Herceg-Bosna acting, again, with economic measures,

 8     like established budget, and, of course, undertaking some of the

 9     measures.  And I'm also saying, and we will see this down the slides,

10     that the reason why in the second phase and in the third phase

11     authorities, regional authorities appeared is also connected with the

12     realisation by the presidency of Republic of Bosnia-Herzegovina, which

13     already in August 1992 realised that unless local communities are grouped

14     in what they call districts or counties, the country would economically

15     collapse.

16             So in the second and in the third phase, the activity which I

17     have seen in the Croatian Community and later Croatian Republic of

18     Herceg-Bosna are actually activity vested into them both by the

19     constitution and by a decree of the presidency of the Republic of

20     Bosnia-Herzegovina on the work of the districts, and that is what I then

21     also comment in my document in one of the slides later that had been

22     done.  But, yes, there are three phases down the line, one after another.

23             JUDGE ANTONETTI: [Interpretation] Witness, I can understand what

24     you say by the three phases based on economic reasoning, but if in my

25     mind, and possibly in any reasonable mind, there's always a connection

Page 35229

 1     with a political factor because economics and politics, that's a couple;

 2     that's a pair.  This reasoning that you've just set forth in economic

 3     terms, can it be applied to the political sphere, so there would have

 4     been three phases in political terms.  There would have been power vested

 5     with the local communities, thereafter a second phase in which the

 6     Croatian community was created with, as a third phase, the creation of

 7     the Republic of Herceg-Bosna.  So if you put together, if you link up the

 8     political and the economics?

 9             THE WITNESS:  Well, I have been asked to analyse economic

10     measures.  And so in that context, I cannot comment on the political

11     intentions.  But, you know, I'm politician, and of course when I act

12     either as the minister or when I acted as a general secretary, we are

13     working under a particular programme; and the programme, if you want a

14     political programme in this very area, was ensure the survival of the

15     population.

16             And in that context, the political decisions both at the level of

17     the Croatian Community of Herceg-Bosna as at the level of the Presidency

18     of Republic of Bosnia-Herzegovina have the same aim, ensure the survival

19     of the population, because otherwise -- I was surprised to a certain

20     extent but positively surprised seeing this presidency decree on

21     districts or on counties because it actually politically realised that if

22     central government is landlocked in Sarajevo, in order for the population

23     to survive, but not survive in 50 or 70, you know, small local economies

24     controlled by municipality, people would be better off if there would be

25     seven districts, seven counties established, and there would be rounding

Page 35230

 1     of economic measures at the wider region.  This is how I see this second

 2     and third phase.

 3             The second and third phase of development in the Croatian

 4     Community of Herceg-Bosna was to round economic -- economic area to

 5     further support economic developments and thus ensure not just the

 6     survival of the people, because the military activities more or less were

 7     over, but to ensure better economic conditions.  And if I go one more

 8     step, even later when the Federation of Bosnia-Herzegovina was

 9     established following the Washington Agreement - there's a time when the

10     war loan was start coming in - we have seen a lot of legislation, which

11     was simply if you want legislation of then-Croatian Community or Croatian

12     Republic of Herceg-Bosna transmitted to the level of the Federation of

13     Bosnia-Herzegovina.

14             So even when one analyse those economic measures, these were

15     measures for the benefit of ensuring -- to the ensure the economic

16     benefits to the people in the wider region, not just the very small local

17     community.  And that's why I'm saying, yes, there is a link between the

18     economics and the politics, but the economics and the economic needs of

19     the population were out there.

20             If I may, maybe for these people would be, you know, maybe even

21     better not to deal with these all issues.  They would simply let, you

22     know, borders not being established and this would slowly economically --

23     this part would be slowly economically completely integrated with

24     Dalmatia, which is, as we all know, part of the Republic of Croatia.

25     Now, there were attempts to round economic economies of the local

Page 35231

 1     communities in this Croatian Community of the Herceg-Bosna into an area

 2     that later merged into the Federation of Bosnia-Herzegovina.

 3             MR. KARNAVAS:  Very well.

 4        Q.   All right.  If we could stay -- staying with slide 29, and if we

 5     -- we did discuss briefly the various bullet points, and we can start

 6     with the first one, to organise the wartime finances, and as I understand

 7     you wanted to draw our attention as a way of example to 1D 00558.

 8        A.   Exactly.  This is the document issued by the Croatian Defence

 9     Council of the Mostar municipality, an action of the local community of

10     Mostar to organise, establish a decision on the organisation and

11     functioning of wartime finances.  And in Roman ii, in Article 3, it says:

12             "The following financial organisation shall continue to operate

13     in war."

14             And here, the public auditing service or the Social Accounting

15     Office is mentioned, the Privredna Banka Sarajevo with its basic bank in

16     Mostar.  And in Article 4, it says that some of the institution shall

17     cease to operate because they did not have conditions, but what is

18     important, it says in Article 10, that revenues generated from profit tax

19     shall be deposited in a separate account of the municipality.  And then

20     in Roman iii, Article 11, there was also a proposition that the Mostar

21     municipality HVO may float a war loan on the basis of voluntary

22     subscription.  And on Roman iv, on page -- on the bottom, 1D25-0158, in

23     Articles 14, 15, et cetera, the financing of public services is

24     described.  So this very decision of the Mostar municipality describes

25     what the local community of Mostar will undertake to provide, not just

Page 35232

 1     for the defence but to cover basic needs of the population.

 2        Q.   All right.  Now, if we go on to the next bullet point, to

 3     organise economic sector, I understand there are three documents you want

 4     to draw our attention to, the first one being 1D 00239.

 5        A.   Yes.  This is -- just as an example of a very similar decision.

 6     This is a decision of Tuzla municipal assembly to proclaim enterprises

 7     and financial institutions of special importance for Tuzla municipality

 8     in conditions of war.  And here it says in Article 1, Roman ii, point 1,

 9     the term of power system, Kreka, socially owned enterprise, Tuzla, is a

10     company which is of a special importance for Tuzla municipality in

11     conditions of war.

12             And in -- on the next page in Roman vii, it says under 1, that

13     Tuzla public auditing service is such an institution, and that -- in

14     point 2, that commercial banks Tuzlanska banka did it, Tuzla comerciana

15     [phoen] banka did it, Tuzla Union banka did it.  Sarajevo, Tuzla branch

16     are companies, institutions important for a situation in Tuzla, just an

17     example how in a similar manner as in Mostar, also in Tuzla regions, same

18     type of institutions were recognised as important to organise economic

19     sector.

20        Q.   Okay.  Now, if we go on to the next document concerning this

21     particular bullet point, and I believe it's 1D 02991.

22        A.   Yeah, that is a decision by Prozor municipality.  It's a decision

23     on announcement of general mobilisation in the area of Prozor

24     municipality, but it's even more.  In Article 2, it says that:

25             "All persons, men of the age 18 to 55 years and woman of the age

Page 35233

 1     18 to 50, with residence in the area of Prozor municipality are obliged

 2     to immediately be at disposal of Prozor municipality in order to be

 3     deployed to the military forces."

 4             That is, certain duties in civil protection or requisitioning of

 5     workers.  So there were military forces, but there were also logistical

 6     activities of economic sector to support those forces.  And second, what

 7     is important in this article -- in this decision is at the end of the --

 8     Article 3, that workers employed abroad are obliged to make a payment in

 9     the amount of one-quarter of their salary, that is, at least 500

10     Deutschemark, if they are up to the period that they would, of course,

11     respond to the announcement of general mobilisation, meaning that, again,

12     a measure which is, yes, a wartime finances and organisation of economic

13     sector measure undertaken in the local community in a very similar

14     measure that we have seen in some other areas in Bosnia-Herzegovina.

15        Q.   All right.  And then, finally, if we go to 1D 00805, I believe

16     this is the last document for this bullet point you wanted by way of

17     example to explain to us.

18        A.   This is a decision of Croatian Defence Council, Livno, wherein --

19     on first page, on the Roman i, in the first paragraph, it says that:

20             "Mobilisation and demobilization of assets..." and in the

21     bracket, "(vehicles, machinery, equipment, et cetera) shall be carried

22     out by the Defence office in accordance with establishment requirements

23     of the command of the HVO."

24             In the second paragraph, there is a request that:

25             "In order to effect more rational distribution and use of assets,

Page 35234

 1     the HVO command of the units must coordinate and redistribute assets with

 2     the Defence office."  The Defence office being the one providing Defence

 3     support.

 4             And then, second what I would like to point is if you turn to

 5     page 2, that is the page marked in the bottom right 1D 15-0196, and then

 6     in Roman iii it says that work organisations whose scope of operations

 7     becomes considerably reduced as a result of mobilisation of their

 8     resources shall prepare a business plan for operating with the available

 9     assets and manpower, which means that the local community authorities

10     through its Defence council, through its HVO clearly undertake a manage

11     to re-organise the economic sector in the war circumstances when before a

12     lot of assets had been mobilised.

13        Q.   All right.  Now, if we go on to the next bullet point where you

14     talk about to ensure protection of state/regional assets.  As I

15     understand it, by way of example you wanted to draw our attention to 1D

16     00579.  1D 00579.

17        A.   Yes.  This is a document issued on May 21st, 1992, by the Mostar

18     municipality:

19             "A decision on the establishment and tasks of the Mostar

20     municipal HVO commissioners and setting up managing functions in the

21     socially owned companies and institutions in the Mostar municipality

22     under wartime conditions."

23             Why this decision is important.  Local municipality, in order to

24     protect state regional assets that was vested in the local community by

25     the - at that time - Croatia -- Yugoslav, Slovene, Croatian, Bosnian

Page 35235

 1     constitutions as we have seen yesterday, in Article 2 established a new

 2     function:

 3             "A commissioner of the Mostar municipal HVO who is an authorised

 4     person appointed by the Mostar municipal at the proposal of the head of

 5     the department whose task is to review the organisation of the sphere for

 6     which the commissioner is appointed..." et cetera.

 7             What is important in Article 5 on the bottom of this, it is

 8     clearly says that the Mostar municipal HVO commissioner shall be

 9     appointed for the following spheres:  elementary education, secondary

10     education, culture, traffic, telecommunication and information,

11     non-ferrous metals industry, metal industry - next page - agriculture and

12     food processing industry, et cetera.  Even later, we have the hotel

13     management and tourism.  These are all measures that provide two things.

14     First, assets, that I'm still socially owned assets, but of course for

15     which the local community had an authority to protect them, were taken

16     care of now by this commissioners, and these commissioners were not just

17     taking care of those assets, but they were ensuring, especially in these

18     spheres as mentioned here that are the spheres of ensuring government,

19     social and state services, to undertake those and that especially here,

20     education, culture, et cetera.  And then, of course, they were also

21     responsible to take care what is happening in the industry manufacturing,

22     so a clear activity to ensure protection of state and regional assets.

23        Q.   And if we go on to the next bullet point where you note measures

24     to establish and collect fiscal revenues, you wanted to draw our

25     attention to several documents, the first being 1D 00635.

Page 35236

 1             THE INTERPRETER:  The interpreters would be grateful if the

 2     witness could read slowly.  Thank you.

 3             THE WITNESS:  Yes, I will do that.  Thank you for the warning.

 4             First, I would like to, of course, emphasize that this bullet

 5     reads to establish and collect new fiscal revenues, new fiscal revenues

 6     that were not in establishment before, and the first document is Document

 7     1D 00635, a decision of the Mostar municipality of June 5th, 1992, on the

 8     war tax for workers from Mostar municipality working abroad and

 9     pensioners whose pensions were earned abroad.  A lot of people from

10     abroad -- a lot of people from Mostar local municipality worked abroad,

11     and in Article 2, it says that:

12             "Workers from Mostar municipality employed abroad must pay 300

13     German marks, Deutschemark, a month to the Mostar municipality HVO as war

14     tax."

15             And then in Article 3:

16             "For the pensioners who earned their pensions abroad, but have a

17     place of residence in Mostar ..." and this money was coming from abroad

18     into the country or it was -- it stayed on the accounts abroad, "... must

19     pay war tax to the Mostar municipality HVO every month."

20             And it defines that, of course, that tax shall be 15 percent of

21     the pension for all pensions up to 800 German marks, and for pensions

22     above 800 German marks it was set at 150 German marks.  Again, a measure

23     by which, of course, this -- this -- this -- new fiscal revenues shall be

24     collected.

25             Then in Article 4, it says where this and how had war tax shall

Page 35237

 1     be paid.  Since there were no banking up and running, the Article 4 says

 2     that:

 3             "These war tax shall be paid into the Mostar municipality HVO

 4     giro account, non-residential account, at the Splitska banka, DD joint

 5     stock company Split, or in cash at the counter of the Mostar municipal

 6     HVO office for finance."

 7             Again, a measure by which new fiscal revenues and, of course,

 8     depositing of that had been undertaken.

 9        Q.   All right.  Now, if we go on to the next document, 1D 02996.

10             JUDGE TRECHSEL:  If I may just add a question to what you have

11     just said.  Do you know by which ways, how foreign payments reached the

12     persons concerned in Mostar?

13             THE WITNESS:  Well, before the war, that has been done through

14     the banking system.  There were, let's say, Yugoslav banks having

15     branches abroad, especially in Germany, and then there was deposits.

16     Now, with this decision, Mostar pensioners could instruct the pension

17     fund of, let's say, a particular either enterprise or German pension

18     funds where this money shall be deposited.  And since they could not --

19     since the banks were not up and running in -- at that very period in

20     Bosnia-Herzegovina, the opening of the non-residential account was the

21     only way to do it.

22             After, and we would see later the first banks were

23     re-established, and the first, you know, foreign transactions were

24     undertaken, then -- you know, then it was paid via the normal

25     international transactions.

Page 35238

 1             JUDGE TRECHSEL:  If I understand you correctly, that means that

 2     these monies were paid on accounts in banks outside of

 3     Bosnia-Herzegovina?

 4             THE WITNESS:  Well, these monies, as says in Article 3 -- 4, they

 5     were paid to a non-residential account of the HVO municipality in a bank

 6     outside, a very normal situation which usually happens if you have within

 7     the country a non-functioning banking system.

 8             JUDGE TRECHSEL:  Thank you.

 9             MR. KARNAVAS:

10        Q.   Okay.  If we go on to the next document, which is 1D 02996.

11        A.   This is a decision by the Prozor municipality on war tax to be

12     paid out the basic personal income, and in Article 2 it says that this

13     war tax is set at 80 percent of the net personal income.

14             Again, a new measure, not --

15             JUDGE TRECHSEL:  Excuse me.  I have heard you say, and I read, 80

16     percent.

17             THE WITNESS:  80 percent.

18             JUDGE TRECHSEL:  80, four-fifths?

19             THE WITNESS:  Yes.

20             JUDGE TRECHSEL:  Thank you.

21             MR. KARNAVAS:  It's right on the document, Your Honour, Article

22     2.

23        Q.   If we go on to the next document, which is --

24             JUDGE ANTONETTI: [Interpretation] One moment.  Witness, you are

25     an expert witness.  This is quite a surprising document because we can

Page 35239

 1     see that taxes levied on somebody who has personal income to the tune of

 2     80 percent.  I fail to understand.  Is the tax rate 80 percent of one's

 3     income, or is the individual to be taxed on 80 percent of what that

 4     individual has earned based on a specific tax rate?  How is this to be

 5     read?

 6             THE WITNESS:  Well, that had to be read as follows:  When

 7     somebody was employed with a company, he received 100 units as net, and

 8     the company paid as a war tax 80 units of a war tax.  So his cost to the

 9     employer was 180.  Employee brought home 180 was paid to the, that case,

10     war budget.  So it's not what we know as a marginal rate of 80.  It's --

11     as it says, Article 1:

12             "All taxes and contributions paid out of the basic personal

13     income shall be transformed into war tax out of the basic personal

14     income."

15             And the way that is done is it is on top of 100 which he

16     receives.  This is the time when there were no personal income taxation.

17     This is the way how employer had been additionally taxed for the net

18     income paid to the employee.

19             JUDGE TRECHSEL:  Can you tell us, Mr. Cvikl, what this meant in

20     practice?  It raises the cost of labour for the employer enormously to

21     almost double.  Would that not then have as a consequence that the salary

22     is somewhat reduced so as to remain within a viable bracket?

23             THE WITNESS:  Well, Your Honour, in old Yugoslav system, that was

24     the way that wages were taxed.  So you have a net, and then on top of the

25     net there was so-called, so-called contributions that could go up to even

Page 35240

 1     80 or above percent of the -- of the net income.

 2             Now, of course, one has to be extremely careful here.  In the old

 3     time, there was a situation where companies were not able to pay the

 4     contributions on a particular net income, but you should also note that

 5     these gross wages or the difference between the net and the gross, these

 6     so-called contributions on the base of the net income were the main

 7     source of the financing, the para-fiscal funds which we were discussing

 8     yesterday.

 9             So since there was a very small sales tax in old Yugoslavia, the

10     really major source of income of the government at large, including the

11     para-fiscal funds, were these contributions.  These were contributions

12     for the pensions; these were contributions for the health sector, for

13     education, et cetera.  So this is a kind of a normal situation.  Today in

14     Slovenia, of course, such a personal income tax is a -- top bracket is

15     42.  But in the time of the hyperinflation, et cetera, for many reasons,

16     including the problem with the value of the money when the money is

17     really collected, could go up to 80 percent.

18             JUDGE TRECHSEL:  Thank you very much.  But what still puzzles me

19     is that you speak of taxes imposed on the workers, but you say the worker

20     received a salary of 100, and he continues to receive 100 except that the

21     employer has to deliver the double or whatever to the state, and it turns

22     out, looks more like an employer's tax than an employee's tax.

23             THE WITNESS:  Yeah, but you have to be extremely careful.

24             JUDGE TRECHSEL:  I am.  I try to be.  That's why I asked you.

25             THE WITNESS:  Before the war, before the war, this was a

Page 35241

 1     contribution which, as we discussed yesterday, employer paid to the

 2     Self-Management Interest Community, to the Social Accounting Office.  At

 3     the start of the war, the Social Accounting Office at the level of the

 4     whole country ceased to exist, ceased to operate.  So employers was not

 5     able to pay any contributions to the, let's say, pension fund of the --

 6     Bosnia-Herzegovina with its account in Sarajevo, but at the same time,

 7     you know, employee, if he worked, he still was receiving net wages.  So

 8     since with the decree which was -- which we discussed yesterday, local

 9     communities were authorised to issue a new type of taxations.  This

10     synthetic tax, this 80 percent war tax was a way how employer continued

11     to pay costs linked with the employer, but the employer had to pay this

12     now to an account of the Prozor municipality because Social Accounting

13     Office did not work out, and they could not transfer money to the -- to,

14     let's say, accounts of the pension fund in Sarajevo.  Even more, I have

15     not seen any opening of the non-residential account of the pension fund

16     of Sarajevo, of the whole Bosnia-Herzegovina, where these monies shall be

17     paid.

18             So there was an absence of a new legislation, I haven't seen it,

19     where they would eventually say, okay, you employers in Prozor and

20     elsewhere, give money that you would otherwise, normal circumstances, if

21     the communication would be up and running, paying to accounts of the

22     pension funds in Sarajevo, pay it somewhere else.  So this was a logical

23     reaction by the Prozor municipality since they have to take care of the

24     people.  They have to take care of the defence.  They were not receiving

25     funds from Sarajevo.  They would -- they replaced these what used to be

Page 35242

 1     payments of the contributions and other -- yeah, contributions from the

 2     -- on the top of the net wages to this -- into this war tax.

 3             JUDGE TRECHSEL:  I'm trying to be careful.  That's why I -- I'm

 4     not yet quite clear.  These 80 percent, if I understand you now

 5     correctly, do not really mean a new additional tax that is to be paid,

 6     but it has the effect that what was due anyway, instead of going to

 7     social funds, now goes to war effort funds?

 8             THE WITNESS:  Yes.

 9             JUDGE TRECHSEL:  Thank you.

10             JUDGE ANTONETTI: [Interpretation] Witness, to be clear because it

11     does seem to me to be rather complicated.  I'll take two situations.  I'm

12     a policeman at the Prozor police station in July 1992.  Let's say that

13     I'm earning 100 Croatian dinars, just 100 for the sake of clarity.  How

14     much will I pay by way of tax on that income?

15             THE WITNESS:  If you are a policeman and your net wage is 100,

16     the police station as your employer would have to pay 80 dinars to the

17     Prozor municipality.  Now, since the police function is a state function,

18     you could have a situation where they were netting this off.  So there

19     were no real transaction because police station could only get money for

20     paying policemans from the Prozor municipality.  But if you are shop

21     assistant in Prozor, and shop assistant makes 100, then of course an

22     owner of the shop assistant who makes money out of selling goods would

23     have to pay to Prozor municipality 80 dinars on top of 100 dinar of the

24     shop assistant's net pay.

25             JUDGE ANTONETTI: [Interpretation] Very well.  That was the --

Page 35243

 1     that was the second situation that I wished to put to you.  You've

 2     answered.  If I am a shop assistant and I earn 100, according to what you

 3     say, the owner of the shop will pay 80; I continue to earn my 100 dinars.

 4             THE WITNESS:  This is exactly.  That time, there were no personal

 5     income taxation, which is a follow-up development, so the shop assistant

 6     would take home -- would take home --

 7             JUDGE ANTONETTI: [Interpretation] Well, that's where there is a

 8     mystery.  How come, whereas we're in a period of war where everyone must

 9     contribute to the war effort those who are not earning, those who have an

10     income, be they policeman or shop assistant, don't personally contribute

11     themselves to the taxes, to war taxes?  Why was that not put in place?

12             THE WITNESS:  For a shop assistant or -- the situation is same

13     before the war and once the war started.  He paid -- he got 100 dinars,

14     and the owner paid 80.  There were some other measures that we have seen

15     that they did not -- they were not increasing the wages, but him working

16     and him continuing paying -- receiving 100 wages, he was to a certain

17     extent contributing to the war effort.  So that's, I mean -- I would not

18     -- I have not seen that now the shop assistant would receive less net

19     wage, less net wage.  He would receive the same 100, but the shop owner

20     would continue to pay 80 - that's how it was defined here - to the Prozor

21     municipality to provide funds for the, you know, things that Prozor had

22     to undertake.

23             JUDGE ANTONETTI: [Interpretation] If I understand, because all

24     this is rather complicated, in fact, the citizen, whether he is a

25     policeman working in a barber shop or an employee for a company, doesn't

Page 35244

 1     himself contribute through the tax to the war effort; it's his employer,

 2     not him.

 3             THE WITNESS:  Well, we have discussed yesterday that most of the

 4     socially owned enterprises practically collapsed, so these were what

 5     really, you know, enable the survival of the population were, you know,

 6     really private traders, private shops.  So whether this shop assistant is

 7     a son of an owner or a brother of an owner or he himself an owner, I

 8     don't know.  I mean, I didn't go into the test, but I did not have a

 9     feeling that there would be, you know, a new personal income tax imposed

10     by which he would receive less of a -- less of a net wage.  I mean, he

11     anyhow had to survive in this difficult circumstances.  And I would even

12     claim that since, you know, for any economic area you need to have people

13     there, taxing them additionally would mean that, you know, they would

14     pack and they would go.  So I don't see from an economic point of view

15     imposing additional person income tax by which shop assistants would take

16     home less would be beneficial.  Most likely, this Bosnian dinars or

17     whatever he was earning, given the fact that there was a limited supply

18     of goods, did not actually buy the same amount of kilos of bread, litres

19     of milk, et cetera, than it was before the war.

20             So everybody was taking, you know, a hit.  In what form, it's

21     difficult to say.  I was not doing the analysis of particular households,

22     you know, looking to what was the so-called disposable income of a

23     particular family.  But I don't see an economic instrument, the one you

24     are suggesting, as a useful measure in wartime circumstances.

25             MR. KARNAVAS:  Thank you.

Page 35245

 1        Q.   If we go on to the next document, 1D 02997.

 2        A.   This is a document by the same Prozor municipality, which is a

 3     decision on a location of funds by the workers employed abroad for the

 4     needs of defence of Prozor municipality.  And here, again, as in some

 5     other, those who are employed abroad in Article 1st and have a permanent

 6     residence in Prozor municipality are obliged to allocate 30 percent of

 7     their monthly net salary for the needs of the defence.  And then in

 8     Article 3 says that those who do not want to allocate mentioned funds are

 9     obliged to return to Prozor municipality immediately.  So this was a way

10     how you requested from those abroad that were not paying any taxes into

11     Prozor municipality, they either report and they are mobilised, or they

12     pay 30 percent of their monthly salaries into Prozor funds.

13             And then what I think is also important here, in Article 4 it

14     says that payments of funds shall be done through Coordination Committee

15     Rama with head office in Munich or in Prozor municipality for the war

16     budget.  Again, attempt by individual local municipalities to collect

17     funds and to even have an office in Munich, this Coordination Community

18     Rama to collect those funds.  Certainly economically unviable measure,

19     but a measure which was adopted out of the needs.

20        Q.   If we go on to the next document, 1D 02995.  1D 02995.

21        A.   This is an early decision of April 7, 1992, passed by the

22     assembly of the Ljubuski municipality on obligatory solidarity allocation

23     for the needs of defence of Ljubuski municipality; and Article 2 is an

24     example of what Your Honour has suggested before, and it says:

25             "All persons employed in public and private companies and shops

Page 35246

 1     are obliged to allocate solidarity funds.  The amount of allocation is

 2     1.000 dinars."

 3             This is a kind of a new tax on top of their net salaries, a

 4     special solidarity fund.  Now, what was 1.000 dinars at that time, I

 5     don't know, but most likely it was not a very big amount, but the

 6     assembly of Ljubuski have identified that, you know, 1.000 dinar is what

 7     people can pay.  Then, of course, it says that those funds shall be done

 8     to the account of funds for joint needs for Defence of Ljubuski

 9     municipality - I'm reading Article 3 - and then the account number is

10     here, when the first salary is being paid, which means that it is active

11     as of now on, and here in principle, employer had been request to pay

12     that for the employees.  Was he for that very reason reducing net pay or

13     he has just higher cost, I can't comment; I can't see that out of this

14     document.  But, again, it is a measure of additional new fiscal revenue

15     to support the defence and to collect money for the social services of

16     the country.

17        Q.   All right.  And if we go on to another municipality now, and

18     let's look at 1D 01771.

19        A.   This is a document of May 2nd, 1992, by Posusje, a decision on

20     obligatory financing of defence.  And here, it says, similar as we have

21     seen before with another -- with - just a second - with Prozor

22     municipality, the Posusje municipality in Roman ii decided that:

23             "For the citizens from the territory of Posusje municipality who

24     are permanently employed abroad, the obligation is introduced to pay

25     monthly the amount of 200 Deutschemark or the value of that amount in

Page 35247

 1     another currency for the needs of financing of national defence of

 2     Posusje municipality."

 3             When I visited Bosnia-Herzegovina in December of 2007, I talked

 4     to people about these type of measures, and the notions that they were

 5     telling to me is that they were, of course, identifying such measures,

 6     and then more or less all of them, you know, tried to impose taxation on

 7     those that worked abroad.  But again, a measure, individual measure, new

 8     tax undertaken by another local municipality, in this case, Posusje

 9     municipality.

10        Q.   And, again, staying with the same municipality, if we could --

11             JUDGE TRECHSEL:  Mr. Karnavas, excuse me if I interrupt.  It

12     seems to me that this is very repetitious.  We have I don't know how many

13     examples.  They all go into the same direction.  They illustrate the

14     point I think quite markedly.  I wonder whether it is really necessary to

15     have such a huge amount of more of the same?  You are not the one that

16     does not complain of lack of time, and I wonder whether this is really

17     the best possible use of it.

18             MR. KARNAVAS:  Well, if I -- Your Honour, if you're making a

19     finding of fact on this particular issue for which I can count on in the

20     final judgement, fine.

21             JUDGE TRECHSEL:  There is no charge on Ljubuski or other

22     municipalities collecting money, so I don't see which point of the

23     indictment alleges that as a crime.  I don't see that.

24             MR. KARNAVAS:  Okay.  I'll spell it out with three simple

25     letters:  JCE.  It goes to the JCE.  This is the whole problem, Your

Page 35248

 1     Honours.  I mean, I did not draft the indictment.  I certainly did not go

 2     ahead and put the imprimatur of the ICTY on it, but I have to live with

 3     it.  And we're trying to show that measures were taken everywhere; the

 4     same measures are going on all over the place.  Why?  Because the

 5     Prosecution is alleging that there is an attempt to Croatise; there's an

 6     attempt to create a state within a state.  Here, we're showing that all

 7     these municipalities are doing the same thing under very difficult

 8     circumstances.  They're taking reasonable and necessary measures.  It

 9     goes against the JCE.  That's all I'm trying to do.

10             JUDGE TRECHSEL:  Of course.  Of course.  I understand that

11     perfectly, and I think you have done a lot of it, and I do not see the

12     added value of added examples because this is all -- as far as I can say,

13     so far it's quite -- this point, I think you have really well made.

14             MR. KARNAVAS:  Very well, Your Honour.  I'll go to the next

15     bullet point, and I'll try to get the other documents in by way of

16     motion.

17             JUDGE ANTONETTI: [Interpretation] Yes, I agree with my fellow

18     Judge.  You have amply demonstrated with all these documents that a high

19     number of municipalities were -- whatever they were, they were doing the

20     same thing.  We can see that.

21             But just by way of curiosity, Witness, we see that all

22     municipalities will tax the workers who are abroad.  Here, for instance,

23     we've seen 200 Deutschemarks.  Now, let's imagine that in a Muslim

24     municipality this text is implemented; but the dweller, the inhabitant

25     living there who is working abroad, he is a Croat.  That means that the

Page 35249

 1     Croat will pay 200 Deutschemarks for the needs of the Muslim

 2     municipality.  Let's do the opposite now.  We are in a Croatian

 3     municipality, that of Mr. Topic, say, and does the same, and he requests

 4     200 Deutschemarks from the Muslims working in Munich.  Did you address -

 5     in my view - not to determine whether there were remittances of monies

 6     coming from other ethnic groups?

 7             THE WITNESS:  Well, we have show yesterday and, I mean, the

 8     documents were -- there were these taxes also imposed in Jablanica and in

 9     Tuzla region.  What I have none not seen in these documents, I have not

10     seen that the -- Posusje, for example, requested that these war tax shall

11     be paid only by the Croats or the other way around.  I have not seen

12     this.  I mean, gastarbeiter is gastarbeiter with a permanent resident in

13     a particular local community, and they were of a different nation, but

14     they were all at that time Yugoslav citizens or Bosnia-Herzegovina

15     citizens.  So I have not seen any of the, quote, "differentiations" by

16     the -- what is a nationality of particular -- everybody was trying to,

17     you know, defend the house he owns in Posusje, and by, you know, paying

18     this into it, if he could not, you know, be mobilised and go into it,

19     that's what he contributed to so that his house he had built with, you

20     know, his savings or in Tuzla for the same sake.  So that's what they

21     were doing.  And yes, they were -- I mean, the local municipality have,

22     you know, invented these taxes both because they were authorised to do it

23     and because there were no other means from the central government to

24     ensure defence.

25             JUDGE TRECHSEL:  Could you tell us more precisely until what time

Page 35250

 1     this system operated?  Throughout until March 1994?

 2             THE WITNESS:  The way I see that is that throughout the

 3     Bosnia-Herzegovina, you have those measures practically up to the point

 4     that there were some other region-wide measures implemented, and from

 5     what I could see later on is that once the -- in the Croatian Community

 6     of Herceg-Bosna, region-wide taxation was imposed, and this slowly had

 7     been, you know, vanishing out.  But in the case of, as we had seen

 8     yesterday, Zenica and Travnik and even Tuzla, because the situation in

 9     Tuzla, from what I understand to discussing then, was much more difficult

10     in 1993, some of these taxes were imposed once in the area of the

11     Croatian Community of Herceg-Bosna were already given up.  So the type of

12     the measure was in place practically throughout the war, but in different

13     areas in different times, and that's why it was so difficult for the

14     executive authority once established to really go with region-wide

15     measures because if a particular municipality was well off because they

16     have a lot of gastarbeiter, they will say, No, this is our money; we

17     don't want to share it.

18             JUDGE TRECHSEL:  Thank you.

19             MR. KARNAVAS:

20        Q.   Okay.  If we could skip the next three documents in your binder,

21     and we'll just go to the next bullet point rather quickly, which deals

22     with -- to allocate fiscal revenues into the budget.  The next document,

23     sir, is 1D 00561.

24        A.   Yes.  This is the document by the Mostar municipality where it

25     says in -- on -- it's the decision of June 5th, 1992, and it's a decision

Page 35251

 1     on the allocation of basic and special sales taxes on goods and services.

 2     And in Article 1, it says that:

 3             "All legal and physical entities and all legal and physical

 4     persons conducting business in Mostar municipality and liable for tax on

 5     sales of goods and services are obliged to calculate and pay the basic

 6     and special taxes to the giro account of the war budget of Mostar

 7     municipality."  Which means that they have not just collect fiscal

 8     revenues, but they were allocating these revenues not for their own needs

 9     but into the war budget.

10        Q.   All right.  If we can look on to the next document, which refers

11     to as a way of an example to your bullet point to collect revenues for

12     particular social services.  The next document is 1D 02990.

13        A.   Yes.  This is a document which tried to -- which, of course,

14     proves what I, you know, put in the bullet, that they organised

15     themselves for -- that they collect funds and -- or later, we'll talk

16     about organisation, to collect revenues for particular social services.

17     Here, what we see is a decision of August 21st, 1992, document 1D 02990,

18     of the Ljubuski municipality where in Article 1 it is defined that the

19     health centre Ljubuski is allowed to introduce participation payment for

20     health services pursuant to proposed lease as follows, and then it says

21     that 100 dinar shall be paid for the general practitioner check-up.  Just

22     for your information, such a measure was imposed in Slovenia only once we

23     you know, undertake the reforms of the health sector in 1994, 1995; but

24     here it's a measure to collect revenues to ensure that the healthcare

25     centre shall continue to operate because the health care centre Ljubuski,

Page 35252

 1     which would have to be financed by the Self-Management Interest Community

 2     for health care from the level of the country of Bosnia-Herzegovina, was

 3     not receiving funds.  People need to go to the general practitioner; they

 4     had to pay.

 5             What I think is important, that in Article 2 there are

 6     exemptions, who is not to pay this participation, which means that the

 7     economic situation of a particular individual is taken into account and,

 8     of course, it says the -- that the army member shall not be being paid,

 9     pregnant woman shall not paid these contributions, pregnant woman,

10     children under 14 age, person with chronic diseases.

11        Q.   All right.  And finally, the last bullet point, there's one

12     example that you wanted to share with us, and that's 1D 00544 --

13             JUDGE ANTONETTI: [Interpretation] Mr. Karnavas.  Witness, on this

14     last document, I have the following question for you:  In terms of a

15     possible discrimination, let me take the theoretical example of an

16     inhabitant of this locality, Ljubuski, has a wife and two children.  That

17     individual is aged 24 years, and as he knows that he belongs to the

18     Republic of Bosnia-Herzegovina, he has decided to enroll in the Army of

19     Bosnia-Herzegovina and he's gone off, I don't know where, perhaps to

20     Sarajevo or to some Territorial Defence unit because he wishes to defend

21     his country, in particular because there's Serbian aggression.  His wife

22     and children still live in Ljubuski.  He's gone off to do his military

23     duty.  If we apply this text in this situation, he will not be exempt

24     because he is not -- doesn't belong to the HVO army.  His neighbour, his

25     neighbour who has joined the HVO is exempt, but he isn't.  Isn't there a

Page 35253

 1     problem there?

 2             THE WITNESS:  No.  I think that he would fall under the last

 3     category:  persons of poor material status.  It is known that the Army of

 4     BiH was not being paid, so he will not have funds.  The same manner, his

 5     wife would, of course, most likely be under that term.  So I don't see

 6     this situation.  So he would -- I mean, there are six lines, HVO army

 7     members, pregnant woman, and then there's the last one, persons of poor

 8     material status.  I also kind of, you know, was trying to see whether

 9     that would be the case, but, you know, given the last line, and he would

10     certainly be of a poor material status because he -- from what I

11     understand and looking to the war budget of Republic of

12     Bosnia-Herzegovina, the wages were not really paid to the army members,

13     and he was not employed; he would be mobilised; he would be of a poor

14     material status.

15             JUDGE ANTONETTI: [Interpretation] But if he owned his house, he

16     would have money because six months prior to that he was earning a good

17     living in Germany and he has returned to Ljubuski and that, in fact, he

18     has a Mercedes parked outside the house, his wife has a television, a

19     fridge, and they have no difficulty whatsoever.

20             THE WITNESS:  Here, I could explain that even today in the, let's

21     say, countries that transited from the former Yugoslavia, we only look

22     into the incomes.  We are not yet able to look into the - what you call

23     it - the assets of a particular individual.  So if he would show that he

24     does not have income, nobody would say, Okay, you have to sell the house

25     or you have to sell the Mercedes parked or the TV, and then, you know,

Page 35254

 1     you show up with this for the doctor.  I mean, this is the situation

 2     which had had been -- one could say economically is not right, but this

 3     is the way the system works even today.  In Slovenia, if you have a, you

 4     know, very low income, you are, of course, authorised to have the

 5     services and pay lower contributions.  We don't look into the assets,

 6     real assets or net wealth of an individual.

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

 8             MR. KARNAVAS:

 9        Q.   It's not like the Registry of the ICTY, Your Honour, when

10     determining the ability of an accused to make contributions.

11             If we go on to the very last document, 1D 00544, which is to

12     organise for particular social services, and there was one example, and

13     we'll finish up with this slide.

14        A.   This is example where on May 21st, 1992, Mostar municipality

15     issued the -- adopted the following conclusion, to proclaim the hospital

16     in Mostar a war hospital.  In that context, it says in Article 2 that all

17     the capacities and activities of the hospital must be put in the service

18     of liberation of the town, which means that they, of course, re-organise

19     their ordinary programme of operation, et cetera, to support the

20     activities of the liberation, which is, again, the way municipalities

21     organise themselves to cover the social services.

22        Q.   All right.  If we could move on now to the next slide, and if we

23     could move at a quicker pace so we could wrap it up as expeditiously as

24     possible.

25        A.   Yes.  What was the result of these independent actions by local

Page 35255

 1     municipalities in the territory of the Croatian Community and also

 2     elsewhere?  Well, clearly, local municipality only took care of their own

 3     economic area.  But they could not -- or they were not interested in

 4     undertaking some of the measures that one would of course like to see

 5     that would help those local communities that were of a lower level of

 6     income generated.  Especially, that became problematic as far as the

 7     infrastructure is concerned.  If a breach was down, and that breach, of

 8     course, was a bridge important for not just one local municipality but

 9     for the other, as well, a particular local municipality in which maybe

10     there was that bridge only took necessary care to make, you know, a path

11     around it; but, of course, they were not concerned about undertaking

12     region-wide repairs, telecommunications, local communities collecting

13     taxes, either in cash, et cetera.  They were not very much interested to

14     support development of the infrastructure, telecommunications, by which

15     their local Social Accounting Offices would start to need paying funds

16     into the wider region budgets.

17             So I'm also mentioning in the report that once in the fall of

18     1992, kids were about to return to schools.  Situation in particular

19     local communities were different.  Some of local communities have

20     sufficient funds to ensure, you know, teachers' pay, books, notebooks,

21     et cetera, for the kids.  Others were not.  If you want to send students

22     back to university, you need to collect funds at the region-wide level to

23     re-open university of Mostar, and that's why for this very reason, in

24     this first period, the Presidency of the HZ had been established as the

25     coordinator between the local community, and the presidency have started

Page 35256

 1     to undertake some of the measures that would -- at the region-wide level,

 2     at the region-wide level to somehow provide good economic environment.

 3     And that's why I say that already in this first phase it was good that

 4     the presidency already adopt some of a decision like a decision on the

 5     public enterprises in the Croatian Community of Herceg-Bosna where it

 6     says which are, and here I would like to refer to document 1D 02018.

 7        Q.   That's correct.  Okay.  Go ahead.

 8        A.   Where in Article 1, it says that interest -- in the interest of

 9     socio-economic developments and the protection of nature and the natural

10     resources of the Croatian people and other peoples in the Croatian

11     Community of Herceg-Bosna, the presidency of the Croatian Community of

12     Herceg-Bosna has adopted a decree establishing public enterprises in the

13     following areas:  First one, A, production, transmission, and

14     distribution of electrical energy.

15        Q.   Slow down.  Slow down.

16             THE INTERPRETER:  Could the witness please slow down when

17     reading.

18             MR. KARNAVAS:

19        Q.   Slow down and enunciate.

20        A.   Im' sorry.  A, production, transmission, and distribution of

21     electrical energy; B, water management activities; C, forestry

22     activities; D, mining activities; E, postal, telephone, and telegraph

23     services, et cetera, all those enterprises that have region-wide

24     importance.  I would like also to refer to Article 3 saying the public

25     enterprise shall be managed by a managing board appointed by the Croatian

Page 35257

 1     defence council of the Croatian Community of Herceg-Bosna, or the -- for

 2     the first time the Croatian Defence Council of the -- the Croatian

 3     Defence Council -- the Croatian Defence Council appearing, and it says

 4     that the presidency of the Croatian Defence Council in Article 4 shall

 5     appoints an acting director for the public enterprises, clearly measure

 6     that was positive and, of course, enable normalisation of the region-wide

 7     -- or the wide region than just one local community.

 8        Q.   All right.  Now, if we could -- I think we are ready to go on to

 9     the next slide, which would be slide 31, and for this we have two

10     documents, and we have approximately 7 minutes before the break.  Perhaps

11     we could finish both the slide and the two documents.  So -- go ahead.

12        A.   In this slide, we are still in the first phase, but already in

13     the first phase it's positive that the presidency adopted decrees

14     regarding reactivation and re-establishment of the Social Accounting

15     Office, and here I would like to refer to Document 1D 0003 [sic]:

16             "Decree on the establishment of public auditing service..." or a

17     proper English translation would be Social Accounting Office, brackets,

18     "... in the event of a state of war or imminent threat of war in the

19     territory of the Croatian Community of Herceg-Bosna."

20             Article 1 establishes this office, and Article 3 gives an

21     authority that a separate decree, which would be subsequently issued by

22     the Croatian Community of Herceg-Bosna, Croatian Defence Council shall

23     prescribe more closely the internal organisation, powers, and tasks of

24     the SDK, Social Accounting Office, of the Croatian Community of

25     Herceg-Bosna, a measure important because if you want to implement the

Page 35258

 1     region-wide measures, you need accounting office.  You needs tax

 2     administration.  You need -- again, re-establishing cashless society, you

 3     need to ensure that there will be there government institution helping

 4     you in recreating economic environment.

 5             MR. KARNAVAS:  To make sure that the record is correct and

 6     accurate, Your Honours, it's 1D 00003, so there's four zeros plus 3.  I

 7     notice earlier it was three zeros.  We have four zeros plus 3.  Now, if

 8     we could go on to the next document.  As I understand, it's 1D 00 --

 9             JUDGE ANTONETTI: [Interpretation] Witness, this Document 00003 is

10     interesting because there's a preamble that sets out the reasons why this

11     decree is adopted, this aggression, the breakdown of the economy,

12     suspension of legal transactions, the use of dinars, et cetera, et

13     cetera.  All is very well explained, and then the decree establishes or

14     re-establishes the SDK, but from your standpoint - because you are a

15     Defence witness, but given your Slovenian origin, you are neutral - if

16     you had to deal with such a decree, would you have automatically

17     mentioned the Croatian Community of Herceg-Bosna, or would you have

18     mentioned the Republic of Bosnia-Herzegovina but given the degradation of

19     the state apparatus at local level it was necessary to establish this?

20     So as a technical practitioner, how would you have drawn up this decree?

21     But you don't have to answer.  If you wish to answer, please do so.

22             THE WITNESS:  I have no problem answering because I'm -- I try to

23     be here as an expert.  This measure should have been undertaken by

24     Republic of Bosnia-Herzegovina.  It had not been undertaken.  The Social

25     Accounting Offices ceased to operate.  Once the territory of Croatian

Page 35259

 1     Republic of Herceg-Bosna -- sorry, the Croatian Community of Herceg-Bosna

 2     has been liberated, an authority had to reconnect those Social Accounting

 3     Offices.

 4             So in the way, the decree is of course written, especially the

 5     introduction where it says that, of course, that obviously other province

 6     in the Serbian Republic, the use of dinars of the federal republic, I

 7     think is the way to do it.  It is to reconnect the economic area of not

 8     just one local community.  If they would hereby establish the SDK for the

 9     whole Republic of Bosnia-Herzegovina, that would be beyond their

10     responsibility, right?  This is the -- I understand issued by the

11     presidency of the Croatian Community of Herceg-Bosna, which is a group of

12     local community.  Perfectly, perfectly, given the presidency decree here,

13     it would be -- says legally perfectly would be, while the district of

14     Mostar as entitled to do that by the presidency decree of the Republic of

15     Bosnia-Herzegovina on counties hereby issues and establishes Social

16     Accounting Office of the district of Mostar.  But I don't know whether

17     they knew that at that time.

18             But it is a logical reaction to go and create Social Accounting

19     Office and even more, in the next document, 1D 00013, to establish

20     customs administration on the territory.  Why is this even more important

21     document?  Because with the establishment of customs administration, they

22     establish a border between Republic of Croatia, and what used to be

23     administrative border of Bosnia-Herzegovina, which now becomes, of

24     course, a border of Republic of Bosnia-Herzegovina where the control

25     checkpoints of the customs administration that has been established was

Page 35260

 1     up and running, all in order to normalise economic activity in the area

 2     of not just one local community, but many local communities.

 3             JUDGE ANTONETTI: [Interpretation] Well, you've just said two

 4     important things in your answer, and as part of the cross-examination,

 5     the Prosecutor might return to these points, but it must be on record.

 6     You have just said that Mate Boban, who signed this document, was in fact

 7     acting as the head of a group of local communities.  That's the first

 8     thing you said; and then, but this has been also mentioned with other

 9     witnesses, you have just said that the customs system that was set in

10     place was tantamount to creating a border between the Republic of Croatia

11     and Herzegovina, that is, the Republic of Bosnia-Herzegovina.  These are

12     two essential points.  Are these the points that you highlight in your

13     answer?

14             THE WITNESS:  Both decrees are decrees on establishment of public

15     auditing service and the customs administration in the event of a state

16     of war or imminent threat of war on the territory of the Croatian

17     Community of Herceg-Bosna.  I see this as a temporary measures, but they

18     were the temporary measures undertaken in order to ensure economic-wide

19     efficiency or region-wide efficiency.  I never met Mate Boban.  When I

20     was reading these documents, these are very similar documents that one

21     would undertake if you have or if you want, instead of connect and have a

22     control over one local community, have economic control over bigger group

23     of local communities.  I have said earlier, Your Honours, reading the

24     presidency of Republic of Bosnia-Herzegovina decree on districts - we

25     will get to it - maybe it would be appropriate to put in the preamble,

Page 35261

 1     also, this decree, but then of course that decree puts local communities

 2     together in a different manner than it was done by the Croatian Community

 3     of Herceg-Bosna and that the way the Croatian Community of Herceg-Bosna

 4     local community were put together was really depending on what was the,

 5     you know -- what were the military activities took place.

 6             I would claim that once the customs administration was put in

 7     place, was put in place in order to prevent economic taking-over by

 8     Republic of Croatia, the territory of the local communities north of

 9     administrative border what was in the Republic of Bosnia-Herzegovina

10     because that's what they did.  They established the customs, checking

11     points so that they knew what is coming in and what is going out.  If

12     they were not acted, this would be economically very soon part of

13     Dalmatia.  Economically.  This is what I'm saying.  This is -- the

14     analysis which I make is that these are logical economic measures one

15     does in order to reconnect local communities.

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

17     and I are looking at the clock.  Did you have another document before

18     finishing with this point, or can we have the break now?

19             MR. KARNAVAS:  I think we can have our break now, Your Honour.

20             MR. STRINGER:  Excuse me, Mr. President.  Sorry for --

21             JUDGE ANTONETTI:  Yes, Mr. Stringer.

22             MR. STRINGER:  It would assist us in organising ourselves during

23     the break to know how much time other Defence teams are planning for

24     cross-examination.

25             JUDGE ANTONETTI: [Interpretation] Indeed.  For the time being,

Page 35262

 1     Mr. Karnavas has used 3 hours, so in theory, he has another one hour.

 2     Maybe he won't need it.  Based on the decision by the Trial Chamber, the

 3     other Defence teams will have two hours.  I don't know how they split it

 4     up.  Ms. Nozica, we haven't heard you in a long time.  It was last year,

 5     indeed.

 6             MS. NOZICA: [Interpretation] Good afternoon.  Yes, and I'd like

 7     to take this opportunity to wish everybody in the courtroom a happy new

 8     year because this is the first time I've taken the floor.  I remember

 9     what Judge Antonetti said, that this will be the best year for us, and

10     before I begin my Defence case, I wish to believe that, and I wish to

11     tell you straightaway that the Defence of Mr. Stojic has no questions for

12     this witness.  Thank you.

13             JUDGE ANTONETTI: [Interpretation] Very well.  What about you, for

14     Mr. Praljak?

15             MR. KOVACIC: [Interpretation] I would like to consult with my

16     client.  There might be some, but we will be certain after this break.

17     Mr. Praljak shall give me that he have some.  I still don't know what

18     exactly.

19             JUDGE ANTONETTI: [Interpretation] Very well.  Ms. Alaburic.

20             MS. ALABURIC: [Interpretation] Your Honour, on behalf of the

21     Petkovic Defence, greetings to you all, and a happy new year to you.  The

22     Defence of General Petkovic has no questions for this witness because I

23     think the witness was very clear and clear in his explanations and put

24     all the relevant facts before us.

25             JUDGE ANTONETTI: [Interpretation] And for Mr. Coric.

Page 35263

 1             MS. TOMASEGOVIC-TOMIC: [Interpretation] Good afternoon, Your

 2     Honours.  Good afternoon to everybody in the courtroom.  On behalf of the

 3     Coric Defence, I would also like to wish everybody a happy new year.  The

 4     Defence of Valentin Coric has no questions for this witness either.

 5     Thank you.

 6             JUDGE ANTONETTI: [Interpretation] Mr. Ibrisimovic.

 7             MR. IBRISIMOVIC:  Mr. President, we didn't ask for any time for

 8     the cross-examination; and therefore, we have no questions.  Thank you.

 9             JUDGE ANTONETTI: [Interpretation] It may be that Mr. Praljak and

10     his counsel need some time, but they will see.  So this is the situation

11     now.  Let's have a break, a 20-minute break.

12                           --- Recess taken at 3.51 p.m.

13                           --- On resuming at 4.17 p.m.

14             JUDGE ANTONETTI: [Interpretation] In terms of time, we are not

15     really under pressure, under any time constraint, because the other

16     Defence teams told us what they plan to do.  I don't know what the

17     Praljak Defence intend to do.  They may say this straightaway.

18     Mr. Kovacic.

19             MR. KOVACIC: [Interpretation] Yes.  Thank you, Your Honour.  I

20     can tell you straightaway.  We consulted and Mr. Praljak would like to

21     ask the witness a few questions himself in view of the fact that he lived

22     in the area at the time, and so he can throw light on certain interesting

23     elements, particularly those having to do with the pre-war situation and

24     the things that the witness himself talked about.

25             JUDGE ANTONETTI: [Interpretation] Mr. Kovacic, the fact that he

Page 35264

 1     lived there does not endow him with any particular expertise, as per the

 2     Trial Chamber's decision and confirmed by the Appeals Chamber.  He needs

 3     to have some technical know-how.  I don't think that -- I mean, I don't

 4     think that he has that many degrees.  Among his many degrees, I don't

 5     think he has a degree in economics.  I don't think that's the case.  And

 6     with regard to taxation and everything the witness told us, I fail to see

 7     at all what would justify us sort of doing something else than what we

 8     decided before.

 9             MR. KOVACIC: [Interpretation] Your Honours, Mr. Praljak has no

10     specific knowledge about taxation or the monetary system or things like

11     that.  However, Mr. Praljak at the very least has the general education

12     of an average citizen, and I think that is in keeping with the decision

13     that you mentioned where the Appeals Chamber stated that at the very

14     least where he has a special qualifications, then he can be allowed to do

15     so; and as a citizen, he does have those qualifications as somebody who

16     took part himself in the daily life of Croatia and later on

17     Bosnia-Herzegovina, and that is why he does know about these problems and

18     the kinds of problems that occurred and which the witness discussed here

19     in one way or another.

20             So the intention to highlight facts that happened at the time and

21     in that area as an educated citizen who did indeed take an active part in

22     economic affairs and events, he could see this and understand them as

23     relevant events, and these are certainly the same events that the witness

24     as an expert witness highlighted, too, so whether they had a direct link

25     or an indirect link to the collapse of the country and the further

Page 35265

 1     economic development of the area.

 2             JUDGE ANTONETTI: [Interpretation] I'm going to discuss this with

 3     my fellow judges.

 4                           [Trial Chamber confers]

 5             JUDGE ANTONETTI: [Interpretation] As you noticed, we discussed

 6     the matter, and the Trial Chamber recalls that there was a decision, a

 7     very clear decision by the Appeals Chamber.  To intervene, you must have

 8     some specific qualification.  The Trial Chamber has always granted

 9     military qualifications or, in terms of electricity or gas or water, of

10     public utilities to Mr. Praljak.  But in economic matters, he doesn't

11     seem to have any specific qualifications.  If the Trial Chamber were to

12     grant this, well, there would be no limit anymore.  Mr. Praljak or

13     somebody else could then speak to anything.  So this is the position of

14     the Appeals Chamber and also the majority position of the Trial Chamber.

15     I'm the spokesperson for the Trial Chamber.  Personally, you know what I

16     feel.  I don't have to say it again.  So, Mr. Praljak, you are not

17     allowed to ask questions.  Yes, Mr. Kovacic.

18             MR. KOVACIC: [Interpretation] Your Honours, with all due respect

19     to the ruling since it was a majority ruling, I will respect it, but I

20     have to say for the record, and if necessary we can come back to the

21     matter tomorrow, the Appeals Chamber decision was not correctly

22     interpreted.  I haven't got it with me just now, but the decision was

23     that the accused does have the right to examine, and then it said in

24     particular when, and then after that the specificities were mentioned.

25     So it said "in particular."  He has the right to examine and in

Page 35266

 1     particular, et cetera, et cetera, when specific knowledge, circumstances,

 2     and so forth exist.

 3             So with your indulgence, think about your decision, and perhaps

 4     we can carry on with this discussion tomorrow.

 5             JUDGE ANTONETTI: [Interpretation] Mr. Kovacic, if what you say

 6     about the Appeals Chamber decision is right, and I would be surprised,

 7     you are saying that Praljak is entitled to cross-examine, examine, and in

 8     particular in relation to this specific -- it would have a general right

 9     to cross-examine.  That's not my reading of the Appeals Chamber decision.

10     But we're going to have a new look at it.  We're going to examine it

11     again.  But your interpretation I think goes way beyond what the majority

12     of judges in this Trial Chamber said and was confirmed by the Appeals

13     Chamber.

14             MR. KOVACIC: [Interpretation] I apologise.  Perhaps the

15     interpretation wasn't correct or perhaps I didn't speak precisely enough.

16     In your first decision before the appeal, the words "in particular" were

17     used in the paragraph which explains the circumstances under which the

18     accused Mr. Praljak would be allowed to cross-examine.  So that's what

19     you said, whereas the Appeals Chamber just pointed that out, indicated

20     that, and I remember the sentence full well because I read it word by

21     word, line by line, the decision of the Appeals Chamber and the ruling of

22     this Chamber too.  And I'm quite certain that after the decision made by

23     the Appeals Chamber, the situation was cleared up.  So your request, the

24     request of this Tribunal -- this Chamber stands that he must have some

25     specific knowledge, in particular when such and such is concerned.  So

Page 35267

 1     this does not exclude other areas of knowledge.  It doesn't call for

 2     specific knowledge that you said -- of the type you said military

 3     criteria and so on and so forth.  It requires certain knowledge of the

 4     facts.  Now, Praljak was there.  That's a fact.  He's an educated man.

 5     That's a fact.  You've already heard that.  He did have the power and

 6     capability of grasping certain developments in society including economic

 7     developments, and he was a subject of those developments as a citizen and

 8     partially as a businessman, so I do feel that he can ask relevant

 9     questions and that that is in keeping with the decision that you are

10     referring to.

11             And ultimately, you do have the instruments in your hands, and I

12     don't think it would be proper to ban questions before they are posed.

13     Any one of us, even well-trained Defence counsel or counsel in general,

14     can put a bad question, by school definitions.  It can be repetitive,

15     leading, or whatever.  You are there to correct that as the Chamber, and

16     you did do so along the way.  So I don't think it's fair to prohibit a

17     question before it is posed.  I've tried to be brief.  I have just

18     intimated the kinds of topics that he wishes to raise.  If you would

19     like, he will be happy to tell you of the basic areas that he wishes to

20     discuss and cross-examine on, and he can explain why he wants to ask

21     those questions.  So that is just my comment.  Your ruling stands.  I can

22     do nothing against that, but I wanted to comment on it.

23             JUDGE ANTONETTI: [Interpretation] All right.  The Trial Chamber

24     has decided to stop this discussion, not to give the floor to

25     Mr. Praljak, but to ask Mr. Karnavas to proceed and continue.  Let me

Page 35268

 1     just observe this, Mr. Kovacic.  Mr. Praljak could easily have given you

 2     the questions he intended to ask during the break and you yourself could

 3     have asked the questions if indeed these were very essential questions

 4     for your Defence.  That's all.  That's what should have been done.  He

 5     should have scribbled the questions on a piece of paper to say, You have

 6     to ask about this and this document, and you as a counsel, you could have

 7     said, Well, witness, as requested by Mr. Praljak, I'm asking you the

 8     following questions, and the matter would have been settled.

 9             MR. KOVACIC: [Interpretation] Thank you for that possible

10     solution, Your Honour.  I would just like to mention that Mr. Praljak

11     yesterday, after this witness began his testimony or, rather, this

12     morning, he read some literature and some material on the subject to

13     remind himself of the substance of what he thought was relevant, and it

14     will be rather difficult, but I think that we will be able to do some of

15     that in the way in which you have suggested.  Thank you.

16             JUDGE ANTONETTI: [Interpretation] One moment, Mr. Praljak.  I

17     know you want to address the Judges and the Judges, my colleagues, don't

18     want you to.  What can I say?  I am forced to comply with a majority

19     decision of this Trial Chamber.  That's all there is to it.  I have told

20     you that through or by writing down something, you could have asked your

21     lawyer to put questions as part of the cross-examination on specific

22     points for specific reasons because last night I noticed this and that

23     and this document was interesting.  And as your voice in this courtroom,

24     the counsel could have said, Well, as requested by my client, I'm asking

25     you, Witness, this or that question, or the counsel could also have said

Page 35269

 1     exactly what you wanted to ask.  He could have read your questions and we

 2     would have avoided the problem.  But my colleagues don't want you to take

 3     the floor.  I can't go against a majority decision.  So, alas, you have

 4     to sit down.

 5             Mr. Karnavas, please proceed.

 6             THE ACCUSED PRALJAK:  Does that mean that I'm not able to address

 7     the Court?

 8             JUDGE ANTONETTI: [Interpretation] Well, if you want to address

 9     the Court on another topic, I'm going to ask my fellow judges.  But as to

10     this particular item, that has been settled.

11                           [Trial Chamber confers]

12             JUDGE ANTONETTI: [Interpretation] Well, the Judges are telling

13     you and that the accused has to express himself through his counsel.  If

14     you want to say that the detention conditions are unbearable, that you

15     can say through your counsel.  But personally, you are not allowed to

16     speak.  That's what my colleagues are telling you.  But you are going to

17     testify in a few weeks, in a few months' time, so keep your energy until

18     then, until the testimony of which will be very relevant for you.  If you

19     deem that there are topics that you are not allowed to address now, you

20     can deal with them when you testify, and then you will convey what is the

21     truth for you.

22             Please, Mr. Karnavas, with regard to time, you have one hour

23     left.  Based on our calculations, you had 95 hours, but the hour has been

24     used, so possibly you might have 12 minutes for redirect.  I wanted to

25     tell you that.  I have to be the gamekeeper.  You know, we have to look

Page 35270

 1     into the situation, but let me tell you that once you have used up this

 2     hour, you will only have 12 minutes left because you will by then have

 3     exhausted your 95 hours.

 4             MR. KARNAVAS:  I understand that, Mr. President.  Thank you for

 5     reminding us on that.  For some reason, the time got lost.  In any event,

 6     if I may be of some assistance regarding this particular issue between

 7     now and the time I finish, perhaps Mr. Praljak could write out the

 8     questions, and I'm sure that we'll take a break after I conclude, and

 9     during that break he can consult with his attorney because I'm sure that

10     the Prosecution would like, perhaps, a break to set up before beginning

11     the cross-examination, so an offer of proof on the record can be made.

12     Now --

13             JUDGE ANTONETTI: [Interpretation] Yes, I think it would be best

14     for you to finish with the examination-in-chief and then we'll have a

15     break.  Mr. Praljak can possibly talk with his attorney, pass some

16     questions to him.  That seems to be a very sensible idea.  Please

17     continue.

18             MR. KARNAVAS:  Thank you.

19        Q.   Now, prior to the break, Mr. Cvikl, there was a question that

20     came from the Bench based on one of the documents that we saw concerning

21     the customs administration, and I thought that I would show you one

22     particular document which is cited in your report on footnote 816.  This

23     is 1D 03004.

24             MR. KARNAVAS:  Mr. Usher, if I could get your attention.

25        Q.   We will provide you with the document.  It is cited in your

Page 35271

 1     report, footnote 816, and we have provided copies to everyone.  This is

 2     just one additional document in addition to the ones that are -- have

 3     already been provided, and this is a decision on border-crossing with the

 4     Republic of Croatia, and I wanted to bring this to everyone's attention

 5     in light of the questions posed.

 6             If you could look at Article 2.  And if you could -- do you

 7     recognise, first of all, those border crossings, more or less?

 8        A.   Yeah.  I recognise them as the border crossings on the what used

 9     to be administrative borders of Republic of Bosnia-Herzegovina before

10     the -- before its independence and at that time socialist Republic of

11     Croatia, so these are the, as far as I know, borders on the southern side

12     of the Republic of Bosnia-Herzegovina.

13        Q.   And by looking at these border crossings, based on this decision,

14     can you tell us with any degree of certainty whether these border

15     crossings surround the area that was known back then as Herceg-Bosna, you

16     know, the Croatian Community of Herceg-Bosna?

17        A.   I don't have a map here, but if I'm not -- if I'm correct, these

18     are the borders on the -- what I believe is the southern part of the

19     Croatian Community of Herceg-Bosna.

20        Q.   So in other words, it's between the --

21             THE INTERPRETER:  Would the speakers kindly not overlap for the

22     interpreters.  Thank you.

23             MR. KARNAVAS:

24        Q.   Yes.  So in other words, it's between the Republic of Croatia and

25     the Republic of Bosnia-Herzegovina?

Page 35272

 1        A.   Yes.

 2        Q.   All right.  Thank you.  Now, if we can go back to your

 3     presentation now, and I believe we were about to start with slide 32, if

 4     I am not mistaken.  If you could briefly look at the slide and give us a

 5     small commentary -- or short commentary, I should say.

 6             JUDGE ANTONETTI: [Interpretation] Witness, before we move on to

 7     slide 32, you said something earlier on that I found interesting and I

 8     mulled over during the break.  Speaking about border or customs crossings

 9     and customs tax, you said that some kind of a border had then, thus, been

10     created between the Croatia and Bosnia-Herzegovina, and then you

11     mentioned Dalmatia.  I personally do not know Dalmatia.  I do not know

12     the beaches in Croatia, so I am really unaware of this topic.  But I

13     understood that with relation to Dalmatia, Croatia had the same sort of

14     issues because of customs duties or the absence thereof, there seems to

15     have been an absorption of Dalmatia into Croatia.  Could you shed some

16     light?  It might be interesting, and since you offered this information,

17     I suppose that you must have some reason for saying that.  Could you

18     expand on this?

19             THE WITNESS:  Yes, Your Honours.  Before I expand, let me just

20     say one more important element with slide 31, and it has to do with

21     basically both activation and re-establishment of the Social Accounting

22     Office and of the customs office.  I want to say this because I also read

23     over the break again this preamble, not just of the Social Accounting

24     Office recreation, preamble of the Document 1D 00003, but also the

25     preamble of the Document 1D 0013 [sic], and the preamble of the document

Page 35273

 1     establishing the companies of customs administration in the territory of

 2     the Croatian Community of Herceg-Bosna says starting from the fact that

 3     the Republic of Bosnia-Herzegovina has delegated the --

 4             THE INTERPRETER:  Witness is kindly asked to slow down, please.

 5             THE WITNESS:  Has delegated the federal institution with its

 6     declaration of independence, and the fact that due to the state of war,

 7     it has not established a customs service in the territory of the Croatian

 8     Community of Herceg-Bosna, and with the aim of protecting legal entities

 9     and natural persons in foreign transactions, the Croatian Community of

10     Herceg-Bosna, pursuant to Article 8 and et cetera, issues the following

11     -- issues the following decree:  A document signed by then -- or the

12     president of the HVO Croatian Defence Council, Dr. Jadranko Prlic.

13             Why I mentioned earlier in my testimony the issue of Dalmatia,

14     because Dalmatia is, you know, the southern part of Croatia, and I have

15     said economically if there would be no borders, no customs, border

16     crossing established as defined in the document 1D 03004, economically

17     then Split as the biggest capital of Dalmatia would have economic

18     influence also all the way to the Croatian Community of Herceg-Bosna, and

19     that's why I said that creation of borders and creations of the border

20     crossings undertaken in the absence of activity by Republic of

21     Bosnia-Herzegovina as defined in the preamble of the Document 1D 0013 has

22     actually prevented that economically Croatian Community of Herceg-Bosna

23     would be integrated into area of Dalmatia, and with that, into the whole

24     Republic of Croatia.  Because no borders would mean that economically the

25     Croatian Community of Herceg-Bosna would be dealing with, of course,

Page 35274

 1     enterprises in the area of Dalmatia, which is, we all know, Republic of

 2     Croatia.

 3             And that's why I have said that authorities in the Croatian

 4     Community of Herceg-Bosna were in a difficult situation.  Why?  Local

 5     communities have undertaken measures, they could simply sit back and let

 6     Republic of Croatia enterprises and economic power which was at that time

 7     in area of Dalmatia, in Split, took over economically and economically

 8     integrate Croatian Community of Herceg-Bosna local communities into, I

 9     said, of course, region of Dalmatia, but legally speaking, this is

10     Republic of Croatia.

11             And measures of creating Social Accounting Office and measures of

12     the decision on border crossing and decision on establishment of the

13     customs office during an imminent threat of war or a state of war and as

14     said in the preamble because Republic of Bosnia-Herzegovina has not

15     undertaken its measure were measured against integrating Croatian

16     Community of Herceg-Bosna, economically speaking, into Republic of

17     Croatia.

18             I will give you another example from Slovenia.  If you were not

19     establish upon independence our border crossings on our southern border

20     with Republic of Croatia, Istra, which is the most western part of --

21     peninsula of Croatia, would economically integrate western part of

22     Slovenia into its own economic territory.  So establishing of the border

23     crossing in order to, as said, protect legal entities and national

24     persons in foreign transactions is an activity which is economically

25     appropriate activity if you want to connect local communities and for

Page 35275

 1     those local communities to remain within Bosnia-Herzegovina.

 2             MR. KARNAVAS:

 3        Q.   Let me ask a couple of questions based on your answer, and,

 4     again, you were referring to, just to be precise, 1D 00013.

 5             From your own experience, when Slovenia became independent, did

 6     it establish a border crossing between Slovenia and Croatia, and did it

 7     do so by way of implementing some sort of legislation?

 8        A.   Yes.  We implemented this by the legislation.  We have said that,

 9     of course, the federal legislation is not any more valued on the

10     territory of Republic of Slovenia, and we imposed customs points,

11     cross-checks on the very border, and also at the airport of Brnik which

12     is, of course, international crossing checkpoints when you fly in

13     Slovenia.  And for that very reason, we were immediately attacked by the

14     Yugoslav Army.

15        Q.   That was my next question.  How long did you wait, weeks, months,

16     years, to set up a border crossing?

17        A.   Well, the Declaration of Slovenia was announced in the parliament

18     of Slovenia on the 25th of June.  At midnight of that day, we established

19     and we renamed Yugoslav customs officers into the Slovene customs

20     officers, and we placed the Yugoslav flag and the title of the Socialist

21     Federal Republic of Yugoslavia with the title -- with the signs Republic

22     of Slovenia, customs point, and Republic of Slovenia border immediately.

23        Q.   Okay.  And now through your involvement in this particular case,

24     having also travelled in Bosnia-Herzegovina, did you come across any

25     legislation signed by the president of the presidency Alija Izetbegovic

Page 35276

 1     at the time when Bosnia-Herzegovina was declared independent whereby he

 2     established border crossings in a customs administration?

 3        A.   No, I have not.  I have seen only delegation of the federal law,

 4     but I haven't seen establishment of the customs administration of

 5     Republic of Bosnia-Herzegovina, and I have not seen establishment of the

 6     customs crossing points by Republic of Bosnia-Herzegovina I believe not

 7     all the way up to 1995.

 8        Q.   Recognizing that you are here as an expert on economics, however,

 9     you've told us your background, and you've told us that you were involved

10     during that transitional phase when Slovenia declared itself independent,

11     based on the questions that were asked by the Trial Chamber, can you

12     answer this particular question:  Is that a particular activity that

13     should have been carried out by the president of the presidency or the

14     presidency of Bosnia-Herzegovina the moment Bosnia-Herzegovina declared

15     itself to be independent?

16        A.   Yes, it should be.  That's what I have said.  It was

17     international-recognised state but did not take measures to become an

18     effective state.  It did not establish custom points at their external

19     borders, at their former administrative borders of the Socialist Republic

20     of Bosnia-Herzegovina.

21        Q.   And one last question.  Looking back at 1D 00013 where you

22     mentioned that this document was signed by the president of the HVO, the

23     Croatian Defence Council, of HZ HB, Dr. Jadranko Prlic, if we look at --

24     above the signature, do you see where it says Republic of

25     Bosnia-Herzegovina?

Page 35277

 1        A.   Yes, I see it.

 2        Q.   Go ahead.

 3        A.   I see it then says, starting from the fact that the Republic of

 4     Bosnia-Herzegovina has derogated the Federal institutions with the

 5     declaration of independence and the fact that due to the state of war it

 6     has not established a custom service.

 7        Q.   Yes, but I want you to go back -- I want you to go to the last

 8     page, right above where we see Dr. Jadranko Prlic, and before we see the

 9     Croatian Community of Herceg-Bosna Croatian Defence Council, what do we

10     see?

11        A.   Well, we see the whole title of the area, Republic of

12     Bosnia-Herzegovina, Croatian Community of Herceg-Bosna, Croatian Defence

13     Council.

14        Q.   All right.  And you being from the region, in reading that, would

15     you draw any conclusions as to whether the Croatian Community of

16     Herceg-Bosna is outside the Republic of Bosnia-Herzegovina or within and

17     subordinated to?

18             MR. STRINGER:  Objection, Mr. President.  This question is beyond

19     the scope of the witness's expertise.

20             MR. KARNAVAS:  Your Honour, it's an invited response -- given

21     that the Trial Chamber, which is entitled to ask questions even beyond

22     the scope of direct examination and has indeed asked questions beyond the

23     scope of direct examination, this is an invited question based on what

24     came from the Bench; and therefore, having, again, if I may recall

25     yesterday, there were -- and today there were questions concerning the

Page 35278

 1     gentleman giving opinions of a political nature, albeit he is here as an

 2     economist, I think this is well within.

 3             JUDGE ANTONETTI: [Interpretation] This expert witness is an

 4     economist, but he's had a political function.  He was a minister in his

 5     country for European affairs, so I suppose that he has some extended

 6     knowledge of quite a few points including political matters.

 7             Witness, can you answer or not?  It's up to you.

 8             THE WITNESS:  Yes, I can answer.

 9             JUDGE ANTONETTI: [Interpretation] You can.  Very well.

10             THE WITNESS:  And my answer is as follows:  Clearly, the

11     legislation the way it was set both as interim legislation and, clearly,

12     the way it was presented today me, it's a legislation that confirms to me

13     that the Croatian Community of Herceg-Bosna was always within Republic of

14     Bosnia-Herzegovina.

15             MR. KARNAVAS:

16        Q.   If we can now turn our attention to slide 32, and if you could

17     briefly comment on this slide, and as I understand it you wanted to draw

18     our attention to a particular document, but first, if we could have a

19     brief explanation.

20        A.   Slide 32 explains what was the -- what is phase 2 of the economic

21     developments.  If in the first phase local communities provided logistic

22     support, in the second phase of economic developments, in this area with

23     -- known as Croatian Community of Herceg-Bosna, the Croatian Defence

24     Council has been established, and I understand it as a temporary

25     executive body.  And in that context, now authorities, not just local

Page 35279

 1     communities, authorities, but also the regional authorities started to

 2     act; otherwise, hundreds of people, hundreds of thousands of citizens

 3     would simply leave Republic of Bosnia-Herzegovina.  Why I'm saying this,

 4     they would not leave from the local communities where there was good --

 5     where there was good economic situation, but they would leave -- they

 6     would depart from those local communities of that Croatian Community of

 7     Herceg-Bosna where the situation was not that good.  And in that context,

 8     the task of the Croatian Defence Council, the Croatian Community of

 9     Herceg-Bosna, was to establish common regional-based financial and fiscal

10     system, simply note to undertake measures at the level of the Croatian

11     Community that would strengthen the economic area of those local

12     communities.

13        Q.   All right.  Now, if we could look at P 00128, and perhaps you

14     wanted to comment or draw our attention to a particular portion of this

15     document.

16        A.   Yes.  I would like to point in this Document P 00128, English

17     translation first, to page --

18             JUDGE PRANDLER:  I'm sorry to interrupt you, but really, you

19     always overstep the limits of the translation in a way that -- I'm sorry

20     to ask both of you to stop because, for example, now, the question which

21     was raised by Mr. Karnavas originally, the answer of our expert Mr. Cvikl

22     was also added there.  Now, they have corrected this question and answer.

23     But, again, there are difficulties for the interpreters.  Let me ask you

24     to accept whatever they have asked you to do.  Thank you.

25             MR. KARNAVAS:  Thank you, Judge Prandler.

Page 35280

 1        Q.   Mr. Cvikl, we do need to pause because we're both speaking the

 2     same language, so go ahead.

 3             THE WITNESS:  Yes.  I would like to point to the page 34 of

 4     Document P 00128.  And in the last paragraph before section F, there is a

 5     statement, and this is the economic report of that Croatian Defence

 6     Council.  And the statement read:  It should be stressed that with the

 7     establishment of a Chamber of commerce, Croatia Osiguranje, insurance

 8     company and Hrvatska banka, commercial bank, conditions have been created

 9     for reviving the economy on the territory of the community.  And this is

10     a proof of that they have worked on establishment of banking

11     institutions.  Second, they have not just been dealing with economic or

12     banking sector; they were also dealing with social services.  And on the

13     same page, 34 of that same document, there is a statement, the last --

14     the second -- one of the last sentences in the paragraph on the bottom:

15             "Some schools began classes on 7th of September and others

16     depending on conditions.  It was the same with schools in central Bosnia.

17     We have no information about schools in the temporarily occupied areas."

18             From here -- from that, I understood that authorities, region

19     authorities, have taken care of ensuring that at beginning of the school

20     year, which in the countries of the Balkans were always September 1st,

21     school started classes.

22             I would like also to raise your attention to the page 35, the

23     second paragraph, at the bottom of that second paragraph, the last

24     sentence read:

25             "Efforts are being made in cooperation with municipal HVOs to

Page 35281

 1     repair schools and ensure working conditions."

 2             And last point.  On page 32 of that document, they point to the

 3     problems, but the last sentence on the page 32, the first paragraph on

 4     the top read:

 5             "Nevertheless, a total revenue of each year 1.188 million was

 6     generated until 31st December, 1992, which has primarily been used as has

 7     been said for Defence purposes but also on reconstruction and the work of

 8     other institutions on the territory of the community."

 9             All these were for me proofs that in phase 2, the temporary

10     executive authority of the HVO were making attempts to utilize government

11     tools of collecting revenues to undertake government expenditures but

12     expenditures that go across the whole territory, and especially what was

13     important there, of course, to start the school year.

14        Q.   Mr. Cvikl, we talked yesterday and to some extent today about the

15     need for having banks because the SDK wasn't working, but here on page

16     34, it mentions insurance -- the establishment of an insurance company.

17     Why is that necessary, for those of us who are not from the region and

18     may not appreciate the need for an insurance company.

19        A.   Well, from my understanding, the reason why you need to have

20     Croatia Osiguranje, insurance company, established on the territory is to

21     undertake an insurance agreement with other countries' insurance

22     organisations so that cars with plates from Bosnia-Herzegovina could get

23     an insurance green card, international transactions, so when they came to

24     the crossing points between Bosnia-Herzegovina and the Republic of

25     Croatia, the car were allowed to be driven into Republic of Croatia,

Page 35282

 1     Republic of Slovenia, where they went to collect goods that were to be

 2     imported in that territory.  Without having insurance, you can't provide

 3     logistics for the supply of goods and services in that territory.

 4        Q.   Thank you.  I believe we can move on to slide 33.

 5        A.   On slide 33, I continue with defining what of course were

 6     activity undertaken.  We already talk about customs authority, tax

 7     administration.  And then, of course, I say that there was quite

 8     difficult for the authorities to undertake because the challenge was to

 9     establish a sound financial and fiscal system.  I have said in one of the

10     earlier slides, they could opt that they would simply print the money,

11     but that would mean that they would have a hyperinflation generated by

12     themselves.  Now, they have decided to raise taxes, to raise taxes to

13     undertake revenue generation from the collection of taxes, not borrowing,

14     from, you know, anyone.  And furthermore, with the fiscal revenues

15     generated, they covered government expenditures that the population need.

16             And I'm also mentioning that why it was so important for the

17     temporary executive authority of the HVO to undertake that is because

18     there was a difference between local communities.  If all local

19     communities would be equally well off, then there would be no need

20     eventually for the Croatian Defence Council to be active.  But there were

21     some of them that were not well off, and they had to do in that manner.

22             And as we then comment on that very slide, the first results were

23     already achieved in year 1992 by limited collection of the revenues and,

24     of course, by undertaking first measure despite the fact that, you know,

25     they did not have all measures yet fully implemented.

Page 35283

 1        Q.   Now, I understand you want to draw our attention to two

 2     particular documents, the first one being 1D 03003.  If could you look at

 3     it.

 4        A.   Yes.

 5        Q.   And again, please speak slowly or read slowly so that we don't

 6     have any problems with the translation.

 7        A.   The Document 1D 03003 is the decision on the war budget of the

 8     Republic of Bosnia-Herzegovina for the period from April to September

 9     1992, Official Gazette, secret strictly confidential 021.  And here it is

10     important, and I would like to raise attention to you to page 3.  The

11     page 3 says under the 778, then there's a total revenues 1 plus 2, it

12     says that the total revenues of the war budget are 41 billion dinars.

13     However, out of 41 billion dinars, 40 billion dinars are being financed

14     from funds, from loans from BH Navodna banka, National Bank of Bosnia and

15     Herzegovina, was by more than 98 percent financing the expenditures of

16     the war budget.  So the total expenses, which on the bottom line equal to

17     the revenues, total expenses, 41 billion equal to the revenues were by 98

18     percent generated by printed cash.  This was situation on the territory

19     of the Republic of Bosnia-Herzegovina as undertaken, as controlled by the

20     central government authorities.

21             The problem or the second what I would like to raise in this

22     issue is that on the expenditure side, I have not seen any meaningful,

23     meaningful transfer of funds to the local communities or to districts.

24     This is the period when the districts were already established, but I do

25     not see any meaningful funds being transferred down to the district.  I

Page 35284

 1     would -- only would like maybe to point to page -- to page 11.  You have

 2     section 34 on the top, and there it says that the Banja Luka lower court

 3     should receive 6.439.000 dinars.  There were only limited outlays --

 4     outlies envisaged for lower -- in that case, lower courts, but I have not

 5     seen any meaningful expenditures to cover activities of local communities

 6     or provision of social services at the local level.  And that's why I, of

 7     course, point to this document because this document, which is the war

 8     budget of the whole country, did not provide funds for the activities

 9     needed to be undertaken at the local level.

10        Q.   All right.  If we could look at the next document --

11             JUDGE ANTONETTI: [Interpretation] Witness, I've been listening to

12     you carefully, and I noted that you said that looking at the documents,

13     you failed to find any trace of fund transferred from the central

14     government to local communities.  Allow me to wind back a little to the

15     times of the former Yugoslavia.  In terms of justice and judges that were

16     working in Mostar in the former Yugoslavia, as far as you know -- or we

17     could take an example of judges in Slovenia.  That would be exactly the

18     same.  As far as you know, during the time of the former Yugoslavia, who

19     paid the Judges working in Mostar?  Were they paid by their federal

20     republic or by the Republic of Bosnia and Herzegovina, or were they paid

21     by local communities?

22             THE WITNESS:  I have -- when we discuss the constitution, we have

23     presented that the republics were responsible to finance judges, the

24     judicial system.  That's why I have pointed to the item when there was a

25     transfer for the Judges even to Banja Luka, Republika Srpska region.  But

Page 35285

 1     what was missing, what is missing in the war budget, the way it was

 2     defined under the decree which we have seen, there should have been

 3     expenditures for the local municipalities or districts if for the society

 4     -- if the whole society should be, of course, benefitting from the

 5     central government authority.  Central government authority financed

 6     these expenditures by borrowing from the central bank but have not

 7     undertaken expenditures on the other side.  That's why somebody needed to

 8     act, and that was the lower-level authorities.

 9             JUDGE ANTONETTI: [Interpretation] Well, you take the example of

10     Banja Luka.  I prefer to stay with Mostar.  So in the former Yugoslavia,

11     in theory, the Mostar-based judges were paid by the Republic of Bosnia

12     and Herzegovina.  That is what you're saying.  When the Republic of

13     Bosnia and Herzegovina became independent, I suppose that the republic

14     must keep paying the Judges.  Is that so or not?

15             THE WITNESS:  That is so, and that's why in the war budget that

16     has been envisaged.  In the war budget, we also have a line for Mostar.

17     Was it exactly actually paid?  I don't know.  I haven't seen actual

18     expenditures.  But what am I missing in the war budget, I'm missing

19     expenditures for other needs of the local municipalities.

20             JUDGE ANTONETTI: [Interpretation] Yes, but as to the Judges

21     working in Mostar, whether they be Croats, Serbs, or Muslims, if they no

22     longer get their pay once they do have work and -- work decided by

23     authority, and work of authority, for the pursuit of this work of

24     authority because without judges -- justice you just have chaos, so who

25     then has to pay for the Judges?  Do the local communities have to pay

Page 35286

 1     them if the Sarajevo government no longer pays the Judges for various

 2     reasons?

 3             THE WITNESS:  Well, I would assume that since the war budget

 4     provided a very limited amount for the budget, for the Judges, the needs

 5     of the judicial system was later covered by local authority, and we would

 6     have an example on the slide 34 where we see that the local authority --

 7     actually, in the phase 2 or the temporary executive authority, the

 8     Croatian Defence Council has undertaken the repair of the high court and

 9     basic common court of Mostar, which would be in normal circumstances a

10     responsibility of central government.

11             JUDGE ANTONETTI: [Interpretation] In your study, did you look at

12     budgetary documents of the time of the Republic of Bosnia-Herzegovina to

13     see whether in the -- as part of the preparation for the budgets there

14     was the inclusion of these republican budgets, be it justice, police, or

15     others, and that there was in that case and via the SDK in Mostar there

16     were payments from the budget of Bosnia-Herzegovina towards the SDK of

17     Mostar so that the SDK of Mostar could pay the Judges?  Did you go and

18     check that?

19             THE WITNESS:  I haven't checked the actual payments.  I checked

20     the Official Gazette with this war budget, but I understood that the

21     telecommunications were down and that the Social Accounting Office based

22     in Sarajevo did not have connections with the Social Accounting Office in

23     Mostar to pay the Judge.  So I do not know how much of these expenditures

24     which were envisaged in this budget had been really undertaken.  However,

25     if as reported by the report of the economic department and the justice

Page 35287

 1     department of the HVO as presented on slide 34 in my report, the repair

 2     of the high court and basic communal court in Mostar have been undertaken

 3     by them, means that they were not receiving funds to take care of their

 4     own repair.

 5             JUDGE ANTONETTI: [Interpretation] So I'll consider a theoretical

 6     case with you.  You're Slovenian; you have responsibilities, so it will

 7     be easier for you to answer.  Let's assume that at the time of the

 8     aggression of the GNA on Slovenia that in Slovenia the central government

 9     no longer exists, is -- no longer has the wherewithal to pay its judges

10     and policeman, and that in a remote region from your capital, that is,

11     there are policeman, judges, military personnel; no one is paid anymore,

12     whereas they have wives, families, children, et cetera.  What would have

13     happened in Slovenia in order to avoid chaos?  What would you have done?

14             THE WITNESS:  We would most likely went with a very similar

15     matters.  If, let's say, the war in Slovenia would not be just for two

16     weeks and during those two weeks' times we were able to utilize some of

17     the strategic reserves that were actually allocated throughout Slovenia

18     in, let's say, free territory of Maribor region, which is the eastern

19     part of Slovenia, most likely very similar measures would be undertaken.

20             I now can also say that attack on Slovenia, which, of course, was

21     a short war, two-weeks' war, was actually at one point in time close to a

22     situation where Ljubljana would be attacked, and in these very

23     circumstances, two things would happen:  Central government would leave

24     Ljubljana to the, you know, reserve position, and most likely in Maribor

25     or northern part, similar type of measures that we have seen envisaged

Page 35288

 1     under the decree on districts by the presidency of the Republic of

 2     Bosnia-Herzegovina and the measures undertaken by the Croatian Defence

 3     Council of the Croatian Community of Herceg-Bosna would be undertaken.

 4     That would be done most likely in Slovenia at some 8 units, because

 5     that's what kind of a number of the quote regions we have, but this is

 6     the way the things would continue.  We would see very similar measures.

 7             Now, how and what kind of measures would that be depends on how

 8     difficult the military situation would be.  But, yes, one would in war

 9     economy situation see similar measures on a particular area of Slovenia.

10             JUDGE ANTONETTI: [Interpretation] Well, still pursuing my

11     hypothetical assumption, so if Ljubljana had been under siege of the GNA

12     with the government blocked in Ljubljana with no contacts with Maribor

13     and that that lasted longer, one week, two weeks, a month, six months at

14     Maribor, what would have happened?

15             THE WITNESS:  Well, what would happened, they would following

16     the, basically, military plans, undertaking their own mostly collection

17     of fiscal revenues, and then they would be paying policeman, army people,

18     hospital employee, teachers out of that proceeds in order, you know, to

19     keep people of Maribor, if this would be a free territory, continue to

20     live.  They would do a very similar activity which we have seen first at

21     the level of local communities and later at the level of group of local

22     communities.  And Maribor, of course, is a big city and a lot of, you

23     know, local communities kind of, you know, surrounded there, so you would

24     see them working together.

25             MR. KARNAVAS:  Just a follow-up to this question.

Page 35289

 1        Q.   Of course, yesterday, you did talk about the self-management

 2     mentality or culture that had existed, and I take it that that -- that

 3     self-management culture was in place in Slovenia as well?

 4        A.   Of course.  It was same system.

 5        Q.   All right.  And going back to the one question concerning the

 6     judiciary.  Yesterday, on slide 26 you referred to a document, 1D 02047.

 7     You will find that in the first binder.  1D 02047.  And I'm sure you will

 8     recall, this is the decree law on the application of the law on the

 9     financing of general social needs, and you directed our attention to

10     Article 2.  And then, again, you directed our attention to Article 3.  So

11     when you find it...

12        A.   Yes.

13        Q.   If you look at Article 2, point 1 -- point 2, Article 2 begins

14     with:  The general social needs of the socio-political communities during

15     an imminent threat of war and during a threat of war shall be...  and

16     under 2 we can see the Constitutional Court of Bosnia-Herzegovina, public

17     Prosecutor's Office and public attorney's office, courts and penal and

18     correctional facilities, and so on.  And then if we look at Article 3

19     that you pointed out where it says that based on Article 2 of this

20     decree, the needs shall be financed from the budget during an imminent

21     threat of war and during a state of war from the appropriate funds of

22     socio-political communities as required.  So when I listened to you

23     answer before to His Honour, Presiding Judge Antonetti, it seems to me

24     that this particular decree dovetails the answer that you have given.

25     Can you comment on that?

Page 35290

 1             MR. STRINGER:  Object to the leading question, Mr. President.

 2             MR. KARNAVAS:  I can rephrase the question, but I'm sure that the

 3     gentleman is capable of answering without me leading the question --

 4     leading him.  Here is the document, you heard the answer, and I'm asking

 5     him to again refer to a document that was already in evidence that we

 6     have already discussed.

 7             JUDGE ANTONETTI: [Interpretation] Reformulate.

 8             MR. KARNAVAS:

 9        Q.   To what extent, looking at this particular decree, and keeping in

10     mind the answer that you provided to us earlier, specifically to the

11     question posed by the presiding judge, Judge Antonetti, does this decree

12     in any way assist you in your answer, and if so, how?

13        A.   Yes.  First, decree law defines -- the law on the application,

14     the law on the financing of general social needs defined in Article 2,

15     number 2, that the central government should finance judges.  But it also

16     says in point 4 that there shall be additional resources to municipality,

17     and in point -- it says in point 8 that it should be also the financing

18     of the work of public services and particularly of health and social

19     welfare.

20             In Article 3, it says that all that has to be composed in the war

21     budget.  The war budget, the way it was defined, and this is the Document

22     1D 03003, has revenues, has funds for judges, but it is missing

23     additional resources to the local municipalities, monies for public

24     services, in particular health and social welfare; and thus, local

25     communities were not receiving funds as defined in the decree law.  So in

Page 35291

 1     the absence of these funds not being there, local communities and later

 2     regional communities had to act.

 3             However, since this is a decree law on the application of the law

 4     of the financing of general social needs and it's a general law and it

 5     talks about that there shall be a war budget, the fact that the Croatian

 6     Community of Herceg-Bosna executive authority have identified the war

 7     budget is perfectly logical.  I'm not a lawyer, so I couldn't say its

 8     legitimate.  But it's perfectly logical that they have undertaken because

 9     central government have not financed the needs.  So they went ahead with

10     creating additional resources and in the war budget of now wider region

11     of Croatian Community of Herceg-Bosna provide for the expenditures that

12     shall be covered during the war or the situation of the imminent threat

13     of war.

14        Q.   Thank you.  Now, if we look at the next document very briefly,

15     and this is a document that we saw yesterday staying with the slide that

16     we're on, and this document is 1D 02959.  I believe you wanted to draw

17     our attention again to this document.

18        A.   Yes.  I will draw attention to page 1 of 2 of that document where

19     the IMF analysed in table 31, Bosnia-Herzegovina expenditure shares in

20     the year 1994, 1995.  And of course, the most interesting for us is 1994

21     because this is the last year which I was looking to it.

22             And we have seen that in the third column -- in the second column

23     where the Bosniak majority areas is presented, in the second line, wages

24     and contributions, there are no funds undertaken in the Bosniak majority

25     area budgets to cover wages and contributions.  This is connected with

Page 35292

 1     this Bosnian -- or soldiers in the Army of Bosnia-Herzegovina.  On the

 2     other side, we see that in the Croat majority area, 11.2 percent of the

 3     total expenditures had been wages and contributions.  And the social fund

 4     expenditures - this is the 1, 2, 3, 4, 5, 6, 7, 8 line - we see that

 5     Croat majority area, percentage of the total expenditures was 18.2

 6     percent while much lower expenditures at the level of the Bosnian

 7     majority area.

 8        Q.   Let me stop you here.  Whatever is on the screen certainly isn't

 9     table 31, so just so everyone knows.  But table 31 has been provided to

10     everyone with our documents.

11        A.   Page 102 of that document, which is now on the screen.  Page 102.

12        Q.   All right.  Well, let's move on.  We can put this on the ELMO if

13     anybody wants it.  Otherwise, we'll move on.

14        A.   It's on.  It's now on.

15        Q.   Okay.  There it is.

16        A.   Should I?

17        Q.   Okay.  Continue very briefly.

18        A.   Yes.  This is now the table 31, percent of total expenditures,

19     and present that under the second column, Bosnian majority area, no

20     expenditures under the line registers and contributions.  11.2 percentage

21     point of the total expenditures were wages and contribution expenditures

22     on the Croat majority area, and under the social fund expenditure line,

23     much level higher of level of expenditures as percent of total

24     expenditures in Croat majority area, meaning that in the area of Croat

25     Community of Herceg-Bosna, with government expenditures all needs of the

Page 35293

 1     society including the social fund expenditure and payments of wages and

 2     contributions were undertaken for the government employees.

 3        Q.   All right.  Thank you.  We can move on to the next slide.

 4             JUDGE ANTONETTI: [Interpretation] If you don't mind, we'll stay

 5     on the previous table.  Registrar, if we could return to the previous one

 6     because I have a question to ask.

 7             Yes, we have the previous table, and there's something that I

 8     failed to understand and I'm sure you will be able to enlighten us.  In

 9     column 2, the Muslim majority area, we see that in the column of figures

10     under the title "Other," 58.2 percent, whereas in the Croat area it's .8.

11     Why this significant difference?

12             THE WITNESS:  Well, this -- I don't know.  I can't comment, but I

13     would assume that these are all goods and services, this all under goods

14     and services, and there seems to be -- military expenditures includes

15     only reported cash expenditures that were carried on the budgets, so

16     there could be some other expenditures under that very column.  But the

17     issue which I wanted to raise is the social fund expenditures and the

18     lack of the wages and contributions in that report shows that -- and we

19     also have been observing that, that the government employees in the

20     Bosniak majority area were not paid or they were paid in kind, not cash.

21     And we also know from this discussion, then, and looking to this report

22     that the social fund expenditures in the Bosnian majority area,

23     especially the pensions, were extremely low, while in the Croat majority

24     area the pensions were paid out something like 60 Deutschemark per month.

25     So there were attempts in the both areas which were different, and I'm

Page 35294

 1     only claiming that in the attempts in the Croat majority area resulted

 2     into a more normal structure of the government expenditures.

 3             JUDGE ANTONETTI: [Interpretation] Concerning military

 4     expenditures, we note that in the Muslim majority area we have 25.4,

 5     whereas in the Croat majority area, 55.8, so almost double; but in 1995,

 6     however, we see that there's a reduction of expenditures in the Croat

 7     majority area and, however, there is an increase in the Bosniak majority

 8     area.  Do you have any factor to explain that?

 9             THE WITNESS:  Well, these are the level of expenditures, so these

10     are the percentage of total expenditure.  There could be two explanation.

11     One is that in 1995 there could be result of the fact that in the Croat

12     majority area you have a bigger economic boom, so with existing soldiers

13     costs, you have other -- you have more revenues being generated and so

14     the expenditure could drop down.  The second possible explanation is that

15     in 1995 - this is already Dayton or post-Dayton - the need for military

16     was lower, so the people had been demobilized.  But I have not been

17     really looking into what was happening in the military, so I can't

18     comment.

19             The only what is obvious from that picture and also from other

20     information in this IMF report is that the economic activity on the

21     territory the Croat majority area as envisaged by the revenues levels of

22     that territory and the revenues levels in the budgets was much stronger.

23     Practically the figure is twice the size -- that the revenues in the

24     Croat majority areas were twice the size of the revenues in the Bosniak

25     majority area, which had looked as a proof that there were the positive

Page 35295

 1     effects for the well-being of all society if, you know, with all these

 2     measures which I was describing.  That is -- that was for me a positive

 3     explanation.

 4             Also, when we were coming into Bosnia-Herzegovina in 1994, 1995

 5     from the south, we could see this, you know, vibrant economy in the area

 6     of -- around Mostar; not so vibrant economy or difficulties in the area

 7     of Sarajevo; quite vibrant in the economy in the area around Tuzla; and

 8     difficulties, economies difficulties in the area around Banja Luka.

 9             JUDGE ANTONETTI: [Interpretation] Final question concerning the

10     roads.  It's very surprising looking at the figures.  We have the

11     impression that in fact no one is interested in the roads, that at the

12     outset the Bosniak majority areas had given some importance.  We had 5.6

13     percent.  The Croats were doing nothing.  There's nothing there.  And in

14     1995, that the Muslims declined quite significantly because we are down

15     to zero, and the Croats do a little something, 1.3, whereas we all know

16     that roads can be economic vectors.  How do you account for that, for the

17     IMF?

18             THE WITNESS:  I would assume that since the road repair, and the

19     road maintenance is somehow linked with the road repair - I mean, it's

20     difficult to say what all it is - were a very strong share of the

21     post-war reconstruction programme; and actually, the first bridges on the

22     Neretva river, which were down, I believe 1992, were actually repaired

23     out of the war bank loans and other international donor institution, and

24     that only came up in 1996, 1997.  So I don't know what is behind this

25     road maintenance figures in the Bosnian majority area, but I guess the

Page 35296

 1     importance of the road construction really, you know, came out much

 2     later.  That's all what I could comment on that.

 3             JUDGE ANTONETTI: [Interpretation] Final question because we could

 4     spend hours here, but we need to move to essential.  An interesting

 5     sector, education, we see that through the figures that the Croats really

 6     did focus on education, whereas the Muslims were doing less.  Is there an

 7     explanation for that or not?

 8             THE WITNESS:  Yes, there's explanation for that, and I have

 9     mentioned in my report that one of the critical moment or one of the most

10     important moment when the society at large in the area of the Croatian

11     Community of Herceg-Bosna realised the value added, the importance of the

12     Defence council was actually in September 1992 when schools were

13     re-opened because of activity by the Croatian Defence Council of Croatian

14     Community of Herceg-Bosna, not just the elementary schools, but also from

15     the report I could read that the university re-opened its classes, first

16     in Neum and later, again, in Mostar.  I do not know what was the

17     situation in -- in different local communities in -- on the area where

18     there were mostly Bosniaks, Muslims, but figures shows that, yes,

19     Croat-majority area budgets had a major impetus for the, you know,

20     education, and the first economic region-wide measures were linked with

21     that.  And when people saw that, and as you know - at least I could read

22     it - there were a lot of fights internally between richer on poorer local

23     communities, when you present the richer local communities that you are

24     not taking the money which they were collecting just to spend it

25     somewhere else but to put it into schools, I believe the authority and

Page 35297

 1     the authority of the Croatian Defence Council of the Croatian Community

 2     of Herceg-Bosna has with debt being built up, and that authority was, of

 3     course, needed later when also the Federation of Bosnia-Herzegovina had

 4     been established.

 5             I understood from discussion with my, you know, counterpart that

 6     actually I don't know how much of, you know, really, elementary schools

 7     and how -- whether the university operated in Sarajevo.  I don't think it

 8     did.  But University of Mostar did operate, and students went to these

 9     classes in Neum, and later, you know, they stayed home.

10             I also said in my report that that will not be done.  People from

11     the region of Herceg-Bosna could simply depart to Croatia, to Slovenia,

12     and elsewhere, and these would be empty economic area, which of course

13     would be, for those that could not go, extremely difficult.  So there was

14     a value added in focusing on provision of the state and social services,

15     education, health, social fund expenditures, pensions, mentioned here,

16     that actually was needed, and this is exactly what we would do in

17     Slovenia if the war would continue.

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

19        Q.   If we could go on to slide 34 very briefly because we do need to

20     get into the third phase.  But on slide 34, if could you just give us a

21     few remarks, and then as I understand it, you wanted to redraw our

22     attention to P 00128.

23        A.   Yes.  This slide discusses really what were the -- some of the

24     expenditures undertaken by the funds collected at the area of wider

25     region of Herceg-Bosna; and you can see repair of government

Page 35298

 1     infrastructure, rehabilitation and equipment of office, support to the

 2     university, chamber of commerce, pedagogy institute, institutions of

 3     culture, water-supply, police department, and last item, the high court

 4     and basic communal court in Mostar.  I'm saying this because two years

 5     later in early 1996, when the first World Bank money was spent, the first

 6     World Bank money spent in Bosnia-Herzegovina went for the repair of

 7     courts of Sarajevo.  Courts in Mostar had been already repaired by

 8     activity of the Croatian Community of Herceg-Bosna.

 9        Q.   All right.  Should we go to P 00128, or should we move on?

10        A.   Well, this document just confirms, you know, just actually list

11     all this type of repairs that were undertaken, so we could move on.

12        Q.   All right.  Your Honours, I see -- I notice the time, and I

13     believe this is a time for the break.

14             JUDGE ANTONETTI: [Interpretation] Very good.  Let's break.  After

15     the break you'll have 30 minutes left, so we'll no doubt -- and I hope

16     the examination of Prlic Defence -- today.  20-minute break.  We resume

17     in 20 minutes.

18                           [The witness stands down]

19                           --- Recess taken at 5.38 p.m.

20                           --- On resuming at 5.58 p.m.

21                           [The witness entered court]

22             MR. KARNAVAS:  May I begin, Your Honour?

23             JUDGE ANTONETTI: [Interpretation] [No interpretation]

24             MR. KARNAVAS:  Okay.  Thank you.

25        Q.   All right.  Now, we have a half-hour left, so we'll have to go

Page 35299

 1     through the remainder of your presentation, which I do believe is

 2     possible.

 3             MR. KARNAVAS:  And Judge Trechsel, for slide 35, we have several

 4     documents.  If we get to the point of saturation, I'm sure you will let

 5     me know.

 6             JUDGE TRECHSEL:  It's to assist you in your time management.

 7             MR. KARNAVAS:  I understand, but a hint would be welcome.

 8        Q.   If we look at now slide 35.  If you could -- now we are into

 9     phase 3.  If you could comment on that.

10        A.   Yes.  In slide 35, we present the phase 3, which really started

11     with the establishment of institutions, mainly the decision of

12     constitution of the House of Representatives of the Croatian Republic of

13     Herceg-Bosna, and then there were a follow-up, monetary policy and

14     financial measures undertaken, all of them to strengthen economic system.

15     Very important, Deutschemark had been put in, into -- also, into domestic

16     payments, all linked with the fact that you wanted to really support

17     economic developments, and there was also further development in the

18     financial sector; insurance companies were, you know, strengthened to

19     provide -- for the authorities to provide much better functioning of the

20     economy.

21             In that respect, I also would like, of course, to say that the

22     budget policy and measures undertaken for the interim budget 1994, with

23     the documents that I could see, assumptions and basic data for the 1994

24     budget revenues and expenditures, they confirm that they have undertaken

25     everything what wider economic area need to do when preparing its budget

Page 35300

 1     and its expenditures.  So the phase 3 is a phase where the economy was

 2     rounded, and thus, such Croatian Republic of Herceg-Bosna was

 3     economically very easily to be integrated into the Federation of

 4     Bosnia-Herzegovina once this agreement had been reached.  And again,

 5     these are measures that were expected given the war economy and expected

 6     given the fact that local communities' independent actions would be

 7     negative for economic developments.

 8        Q.   Thank you.  Now, if we can go through some of these documents

 9     that you have selected as examples.  We can start with P 04589.

10        A.   Yes.  This is the Official Gazette of the Croatian Community of

11     Herceg-Bosna as of October 11, 1993, when the decision on the House of

12     Representatives is been defined, and that --while here, I would like to

13     point to Article 7, where it says that the house -- on the second page of

14     that English translation, where it says in Article 7 that the house of

15     representatives shall approve the republic's budget.

16        Q.   Very well.  If we go on to the next document, and again, I'm

17     going to ask you to have a little pause and enunciate.  P 09551.

18        A.   This is English translation of the document, which are the

19     reports of the government and of the Croatian Republic of Herceg-Bosna,

20     and on page 36, it explains under the Article -- under the title "payment

21     system" that the payment system in Croatian dinar was realised to payment

22     system office, which was established upon the transformation of SDK at

23     the end of 1993, and then explains the -- which municipalities were

24     included.

25             Also it says in the last sentence, after founding the Hrvatska

Page 35301

 1     banka company Mostar and LT comerciana banka company Livno, the external

 2     payment system was established mostly with the Republic of Croatia.  Then

 3     it says in the third-from-the-bottom paragraph:

 4             "As opposed to the first half of 1993, when only a limited number

 5     of legal persons carried out payments through the payment system

 6     organisations, in the second half, a large number of users had opened

 7     giro-accounts either in HRD or in Deutschemark, so at the end of 1993,

 8     there were over 1.300 active accounts."  A sign of a vibrant economy.

 9             Then I would like to point to page 42.

10        Q.   Let's find it.  Pause a little bit.  Okay.

11        A.   42 out of 83.  On that page, there are really two important

12     figures which I would like to point.  Page 42, I don't see it yet on the

13     screen.  English translation is the page 42, so there is information

14     about the budget revenue, and it says that 104 thousand million HRD are

15     the tax revenues, 52 are revenues from credits, and 57 are donations.

16             On the page 42 on the top, there it says that the total revenues

17     are 217 thousand million Deutschemark.

18        Q.   This would be on page 43?

19        A.   It would be on page - sorry - 43 on the top.  It says that

20     217.000 is the total revenues, but only one-quarter, one-quarter compared

21     to 98 percent as we have seen in one of the previous slides is being

22     financed by credits, and then we --

23        Q.   Let me stop you here.  When you say 98 percent, you were drawing

24     our attention to a previous testimony.  What are you referring to because

25     we need to have a very clear record.

Page 35302

 1        A.   Yes.  98 percent is the amount of the borrowings from the

 2     Republic of Bosnia-Herzegovina to finance the needs of the war budgets in

 3     1992, and here we see it only one-quarter, which means more ability

 4     created out of the normalisation of the economic activity in the Croatian

 5     Republic of Herceg-Bosna been undertaken, and thus higher tax revenues

 6     and thus less needs for borrowing, quite normal or normalisation of the

 7     economic situation.

 8             And then we see on page 43 a list of budget expenditures as

 9     defined for different ministries, and of course I think it is important

10     to say that practically all ministries are involved in the budget

11     expenditures.

12        Q.   Before we move on, when we look at this particular document, the

13     way the budget is laid out in a rather transparent fashion, can you tell

14     us to what extent this would mirror sort of the -- another budget, say,

15     from the area, from that particular region?

16        A.   Well, I have been deputy minister finance and secretary of the

17     ministry of finance in the republic of Slovenia, and we were preparing

18     before reforms in 1999 a very similar type of budgets.  Of course, we are

19     more lucky that we did not need to borrow more than maybe 5 percentage

20     points, but, you know, this is because of the economic circumstances.

21     But on the structure of the budget, the pre-conditions for calculation

22     the needs, quite exact estimations of the number of people, wages,

23     et cetera.  This is a type of the budget that one could expect in the

24     region before, of course, those reforms had to be undertaken as one

25     entire European unit, but that was not expected in the 1994 period yet

Page 35303

 1     here.

 2        Q.   All right.  And just one final question because I'm not -- I'm a

 3     little confused, perhaps.  On page 42 where we looked at revenues from

 4     credit, 52, and then donations, we saw 57, and then you told us that a

 5     quarter, based on the total amount from page 43, you use that figure as

 6     opposed to 98 percent, the 98 percent being from Bosnia-Herzegovina, the

 7     republic, and are we to understand based on your testimony yesterday that

 8     that's the 98 percent where the central bank was just basically printing

 9     money with nothing to back that currency?

10        A.   Yes, that is exactly true.  The 98 percent referred to the war

11     budget of Republic of Bosnia-Herzegovina where the money had been printed

12     by National Bank of Bosnia-Herzegovina.  Here, I understand these are the

13     revenues from credit mainly provided by commercial banks because we have

14     not seen and I have not seen any central bank being created on the

15     territory of Croatian Community of Herceg-Bosna, which means that, also,

16     these revenues from credits had been backed by some savings in commercial

17     banks, and I guess that were at that time mainly so-called Hrvatska banka

18     Mostar.

19        Q.   All right.  Thank you.  And incidentally, that 98 percent that

20     you indicated, was that from the document that we saw earlier concerning

21     the war budget, which would have been 1D 03003?

22        A.   Yes.  This is the document of the war budget of the Republic of

23     Bosnia-Herzegovina.

24        Q.   Thank you.  Now, if we go on to the next document.

25             JUDGE ANTONETTI: [Interpretation] One follow-up question.  This

Page 35304

 1     document we have still on the screen about expenditures broken down by

 2     ministries, mainly, we can see that for the Ministry of Defence, it is --

 3     it represents just about 80 percent of the budget.  Is that a classical

 4     ratio in times of war, or is this something rather exceptional?

 5             THE WITNESS:  This is the budget expenditures for the

 6     distribution for the January 1993 to December 1993, and given the fact

 7     that this is the time of the war, I would say, yeah, it's quite logical

 8     the highest portion of expenditures will be with the war.  And as we have

 9     seen later on -- before when represented 1994 and 1995 figures as

10     presented of the IMF document, that portion then dropped down to below 40

11     percent.  But 1993, this is war, period.  So it's logical that this was

12     that high level of expenditure.  But from my economic point of view, what

13     was more important, there are other ministries there, and that's a

14     full-fledged -- I mean, that's kind of a -- all ministries that one would

15     expect to cover, you know, government needs, especially, you know,

16     customs, financial police, ministry of work and social services,

17     et cetera.

18             JUDGE ANTONETTI: [Interpretation] Well, in a period of war -- we

19     have 170 million here in this document.  What kind of expenditures were

20     there?  Are they connected to purchase of weaponry or -- well, it may not

21     be a classical budget by European standards.  Well, you have operational

22     cost and investment costs.  It's difficult to see what is devoted to --

23     earmarked to investments or to operations.  But I suppose that out of the

24     170 million, most of it is devoted to purchasing weapons, while paying

25     the sole dues based on documents that we have had an opportunity to see,

Page 35305

 1     that is done by local budgets, isn't it?

 2             THE WITNESS:  No.  At that time - this is 1993 - the most of the

 3     Ministry of Defence expenditures would go to finance defence units as, I

 4     guess, developed at a level of Croatian Community of Herceg-Bosna, and I

 5     believe the most of it would go either for the wages, for the outlays of

 6     the soldiers, and for the ammunition, weaponry, and all that.  But I have

 7     no -- I did not have any detailed information into it.  For me, reading

 8     these documents was extremely important that as we present what other

 9     departments were doing, and here I would like to refer to page 45 where

10     you have description of the department for economy, and in the bottom of

11     that there's a paragraph that there was the coordination and monitoring

12     of the operation of public enterprises has continued, which means that

13     they were making efforts to normalise economy situation.  And this is why

14     I have said that this is a normal structure of the budget.  It is not

15     just the, you know, war budget, military budget.  This is the budget

16     where government, where authorities have undertaken necessary activities

17     linked with support of the whole economy.  We have later on this case

18     what they were doing in the forestry, mining industry, water resource

19     management.  These are all typical government activities.

20             JUDGE PRANDLER:  Yes, thank you.  Sorry.  Thank you very much.  I

21     would like also to have a follow-up question or questions concerning the

22     question which you raised, that is the lacking of support by private

23     banks, which were in a way used by the central budget of the Republic of

24     Bosnia-Herzegovina, and you mentioned the example, one of the -- one of

25     the banks of the Hrvatska banka in Mostar.  Now, my question is for if

Page 35306

 1     the Hrvatska banka was -- in Mostar, of course, belonged to the whole

 2     chain of banks, private banks that within Hrvatska banka system, I

 3     believe which was a bank, private bank in Croatia, is my first question;

 4     or Hrvatska banka was a bank which had its headquarters not only in

 5     Zagreb but elsewhere.  That is the first question.

 6             The second question is that if you have any more details

 7     concerning the composition of that kind of loan provided by Hrvatska

 8     banka to the central budget, if it was an important part of the budget as

 9     far as percentage goes or it was in a way negligible.

10             And my number three question would be if you have any details or

11     any data as far as those people, either private people or firms which

12     contributed to Hrvatska banka, I mean by depositing money.  Thank you.

13             THE WITNESS:  Thank you, Your Honour, for your question.  As far

14     as Hrvatska banka joint stock company Mostar is concerned, in my document

15     I also refer to the fact that this is a bank which was licensed by

16     National Bank of Bosnia-Herzegovina in 1992, I believe, and it was

17     composed of what used to be branches of Croatian banks that had their

18     headquarters in Zagreb.  They had a branch in the territory of

19     Bosnia-Herzegovina, but in 1992, this bank was re-established so the

20     branches had to ask National Bank of Bosnia-Herzegovina for a licence to

21     operate on the territory as an independent legal entity.  By accident or

22     by the fact that in 1997, 1998 period I actually worked in Nova

23     Ljubljanska banka, which is one of the banks in Slovenia, and we at that

24     time visited Hrvatska banka Mostar joint stock company, and we saw its

25     ownership; it was owned by -- it was a Bosnian bank.  We actually -- the

Page 35307

 1     Slovenia bank were even considering wanting to buy that bank, but it was

 2     a bank which was relicensed.  It was to a certain extent very odd why

 3     they did it in the Croatian Community of Herceg-Bosna and why the

 4     National Bank of Bosnia-Herzegovina did it.  But it was logical, logical

 5     legal act, because Bosnia and Herzegovina had become a new state, and a

 6     new state has to licence a banking institutions.  So it was very legally

 7     appropriately that owners of Hrvatska banka, which were previous

 8     branches, ask the National Bank of Bosnia-Herzegovina for relicensing,

 9     and they got a licence.

10             Now, the depositors in this very bank were, from my

11     understanding, mainly those holders of - I mentioned before the figure -

12     1.300 accounts, which were the private and legal entities, small shops,

13     small traders, but also, I've seen that in 1995 and seen 1997 also some

14     -- or the re-activated manufacturing enterprises.  They were those that

15     were actually holding -- you know, they were doing business with that

16     bank and they were doing the deposits.

17             On the financing, I did not have much details of the -- who

18     actually provided sources of financing to the budget, but since there

19     were no central bank on the territory of the Croatian Republic of

20     Herceg-Bosna, the only two other options, and that is that financing is

21     provided by the financial system which existed then, and that is Hrvatska

22     banka, Ljuna [phoen] bank, insurance companies, et cetera.  That is all

23     what I can say on the base of the recommendation which I reviewed.

24             JUDGE PRANDLER:  Thank you very much for the clarification.

25             JUDGE TRECHSEL:  I have, first of all, a follow-up question or a

Page 35308

 1     question regarding your answer.  You said first a few minutes ago that

 2     the Hrvatska banka Mostar was relicensed by Bosnia-Herzegovina, and later

 3     on - and this is on the last line of page 83 and then 84 - I read:  It

 4     was to a certain extent very odd why they did it in the Croatian

 5     Community of Herceg-Bosna.  And you have also said that it was normal

 6     when there was a new state, new licensing was required.  Can you tell us

 7     more about this relicensing by HZ HB?

 8             THE WITNESS:  Well, the relicensing was done by National Bank of

 9     Bosnia-Herzegovina.  But it was done in the period when the Croatian

10     Community of Herceg-Bosna already exist, and I would like here to make a

11     comment, which is like follows:  If authorities of the Croatian Community

12     of Herceg-Bosna would do nothing and they would not relicense or request

13     that the branch of a bank based in Zagreb request a licence from

14     Sarajevo, National Bank of Bosnia-Herzegovina, in a much quicker manner,

15     economically, territory of Croatian Community of Herceg-Bosna would be

16     economically part of Republic of Croatia.  And why I say odd?  There --

17     of course, these banks in the pre-war time could operate throughout

18     Yugoslavia.  Now, with the war they could not continue to do that unless

19     there would be an agreement reached between the Republic of

20     Bosnia-Herzegovina and the Republic of Croatia that banks licensed in a

21     particular country could operate across borders.  Such agreement was not

22     reached, so it was logical that they have requested for relicensing.

23             And relicensing went against the economic interest of Republic of

24     Croatia, so the owners of those branches, you know, had to do another

25     effort.  And of course, by getting a licence from the National Bank of

Page 35309

 1     Bosnia-Herzegovina, this now became Hrvatska banka joint stock company

 2     based in Mostar, and it could operate only on the territory of Republic

 3     of Bosnia-Herzegovina, and I believe later on it was quite successful

 4     bank, and I believe it's now owned by UniCredit in Tesa, one of the

 5     Italian big banks.  We looked into that bank in 1997.

 6             JUDGE TRECHSEL:  Thank you.  The other question was, what we have

 7     looked at as "budget," I take it that this is a very condensed excerpt

 8     just taking the sums per ministries whereas the actual budget, which was

 9     elaborated, would have been much more detailed.

10             THE WITNESS:  Yes.  The actual budget, if you want a more

11     detailed information of the budget would in principally be much more

12     detailed, and I'm sure that one would look to a particular section, could

13     get much wider information, but this is what I got.  I did not have any

14     more information, and even that, when I was reading -- especially when I

15     was reading the Croatian versions of that and, you know, B/C/S versions,

16     I could see that this is, of course, a different approach, more

17     economically sensible, and the budget reflects the overall positive

18     economic developments in the territory of Croatian Community and later

19     Croatian Republic of Herceg-Bosna.

20             JUDGE TRECHSEL:  Thank you very much.  I had also understood it

21     this way, and of course I do not think the Chamber needs, actually, more

22     detail.  I was just making sure.  Thank you.  Sorry, Mr. Karnavas.

23             MR. KARNAVAS:  That's fine.

24        Q.   Just a follow-up question to the questions concerning the bank,

25     and I'm going to be asking a couple of leading questions, but I'm sure

Page 35310

 1     I'll be stopped if I get too far ahead of myself.  In the course of your

 2     examination in trying to prepare your report, you came across documents

 3     that, as I understand, and we have seen here in court from the central

 4     banker at the time from Bosnia-Herzegovina, Mr. Andrit [phoen].  Is that

 5     correct?

 6        A.   That's correct.

 7        Q.   And it's based on those documents that you answered the questions

 8     posed to you by His Honour?

 9        A.   Exactly.

10        Q.   All right.  Thank you.  Now, we're going to skip some documents

11     so we can finish on time, and I'm going to direct your attention now to P

12     07628, so we'll skip two documents in your binder and go to P 07628.

13     This is another interim budget.  If you could look at that.

14        A.   Yes.

15        Q.   And if you could kindly comment very briefly.

16        A.   Yes.  This is the document, interim budget of the republic from

17     1994, and on page 1 of that document, first there are basic principles of

18     the budget.  I'm, you know, somebody who is dealing with the public

19     expenditures management issue, and just the first line reading:  The

20     budget is balanced on the basis of gross principles.  This is a very

21     logical, normal, but extremely high standard of preparing the budget,

22     which means that all revenues and all expenditures are to be presented.

23             Second line, it says that:

24             "Legal regulations on taxes and duties pertain to all state

25     organs, municipalities..." et cetera, is explicitly envisaged in the

Page 35311

 1     legal regulation.  Again, a good sign of a good public expenditure

 2     management.

 3             Last line on that page 1:  For all procurement, a tax on the sale

 4     of products, et cetera, is to be paid, which means, again, no exemptions

 5     from government expenditures as far as the paying of the taxes is

 6     concerned.  And I would like to refer to page 2, line - 1, 2, 3, 4, 5 -

 7     5:  The ministries and offices which needs to procure materials, fuels,

 8     lubricants, equipment, and other needs exceeding 100 Deutschemark per

 9     year are obliged to organise a unified procurement financial accounting

10     service, a good practice requesting good public procurement in order to

11     prevent fraud, negative effect, et cetera.  So all these principles that

12     one would like to really see put in place in all countries of

13     transitions, which was of course not the case.

14             I would also like to refer, if I may, given the time constraint,

15     on page 4.  There is chapter 2, data for the assessment of revenues and

16     spending.  And there's some figures, population, employee, et cetera.

17     What is important, these figures are what usually one does when start

18     preparing the budget.  So a very clear instructions and very clear

19     information given to whom?  Most likely to the parliament of the house of

20     representative of the Croatian Republic of Herceg-Bosna on how the budget

21     had been prepared and had been adopted, which means these were for me all

22     clear signs that you can assess that the 1994 interim budget

23     expenditures, interim budget reviews are of a very similar type and

24     extent as in normal circumstances.

25        Q.   Thank you.  If we can go on now to the next document, P 08035.

Page 35312

 1     This is, again, another budget.

 2        A.   Yeah.  If we have seen before the interim budget, which is

 3     usually prepared when the real budget is not prepared, here is the

 4     document P 08035, which is the budget for the six months of 1994, already

 5     approved, and it follows the same very good principle.  The only

 6     difference that the English translation does not have on page 1 and page

 7     2 appropriate figures.  But an important information which I would like

 8     to present to the Chamber is that before the basic principle for the

 9     budget, there are two lines on top of it, average salary and average

10     pension.  And in the Croatian translation, that is presented as average

11     salary 150 Deutschemark and average pension of 60 Deutschemark.  This is

12     1994.  This is a very good result for the post-war situation.  Again, for

13     me, a sign that by 1994 in the Croatian Republic of Herceg-Bosna,

14     economic situation had almost normalised.

15        Q.   All right.  Now, we're going to skip the other documents that

16     relate to this slide, and those would be 1D 00028, 1D 00026, 1D 0019, and

17     we already skipped 1D 00032 and 1D 00038.  But as I understand it, these

18     were the sort of documents that you had selected in order to support your

19     presentation here today, which, again, these are just examples?

20        A.   Exactly.  This examples presenting what kind of measures could be

21     undertaken to put together the budget that we just presented, both on the

22     revenues and expenditures side.

23        Q.   All right.  With that, let's go to the very last document that

24     you have, and that would be for slide number 36.

25        A.   Yes.  The slide 36 talks about realisation by authorities, both

Page 35313

 1     the presidency of Republic of Bosnia-Herzegovina as well as the regional

 2     authorities, that there is a need to establish mechanisms for

 3     coordination between local communities.  And the document 1D 00509,

 4     issued by the presidency of the Republic of Bosnia-Herzegovina on August

 5     13th, 1992, and the document is decree with a power of law on

 6     establishment and work of district, was for me a recognition by the

 7     presidency that if in a country with around 4 million people, 100-plus

 8     small ministates were to be -- were to create, the central authority had

 9     to found an intermediate solution, and that is establishing seven

10     districts.

11             Now, the document read, and I have and analysed it extensively in

12     my document, what this decree -- what these districts have to do.  And

13     these districts, especially as defined in -- on page 3 where there is

14     chapter Roman iii, rights and duties of the districts, and then it goes

15     Article 8, 9, et cetera, it explains that actually these responsibilities

16     of the districts are now from the presidency of the Republic of

17     Bosnia-Herzegovina vested authority down to the district that would be

18     normally a state function.

19             I would like to refer, also, to chapter -- to page -- to page,

20     just as an example, 10, Article 40.  In this Article 40, the presidency

21     of Republic of Bosnia-Herzegovina said, that there will be seven

22     districts, and there will be seven District Secretariat of Economy, and

23     Article 40 reads:

24             "The District Secretariat of Economy shall perform tasks and

25     assignments namely..." and then it goes, in the field of energy supply,

Page 35314

 1     mining, and industry, undertake and propose appropriate measures for

 2     monitoring of accomplishment of production, et cetera.  Then it explain

 3     what will be the field of agriculture, et cetera.  These are classical

 4     functions of the ministries in any country.  These are the classical

 5     functions that are the functions, let's say, of the ministries, line

 6     ministries in the republic of Slovenia.

 7             So obviously, the central government authority and the presidency

 8     of the Republic of Bosnia-Herzegovina could not out of besieged Sarajevo

 9     control what is happening in the local communities; and thus, they have

10     asked by this decree for establishment of seven districts and for those

11     districts to really run economy on their own area.

12             And the way I see, what were economic developments in areas with

13     Croat majority over the 1991 to 1994 period, especially after, you know,

14     second half of 1992 and 1993, these were very similar developments, very

15     much in line with the authority vested in district by the presidency

16     decree with a power of law on establishment and work of districts.

17        Q.   All right.  Your Honour, I don't know how much time I have left,

18     but I do want to wrap it up, if I can.  Five minutes?  All right.  Unless

19     there are any questions --

20             JUDGE ANTONETTI: [Interpretation] Mr. Karnavas, the Registrar

21     informs that you have five minutes left.

22             MR. KARNAVAS:  Thank you, Mr. President.  Unless there are any

23     questions concerning this area, I will move on.

24             JUDGE ANTONETTI: [Interpretation] Yes.  Just returning to the

25     question of the districts.  When on Monday you mentioned this point, I

Page 35315

 1     asked myself what was the purpose of addressing this question, and now in

 2     seeing the text before our eyes and particularly line 6 where we mention

 3     the district of Mostar, et cetera, I'm drawing a parallel with the

 4     Croatian Community of Herceg-Bosna, and I'm asking myself, and you may

 5     well be able to enlighten me here, as to whether in fact the district

 6     that was envisaged in Sarajevo in this text is not in fact give or take

 7     what we have with the Croatian Community of Herceg-Bosna.  What are your

 8     thoughts on that?

 9             THE WITNESS:  Well, you are correct.  The district of Mostar was

10     centred in Mostar, and the territories municipalities as they are

11     mentioned here, they are more or less those that compose the Croatian

12     Community of Herceg-Bosna, and presidency established in this district is

13     actually giving the District Secretariat for Economy authority to manage

14     the economy in this very area and, also, request other function --  there

15     are, you know, other -- this economy -- this secretariat for economy,

16     social affairs, finance, education, et cetera, all to do measures which

17     we have seen that were undertaken by the Croatian Defence Council of the

18     Croatian Community of Herceg-Bosna.  It was just not titled district of

19     Mostar or whatever it would be.

20             I have analysed their economic powers vested in them.  I was not

21     looking from the point of view of which local communities were, but

22     clearly, central government authority realised that instead of having

23     50-plus small local communities doing what they were asked to do with

24     this law on the financing of the social needs in the time of the war,

25     realised the need to coordinate and to have an organisation between the

Page 35316

 1     republic and local communities, and they called them district.  The way I

 2     see economically Croatian Community of Herceg-Bosna, I see it as this

 3     intermediate level.  That later on merged into Federation of

 4     Bosnia-Herzegovina.

 5             MR. KARNAVAS:  You have a question?  Okay.  I thought I saw you

 6     on the ready.

 7        Q.   All right.  I have five minutes left, and we have two slides

 8     left, 37 and 38, and basically these concern your final remarks

 9     concerning your presentation, which is a summary essentially of your

10     report, 200-page-plus report, with nearly a thousand footnotes.  If you

11     could kindly wrap it up for us.

12        A.   Well, in these two slides are my final remarks.  With the war,

13     the provision of administrative social services was severely disrupted.

14     There was a vacuum created.  Republic of Bosnia-Herzegovina did not have

15     an effective governance.  Local communities and regional authorities had

16     not much choice but to react to this situation.  To enable survival of

17     the people to ensure appropriate supply and demands, they have acted as

18     one state should act in war circumstances.  And what then emerges, as I

19     was asked to look deeply into what was happening in the Croatian

20     Community of Herceg-Bosna, is that the Croatian Defence Council seriously

21     attempt to resolve the basic needs and services at the local and the

22     regional level.  It could wait.  It could do nothing.  It could not

23     re-establish the border crossing with the Republic of Croatia.  It could

24     not relicense Hrvatska banka or insurance company, but if they would not

25     do nothing then it would simply mean that the region would connect to

Page 35317

 1     Croatia.  They acted differently.  They acted so that they were solving

 2     the basic economic and social needs of the population.

 3             And on the last slide, I say that these regional actions were

 4     somehow based or they were a follow-up on the local actions, and I have

 5     shown and was comparing the matters of the local communities; I have seen

 6     no difference.  Local communities and later regional authorities acted in

 7     a very similar manner.  Tuzla, Jablanica, Maglaj have same problem.  And

 8     yes, Bosnia-Herzegovina suffered an economic collapse with the war.  If

 9     that would happen in Slovenia and Slovenia would have one-year war, we

10     would most likely have such economic area being created.

11             I hope that my study and what we have been -- what we have been

12     presented is that you, High Court, got a good review of what happened on

13     economic front in the country.  What needed to be done by local

14     authorities and later by regional authorities to ensure social and other

15     services and functions to be performed for the citizens was a logical

16     reactions once the federal and republican institution ceased to fulfill

17     their economic functions.

18        Q.   Thank you very much, Mr. Cvikl.  With that answer, I have no more

19     questions on direct examination.  I appreciate your testimony.  I would

20     hope that you would be as frank and forthright with the Prosecution or

21     anyone else who may have any other questions for you during the next

22     couple of days.

23             MR. KARNAVAS:  Your Honours, that concludes my direct

24     examination.

25             JUDGE ANTONETTI: [Interpretation] Thank you, Mr. Karnavas.  I

Page 35318

 1     have just a very brief follow-up question, but taking advantage of your

 2     -- the fact that you're Slovenian to put this question to you.  Earlier,

 3     I by chance looked at the map of your country because the Registrar maybe

 4     just mishandled and in fact, your -- the map of your country appeared on

 5     the screen.  I noted that an important country bordered on your frontier

 6     Austria, so if I'm mistaken don't hesitate to interrupt me.  So Austria

 7     shares the border with you now.  At the time of the dismantling of the

 8     former Yugoslavia and when your country acceded to independence, I assume

 9     that Austria through its economic renown no doubt played some role in the

10     regions close to its border, but Slovenian regions.  To your knowledge,

11     in those years, 1991, 1992, was there not in circulation Austrian

12     currency as there were Deutschemarks in Herzegovina?

13             THE WITNESS:  Yes, but as far as the Austrian currency is

14     concerned, you should know that since early '60s, there's a fixed

15     exchange between Deutschmark and shilling that is 7:1, and since most of

16     the gastarbeiters were using -- were actually in Germany, Deutschemark

17     was more prevailed para-currency in territory either of Slovenia as well

18     as Croatian Community of Herceg-Bosna.  Simply more gastarbeiters were

19     there, but I believe if anyone would bring a shilling, since there is a

20     fixed exchange 7:1, they would also take shillings.

21             JUDGE ANTONETTI: [Interpretation] So if I understand well, in the

22     areas, in the border areas there circulated in the years 1991, 1992, it

23     appears in addition to your own currency, there were Deutschemarks and

24     Austrian shillings in circulation?

25             THE WITNESS:  Okay.  In Slovenia, immediately after the

Page 35319

 1     independence on the 25th of June, we only established custom borders.

 2     Then there was a two-weeks attacks by the Yugoslav Army.  Then there was

 3     a peace, and with this peace agreement, we have agreed that for three

 4     months we will not undertake follow-up measures.  So only on 8 of October

 5     1991, three months after the signing of the Brioni agreement, which was

 6     on 8th of July, we replaced Yugoslav dinars with the Slovene coupons.

 7             In the meantime, there were parallel currency, people were using

 8     different type of cash, including, you know, shillings, Deutschemark,

 9     dollars, et cetera.  Once on 8 of October 1991, Yugoslav dinar was out of

10     the system and there were Slovene coupons we were doing our utmost to

11     reduce the inflation and to increase the backing of the Slovene coupons.

12             As we were also having up and running banking system and up and

13     running Social Accounting Office in Slovenia in 1992 to 1994, there was

14     no need to continuation of people using either on the black market or as

15     a parallel currency at the border crossing also Deutschemark or

16     shillings.  So down the line Slovene dollar, as it was later renowned and

17     stamped, et cetera, became a strong convertible currency, and that lasted

18     up to 1st of January 2007 when it replaced dollars with Euro.

19             So the situation was we were not in war situation and we had a

20     strong currency because if you would look at the time in our budget you

21     would see that there were no financing of the central government budget

22     from the central bank, and thus currency which was utilized was

23     trustworthy currency.



Page 35320

 1             JUDGE ANTONETTI: [Interpretation] Very well.  But the shift to

 2     the Slovenian tolar, which you said was a strong, hard currency, that

 3     happened gradually.  The Slovenian inhabitants, did they have fears or

 4     doubts, and at that point did they prefer world-recognised Deutschemarks

 5     and convertible, I mean, didn't that all take some time?

 6             THE WITNESS:  Well, that has to do with two factors.  First, on

 7     8th of October when we put in replacement the new coupons, we also have

 8     established exchange rate which was a fluctuating exchange rate, which

 9     means we did not try to attempt and steal from citizens holding Slovene

10     dollar some value to so-called inflation tax.

11             So, yes, it took some time but the most important for Slovene

12     independence and economic development was that our monetary and our

13     fiscal policy were prudent.  We did not need to, it's true, have a lot of

14     expenditure on defence, but we did not have holes in our budgets so

15     people, you know, trusted Slovene tolar.  Actually, in 1990s, bank of

16     Slovenia and Slovene tolar are among the most valued institutions in

17     Slovenia.

18             JUDGE ANTONETTI: [Interpretation] Very good.  I put that

19     question, you have understood it was to establish a link with the

20     circulation of the Deutschemark in Herzegovina at that time to see

21     whether there were points of convergence or divergence.  Thank you for

22     answering my question.

23             Mr. Kovacic, have you been able to agree with Mr. Praljak to put

24     questions, if you have any?

25             MS. NOZICA: [Interpretation] Your Honours, with your permission,

Page 35321

 1     I have made an agreement with Mr. Kovacic and I might need 15 minutes in

 2     actual fact to ask the witness a few questions, and I'll tell you what

 3     I'm going to refer to.  Unfortunately, I can't do that this evening.  I

 4     can't start this evening, but it was on page 81 with your question that

 5     this came to mind, which -- your question relating to a document on our

 6     screens.

 7             At that point in time on our screens we had a document which was

 8     a financial report of the HZ HB, and you asked the question, you asked

 9     whether it was that amount because the rest was financed by the

10     municipalities.

11             Now, the witness's answer followed, and I think there might have

12     been a misunderstanding rather than an imprecision because the witness

13     gave different conclusions in his report.  So I should just like to show

14     the witness some documents, to put them to him, which he saw during the

15     preparation.  This would last 15 to 20 minutes, but if possible I would

16     like to start tomorrow morning once I prepared the documents.  Thank you.

17             JUDGE ANTONETTI: [Interpretation] Very good, we are close to 7

18     o'clock.

19             MR. KOVACIC: [Interpretation] Your Honours, let me respond to

20     your question.  No, I have not had consultations with Mr. Praljak and

21     reached an agreement, but with your permission may I have five minutes

22     perhaps tomorrow morning, it's not a good idea to do that this evening,

23     but anyway I have your decision of the 24th of April here before me, your

24     decision of June and September, as well, and the Appeals Chamber's

25     decision dated September 2008, and I consider that my request was

Page 35322

 1     completely in keeping with the decision of the 24th of April, which is in

 2     force, and I, therefore, request that you give me five minutes before we

 3     introduce the witness tomorrow to make a submission, bearing in mind your

 4     ruling and referring exclusively to your ruling, your decision.  And I'd

 5     just like to remind you so that you can have a look at this yourself.

 6             On the 24th of April was the date of your ruling, which set the

 7     frameworks and certain limitations for cross-examination by the accused.

 8     Afterwards, there were certain problems with the interpretation of that

 9     ruling and in June last year you made a new ruling which you narrowed

10     down and gave a restrictive interpretation with respect to a particular

11     and special circumstances.  And we appealed that ruling, and after the

12     Appeals Chamber's ruling, the only decision in force is your ruling of

13     the 24th of April.  And that particular ruling, I don't want to present

14     my arguments about that now, we can go into that tomorrow, but anyway, it

15     provides for two specific circumstances, when in principle you will allow

16     the accused to ask questions himself.

17             In that ruling, at paragraph 3, you provided for the following,

18     and I'm going to read it out:

19             [In English] "Exceptional circumstances relate in particular to

20     the examination of events in which an accused participated personally or

21     the examination of the issues about which he possess specific expertise."

22             JUDGE TRECHSEL:  Mr. Kovacic, Mr. Kovacic, you have misquoted

23     because you have omitted, and you always omit, the term "exceptionally,"

24     and I would suggest that you reflect on the term "exceptionally" in this

25     context before you address us tomorrow.  It seems that you are already

Page 35323

 1     repeating your arguments now.  Maybe you do that tomorrow.

 2             MR. KOVACIC: [Interpretation] Your Honour, Judge Trechsel, I'm

 3     not sure there is a misunderstanding in the interpretation, but I read it

 4     out word by word, the penultimate sentence of paragraph 3 of your own

 5     ruling of April 24th, and it reads as follows:  As I said in the previous

 6     sentence that the accused can ask questions when there are exceptional

 7     circumstances, and in this sentence you go on to explain what those

 8     exceptional circumstances are, and those are the two situations, either

 9     about events in which the accused took part personally, or has specific

10     expertise.

11             And I feel, Judge Trechsel, that you are talking about the

12     decision of June, you went a step further, where you restricted -- you

13     gave a restricted interpretation, and that decision was rescinded by the

14     Appeals Chamber decision, but I suggest that you look at the third

15     paragraph of the 24th of April decision and I'd like to repeat my

16     submission tomorrow and explain why Mr. Praljak wants to cross-examine,

17     otherwise we'll go back to where we were in June.  You're interpreting

18     your own decision in a different way.  Thank you.

19             JUDGE ANTONETTI: [Interpretation] Very well, in the timetable --

20     I'll give you the floor, Mr. Stringer -- tomorrow, five minutes for

21     Mr. Kovacic, and 15 minutes for Ms. Nozica.  Mr. Stringer, what would you

22     like to say?

23             MR. STRINGER:  Thank you, Mr. President.  Just to simply note

24     that so far the Prosecution has not taken a position or expressed a

25     position on regards to Mr. Praljak's request.  If there are going to be

Page 35324

 1     submissions tomorrow, we will be prepared to make our own submissions at

 2     that time.  We are strongly of the view that in this particular situation

 3     the applicable decision of the Trial Chamber and Appeals Chamber, which

 4     of course is still in effect, is not nearly met in respect of this

 5     witness.  And we will be prepared to make additional submissions tomorrow

 6     should the Trial Chamber wish to entertain this yet again, despite my

 7     understanding that it had in fact already ruled.  Thank you.

 8             MR. KARNAVAS:  Mr. President, if -- I just wish to inform the

 9     Trial Chamber that Mr. Cvikl is an extremely busy man.  We are very

10     grateful that he was able to come here and devote a week essentially.  He

11     will not be able to stay beyond Thursday, and it would be highly

12     inconvenient, and in fact unfair, to have to bring him back because we

13     are having these procedural disputes.  So I would ask that that be taken

14     into consideration.  If special hearings need to be held, they should be

15     convened, but Mr. Cvikl should be allowed to finish his testimony and go

16     back to his work and to the government of Slovenia who depends on him.

17             JUDGE ANTONETTI: [Interpretation] Mr. Witness, rest assured there

18     will be 15 minutes for Ms. Nozica, after which Mr. Kovacic will speak for

19     five minutes, the Chamber will take a decision.  Even if there's a

20     positive ruling, it won't take hours, and the Prosecution will have four

21     hours for the cross-examination.  So we will end Thursday and you won't

22     have to return, save events beyond our control such as a fire as happened

23     not so long ago where we had to evacuate the premises, or that the Judge

24     was struck simultaneously with a heart attack, but those are pretty

25     remote, extreme assumptions that I'm just mentioning.  So we will meet

Page 35325

 1     again tomorrow at 14.15.  Thank you.

 2                           --- Whereupon the hearing adjourned at 7:01 p.m.,

 3                           to be reconvened on Wednesday, the 14th day of

 4                           January, 2009, at 2.15 p.m.