Slovenia & Croatia – Officials of Croatia and Slovenia initial an MOU on disposition of depositors’ accounts at defunct Ljubljanska Banka

On 7 March the Foreign Minister of Croatia, Vesna Pusić, and the Secretary of State of Slovenia, Tone Kajzer, initialed in Zagreb a memorandum of understanding aimed at resolving the two countries’ dispute regarding savings deposits in now-defunct Ljubljanska Banka.

As discussed in this column on 26 January, the dispute has seen Croatia attempting to obtain compensation for former Croatian depositors in the bank – which was headquartered in Yugoslavia's Socialist Republic of Slovenia – and Slovenia in return threatening to withhold its ratification of Croatia’s entry into the EU, which is supposed to take place on 1 July 2013.

The memorandum, written in English, stipulates that the Croatian government will put on hold lawsuits by Croatian parties regarding Ljubljanska Banka deposits, while for its part the Slovenian government will expedite ratification of Croatia’s EU accession in Slovenia’s National Assembly.  (Slovenia is the only EU member state that so far has not initiated a ratification process for Croatia’s EU accession.)  The drafting of the memorandum was finalized on 6 February in the Slovenian town of Otočec ob Krki between Ms. Pusić and Slovenian Foreign Minister Karl Erjavec with the assistance of financial experts Dr. France Arhar (Slovenia) and Zdravko Rogič (Croatia). 

Kajzer and Pusić initialing MOU in Zagreb

On 7 March the Prime Minister of Croatia, Zoran Milanović, announced that he would sign the memorandum on March 11 in Slovenia, when he is due to meet with his Slovenian counterpart, Janez Janša.  Janša, for his part, on 7 March stated that he expected that the entire ratification process would require about a month, and confirmed that he would be signing the memorandum when he meets with Milanović on 11 March in the town of Mokrice.

Below is the full text of the memorandum as published by Slovenia’s Ministry of Foreign Affairs (Ministrstvo za zunanje zadeve):

Memorandum of Understanding

between

the Government of the Republic of Slovenia

and

the Government of the Republic of Croatia

The Government of the Republic of Slovenia and the Government of the Republic of Croatia agree that the settlement for the transferred foreign currency savings of the Ljubljanska banka in Croatia will be found on the basis of the Agreement on Succession Issues (Annex C).

The Government of the Republic of Slovenia and the Government of the Republic of Croatia are determined to find a comprehensive solution for this issue as soon as possible. To this end, they will actively proceed with the continuation of negotiations under the auspices of the BIS in line with the Agreement on Succession Issues. 

Pursuant to this MOU, and pending the resolution of this issue pursuant to paragraph 2 of this MOU, the Government of the Republic of Croatia will ensure the stay of all judicial proceedings initiated by two Croatian banks (ZaBa and PBZ) related to the transferred foreign currency savings. The Government of the Republic of Slovenia will ensure that LJB as the defendant in these proceedings agree to stay as well.

In addition, the Government of the Republic of Croatia shall ensure that with a view to resolving the above issue, no new judicial or other proceedings are initiated with regard to the issue defined in the first paragraph of this Agreement.

The Government of the Republic of Slovenia undertakes to immediately initiate in the National Assembly the procedure for the ratification of the Treaty on the Accession of the Republic of Croatia to the EU with a view to complete the ratification process as soon as possible after the signature of this MOU.

This MOU shall enter into force on the day of receipt of the last notification through the diplomatic channels by which the Parties notify each other of the fulfilment of their respective internal procedures.

Signed at _____________on _________________ in duplicate in the English language.

For the Government of the

Republic of Slovenia

For the Government of the

Republic of Croatia

Sources:

Announcement by Slovenian Foreign Ministry: Memorandum med Vlado Republike Slovenije in Vlado Republike Hrvaške glede problematike LB na Hrvaškem (2013-03-07)

Announcement by Croatian Foreign Ministry: Pusić i Kajzer parafirali Memorandum o suglasnosti (2013-03-07)

Original text of memorandum: Memorandum of Understanding between the Government of the Republic of Slovenia and the Government of the Republic of Croatia

News article: Ljubljanska banka više nije prepreka, ratifikacija može početi! (2013-03-07 09:54)

News article: Memorandum: Sudski sporovi u mirovanje, ratifikacije kreće (2013-03-07 10:51)

News article: Janša: Ratifikacija gotova za najviše 30-ak dana (2013-03-07 13:59)

Video of the signing: Pusić i Kajzer parafirali Memorandum o suglasnosti (2013-03-07)

Mark Pleas

Eastern Europe Banking & Deposits Consultant

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