Yugoslavia Does Not Agree to the Tactics of Plucking

Namely, during all these years of discussion on succession, first within the Conference on Yugoslavia (canceled at the beginning of 1995) and currently under the patronage of Carl Built - SRY, Slovenia, Croatia, BIH and Macedonia have not reached the agreement on what should be divided, much less on how it should be divided. Academician Kosta Mihajlovic, who has been the chairmen of Yugoslav delegation from the very beginning of negotiations on succession, presents the Yugoslav view on the problem.

Vreme: Yugoslavia wants to redefine the term "state property". What does that mean and what would Yugoslavia gain by it?

Mihajlovic: The state property in its usual meaning existed in SFRY until 1953. From that time on we have had, along with the private and collective property, social property (ownership). This means that state property has vanished, so it has not really to be redefined, but defined. This means that out of the pretty vague understanding of the term "social property" - which is basically the conglomerate of ownership since it includes the property of companies, communities, public organizations and whatever has been created using joint assets - we have to extract the essence which can, beyond any doubt, be understood as the state property as the only subject of distribution. This includes the assets collected through enforcement and used for investment into industrial and non-industrial objects and other activities. Simply said, those are the assets from the Federal Budget, the Central Investment Fund, the Fund for Investments into the Underdeveloped Areas and other centralized funds.

The Yugoslav draft of the agreement includes 9000 items. When the part which was financed from joint funds is extracted from each item and identified as the state property, then it will be possible to evaluate the state property in the proper manner. It is not possible to evaluate physical objects in that way, no matter whether it is attempted to be calculated on the basis of purchasing or market prices. Those represent public (social) property that can not entirely be evaluated without encompassing the belonging part financed from the funds of companies, communities and other resources that could not be considered as state property.

Is such accurate calculation possible?

It is. Yugoslavia was the country of bureaucracy and as such it kept its documentation. Each item of the inventory is based on the original documentation and accurate data not only on the financing from the central funds but on the precise central fund it came from.

What happened with the Yugoslav draft?

This understanding of the term state property was elaborated in the Yugoslav draft of the agreement proposal handed to the Secretariat of the Group for Succession within the Conference on Yugoslavia at the beginning of 1994. The proposal has never been discussed, although the decision on discussion existed.

What were the proposals of other participants in negotiations?

The Secretariat of the Group for Succession took the property managed by the federal bodies as the state property. The definition of "federal property" is not known to the jurisprudence, and no management of a property may be defined as owner. Sticking to such understanding of the term "state property" was justified by the claim that the total to be divided has already been determined by the Constitution from 1974, since one part of the federal property was transferred to the ownership of republics. Of course, the transfer of the right to manage the property could not mean the transfer of ownership, and it could by no means be named the division balance. The true sense of insistence on the federal property is in the fact that the republics that became independent understood that everything that is on their territory is beyond doubt theirs, and that everything that should be divided is on the territory of SRY.

Without the clear definition of the "state property", the inventory is based on a subjunctive, impressionistic basis. Each party could simply state what it considered as state property to enter the inventory, and also dispute the proposals of all other parties. The inventory could never be consolidated that way. Another major drawback of such inventory is the omission of enormous industrial investments now situated on the territories of the four independent republics. Thus, the Yugoslav interest stemming from the properly understood term "state property" is exactly in the claim that the state property is on the territory of the entire former SFRY, not only on the territory of SRY. This clearly points to the direction of what and how should be divided.

Speaking in figures, "federal property" should include financial claims and liabilities, property abroad and army property which forms more than 70% of the total property in their inventory. Total property in their inventory reaches the value of around $100 billion. The Yugoslav proposal states that the value reaches $200 billion, or double the sum.

What does SRY propose about the division of the property of the former Yugoslav National Army, which is the most valuable item of the former state’s property? How were the arms divided? What are the proposals of other successors?

When you mention the army property as the most valuable item of the inventory, you surely have in mind the inventory of the state property as defined by the four independent republics. In that inventory of approximately $100 billion, over $70 billion is the army property. However, its value has been overestimated in an absolute and relative sense. In an absolute sense because the auditing house that did the estimation made an unbelievable error in adding amounts to about $16 billion. If the figure of $9 billion, which emerged due to the erroneous methodological assumption that the values of movables and immovables of an object are equal is added to this, than the army property should on both basis be lessened by $25 billion. The estimated value should further be lessened due to the overestimation of certain elements of army property and technologically obsolete weapons. However, the share of army property in the inventory of the four new states is considerable, because the inventories do not include investments made in industry and other expenditures from the federal budget and other centralized funds, and the Yugoslav proposal does.

Nevertheless, it seems that the evaluation of the army property has become pointless in the meantime. Namely, the decisions of the international community determined the scope and type of the armament that SRY and the new states may have. The amount of these individual armaments is less than the one SFRY had, which means that the surplus of the armament has to be destroyed.

Could you describe the atmosphere on the meetings of the delegations? Were there emotions and accusations involved and was the used calculation accurate?

To describe an obscure atmosphere of the meetings, strongly influenced by the war and the interlaced unsolved political issues requires literary talent which I lack. Some of the present delegations did not succeed to restrain emotions, had disorderly conduct and applied political provocation and unbased accusations against SRY. The Yugoslav party has to react to the accusations that it was the aggressor. In the event of serious provocation, it even had to withdraw from the meetings. The Yugoslav delegation only reacted to the provocation, and was never the one to start the assault and can not consider itself a contributor to the distant relations with other delegations colored by lack of communication, apart for the official communication at the meetings.

The chairman reacted to the mingling of the political questions, but too mildly, not cutting the attempts at the root. Counting on the sympathies of the international community, delegations of some independent republics considered the provocation permissible, maybe even desirable. This is maybe the second reason, and the third, probably the most important one, was the absence of real negotiations.

To your question as to whether the calculation was accurate, the answer is negative. Each party had a global estimation of whether this or that issue corresponds with their interests. The Yugoslav proposal went the furthest in its offer of rich and precisely done documentation on state property included in the inventory.

Mr. Vots insists on the agreement about the division of the state property between the delegations of the countries from the territory of former Yugoslavia. If such agreement is not reached this time again, what may happen? Is the delegation of SRY considering possible international arbitration or bringing the issue to court?

I could give the simple answer that if the negotiations do not result in agreement, the interested parties will have to agree on how to solve the situation. Understandably, arbitration imposes itself as realistic, if not the only solution.

However, it is useful to hope that it will not happen. It is interesting that all interested parties voiced against arbitration at its first suggestion. Everyone abhors the arbitration, and with reason. First of all, due to the fear about the way the arbitration might understand and interpret the SFRY’s reality which is extremely complicated for the foreigners, and yet is the only relevant factor in searching for a solution. Some participants in the dispute see their interest in completely clarifying that reality and drawing an appropriate decision from it, while the others would prefer that such clarification never happens in order to bring the decision based on an erroneous factual state which would satisfy their unbased aspirations.

What is the actual meaning of the SRY’s attitude that the question of the division of the state property must be viewed separately from the questions of political and jurisdictional continuity? How would the eventual recognition of the political continuity of SRY with SFRY reflect on the economic succession?

As the precedent country that other republics departed from, SRY extends the political and jurisdictional continuity of SFRY on the shrunken territory, which differs from the four mentioned former republics that gained international recognition later as newly established states. Having in mind the course of events and the legal status resulting from it, SR Yugoslavia insists rightfully upon political and jurisdictional continuity. In the international law and economic practice it means that the precedent country has the right on the entire movables and immovables in the country and abroad, as well as on the claims and liabilities. The precedent country may set aside part of the property for the seceded countries, which is the matter of negotiations or additional agreement. Privileged economic status of the precedent country is certainly one of the reasons that the states that gained independence disputed the political continuity of SRY, accusing it of wanting to gain the entire state property of SFRY.

What is the attitude of the Yugoslav Commission to the problem of private property of the current citizens of SRY that remained in former Yugoslav republics, especially Croatia?

This Commission is concerned exclusively with the state property which is the only issue of the economic calculation. The issue of the private property of the present citizens of SRY which remained in the former Yugoslav republics is in charge of the special commission. I would like to mention that private property is protected by the law everywhere as inviolable and that there is a general agreement on its compensation if it is destroyed or taken away.

What is the attitude of the Yugoslav delegation towards the various ownership forms - and property - from the previous developmental phases of Yugoslavia (the Kingdom of SHS, the Kingdom of Yugoslavia)?

The state property from all developmental phases of Yugoslavia is the issue that the Yugoslav delegation works on. It was always about the identification of that property and about its evaluation on the basis of principles that everything financed from the mutual resources must be the issue of mutual settlement. However, the identification encounters various difficulties in various phases, so the impression might be that the attitude towards the state property is not consistent. Applying this principle is the easiest way to identify the property (property abroad, gold) of Serbia and Montenegro which they brought to Yugoslavia as independent states and to exclude it from division.

The exception is gold because there is evidence about its ownership. Part of the gold was brought into Yugoslavia by Serbia. Between the two wars, part of the gold was produced on the territory of Serbia and bought out from the National Bank which was, at that time, the stockholding company in which Serbia held 83% of the shares. There is also part of the gold robbed by the ustasi during the Second World War that has never been returned to the country.

In the periods of peace between the wars the state property was clearly distinguished from the other ownership forms. There has never been the slightest doubt about the form of the ownership. The problem was how to record and evaluate the state property after the period of several decades for which there is no data. After the Second World War the difficulties about identification did not appear due to the lack of data, but due to the necessity to define the term "state property" that is to be evaluated. The problem was even more difficult because it was the period of creation of enormous property on a collective basis, from which it was necessary to separate and identify the state property.

The impression is that all other former Yugoslav republics are in a hurry to divide the SFRY’s property, especially Slovenia, while SRY is in no hurry. Why?

It is true that the newly established states are in a hurry to divide the solvent property, gold, foreign currency on the accounts of foreign banks, debts and claims, especially Slovenia. The attempts to realize partial division, in spite of the agreements that the entire property will be divided in one package, have started in 1992. The Yugoslav delegation has opposed principally and concretely to this partial division with the argument that if this request for division of the mentioned part of the property is satisfied, where the newly established states have positive balance, they will no longer be interested for the division of the rest of the property where they have negative balance.

The rejection of the "step by step" tactics by the SRY, the rejection of plucking the parts of the property through the partial agreements and court disputes while expecting that the international community will put pressure on SR Yugoslavia to accept the proposal of the agreement that is counterproductive to it, or that the changed regime or the structure of the Yugoslav delegation will do it of its own free will, is used as the argument in favor of the well-known thesis of the Croatian delegation that the Yugoslav party is the one which does not want the agreement and that it has to be forced to do so. Thus, the real question is who wants and who does not want the agreement through negotiations. The delegation of SR Yugoslavia did everything possible to reach the agreement in the shortest possible period of time.