On the 29th of June, 20 years will have passed since the signing of the Agreement on Succession Issues of the former Socialist Federal Republic of Yugoslavia – SFRY. How many payments did the Succession Fund of the Republic of Slovenia make as part of the framework of implementing the judgment of the European Court of Human Rights in the Ališić case from 2014, and what was the total value of the payments? In the time period from the judgment to the 31st of May, 2021, the Fund paid out 301,872,062.00 euros to the savers, of which around 165 million euros went to the savers of Ljubljanska banka d. d. bank, the Zagreb Main Branch, and around 136 million euros went to savers of Ljubljanska banka d. d. bank, the Sarajevo Main Branch. Out of 38769 claims, the Fund resolved 38564 cases in the given time period. It is true that we are diligently enforcing what the European Court of Human Rights ordered us to do – but the fact that Slovenians will pay 301 million euros in total to foreigners, without a constitutional basis for it, is not something to brag about.
According to the Constitution, Slovenia is obliged to respect international treaties, but it should be pointed out that the Vienna Agreement on Succession of States clearly states how the issue of foreign currency savers in the former Yugoslavia will be resolved. In principle, this question has not yet been resolved. On the other hand, in recent years, Slovenia has not been able to ensure the principle of territoriality before the courts and has not been able to prove that it has not benefited from these savings. Because of this, we have now reached the amount of more than 300 million euros that Slovenian citizens have to pay – and they can only wonder why they should pay these amounts to foreigners, given that Slovenia had nothing to do with the whole thing. The constitutional basis for this states that the monetary and financial systems are separate and should be dealt with in the way that is presented in the Vienna Agreement – which did not happen. The opinion of the legal expert is that things were set up in a satisfactory manner before the year 2008, but then the right arguments were not presented, and things started to turn for the worse. It is inconceivable that Slovenia has to pay foreign citizens who had their savings in the banks of other countries Slovenian money. But of course, it is also a fact that Slovenia is obliged to respect the judgments of the courts.
Similar cases happened in other countries as well, but it is interesting that Croatia did not have any problems with the Serbian Jugobanka bank, and for the Ljubljanska banka bank, there was obviously a different regime. For a better understanding of the whole situation, we should also clarify that Ljubljanska banka, in the case of the main branch in Zagreb, operated in accordance with Croatian legislation on Croatian territory and was also monitored by the Croatian National Bank (if we leave the case of the Bosnian branch on the side for a second and solely focus on the Croatian branch). It was also the Croatian National Bank that then closed the account – which caused a problem, as Ljubljanska banka, with its main branch in Zagreb, was then unable to pay out the savers. In fact, that is how the whole story even began. The normal outcome of the story would have been for the bank in which the savers invested money to be indebted – and this was a bank in Zagreb, not in Ljubljana, and it was also a bank that placed money in Croatian companies, not Slovenian ones. Of course, the savers have the right to their money – but it should be borne in mind that it all happened in Croatia – Ljubljanska banka, with its main branch in Zagreb, received foreign currency deposits from Croatian savers. In the territory of the Republic of Croatia, under the legal – both monetary and financial sovereignty of the Republic of Croatia, and under the control of the Croatian legal authorities, it lent this money to Croatian companies, which then refused to return the money, while Croatia also did everything in its power to make sure that that does not happen. Of course, it would be easiest for the bank to simply repay its customers – a bank that does not repay its customers has an extremely bad reputation, so no bank is interesting in operating in that manner. However, Ljubljanska banka was not allowed to collect debts from the Croatian companies, and then its account was closed. Today, many of these debts have been repaid, but they have been repaid from the wrong funds, the lawyer pointed out.
During the break-up of the SFRY in 1991 and 1992, the foreign currency deposits of the complainants and many other savers remained frozen, as the successor states of the SFRY took over the guarantee for the foreign currency deposits in the former common state in various ways. Slovenia used the territorial principle, i.e., it took over the guarantee for the “old” foreign currency deposits in all banks and branches of the banks in its territory, regardless of the bank’s registered office and the citizenship of the individual saver. This method seemed most appropriate, as it was in line with the practice of the International Monetary Fund and the World Bank in the division of assets and responsibility for the repayment of loans of the former common state, they wrote on the website of the Republic of Slovenia. However, as the successor states regulated the takeover of the SFRY guarantees differently, they took the position in the Agreement on Succession Issues that “guarantees of the SFRY or the National Bank of Yugoslavia for saving deposits” were defined as a succession issue. This position was also confirmed by the European Court of Human Rights – ECHR, which then called on the successors to continue the succession negotiations under an expedited procedure. In the case of Ališić and others /…/, the ECHR also finds that this is a question of succession but believes that it is not the task of the court to resolves. Instead, it decides that Slovenia and Serbia have violated the plaintiffs’ right to protection of property and the right to effective legal funds. Slovenia does not agree with the verdict, as it imposes disproportionate financial burdens on it compared to other successor states to the former SFRY, but it respects the court’s decision and therefore, it is correctly eliminating the violation of the human rights of savers.
In 2014, as a verdict in the Ališić case, the ECHR ordered Slovenia and Serbia to provide savers with the repayment of the old foreign currency deposits from Ljubljanska banka’s branches in Sarajevo and Zagreb. The court did not take into account that Slovenia had already assumed obligations for foreign currency deposits on its territory, according to the territorial principle, after the disintegration of the former common state – regardless of the citizenship of savers and regardless of the bank’s registered office – and that it expected the same from the other successor states. Although Slovenia does not agree with the judgment in the Ališić case, it is consistently fulfilling the obligations imposed on it by the court, Delo reported. While some emphasised that Slovenia had received the worse part of the deal, compared to the other countries of the former SFRY, and that the ECHR also assessed it more strictly, Slovenian politics emphasised that it respected the court’s rulings, even if it did not agree with them. Losing the case at the ECHR was also a problem because the bank was losing an important market because of it. Namely, it was banned from operating in some countries in the former Yugoslavia for quite some time because of it. And due to the incompetence of our politics and our virtuous lawyers, it lost a significant market share practically overnight, while at the same time, it was also tasked with repaying the foreign savers.
In 2015, the National Assembly adopted the Act Regulating the Enforcement of the European Court of Human Rights Judgment in Case No. 60642/08
With this, Slovenia established the legal basis for the verification and payment of unpaid old foreign currency deposits to the savers of the Sarajevo and Zagreb branched of Ljubljanska banka in a timely manner, i.e., within the deadline set by the ECHR. The Succession Fund of the Republic of Slovenia (hereinafter the Fund) is a public financial fund established for the purpose of implementing the Agreement on Succession Issues and, in connection to it, also for exercising the rights and settling obligations of the Republic of Slovenia in the division of property, rights and obligations of the former SFRY. Regarding the implementation of the Act Regulating the Enforcement of the European Court of Human Rights Judgment in Case No. 60642/08, the Fund can decide on taking over the fulfilment of an individual unpaid old foreign currency deposit in the verification procedure. The requests for verification were submitted in writing from the 1st of December 2015 to the 31st of December 2017.
In the period up to the 31st of May 2021, the Fund processed 38,769 claims. Of this, it received 20134 claims from the savers of Ljubljanska banka d. d. bank, the Zagreb Main Branch, and around 18635 claims from the savers of Ljubljanska banka d. d. bank, the Sarajevo Main Branch. Out of 38769 claims, the Fund resolved 38564 cases in the given time period. 205 cases remain pending for various reasons, from the unresolved probate hearing to the standstill claim due to the death of the beneficiary. And of these, 78 cases are pending before the Slovenian courts. In the given period, the Fund paid out 301,872,062.00 euros to the savers, of which around 165 million euros went to the savers of Ljubljanska banka d. d. bank, the Zagreb Main Branch, and around 136 million euros went to savers of Ljubljanska banka d. d. bank, the Sarajevo Main Branch.
The lawsuit against Croatia was filed when Miro Cerar was the Prime Minister
It should also be mentioned that in September 2016, Slovenia filed an interstate lawsuit against Croatia regarding the outstanding claims of Ljubljanska banka against Croatian companies because the Croatian judiciary and executive authorities unlawfully deprived Ljubljanska banka of its assets and a fair trial. With this lawsuit at the ECHR, Slovenia demanded legal satisfaction because Croatia was preventing Ljubljanska banka from recovering the unpaid receivables from Croatian companies through regular court proceedings for the last quarter of a century, the Finance newspaper reported. Slovenia also demanded 429.5 million euros in compensation. But then, in 2020, the Grand Chamber of the European Court of Human Rights ruled that the convention did not allow governments to use the inter-state redress mechanism. In the last decade, the Republic of Slovenia has lost case after case before the international courts and arbitrations. According to the legal expert we spoke to, the reason for this was an unfortunate series of filing poorly crafted lawsuits, which were perhaps even filed at the wrong time. Some also advised against going into these procedures, but once they are completed, we are obliged to respect the decisions of the court. However, in some respects, in accordance with the Succession Agreement, certain negotiations are still possible, and it is essential that the two countries discuss this.
Sara Bertoncelj
