Trading Deals of the RS Commodity Reserves

Corruption

AIM Banja Luka, November 12, 2001

Recently, the Republican Public Prosecutor's Office received instructions to investigate, together with the Ministry of the Interior (MUP) of the Republic of Srpska (RS), 31 cases of corruption, pointed to by the Anti-Corruption Team of the Office of High Representative for B&H (OHR) and the RS Chief Auditor. First on the list is the Republican Directorate for Commodity Reserves and its business operations over the last three years.

After two indictments have been issued against former Director of Commodity Reserves Marko Nozica, the public interest in the work of this republican institution increased. The first indictment charged Nozica and the current Deputy Foreign Trade Minister in the Ministerial Council of B&H, Nikola Kragulj of having committed the abuse of office and authority. Nozica was charged for having caused DM 2.1 million worth damages to the RS during 1998 and, together with Kragulj, additional damages to the state in the value of DM 2.2 million. According to the second indictment by abusing his office Nozica, together with Dusan Ilic (Director of a social enterprise from Bijeljina "IGM Drina") and Nedjo Djokic (Director of the enterprise "Nelting" also from Bijeljina) helped the then deputy of the Serbian National Alliance to the National Assembly of the RS, Milica Markovic-Elez to acquire a flat of 116 sqm in Bijeljina. The Basic Public Prosecutor's Office in Banja Luka also ordered investigation against Nozica because it had grounds to believe that he had committed a crime of the abuse of office, which is punishable by up to 3 years in prison.

The present Director of the Commodity Reserves, Tanasije Jovic, told us that when he had assumed his duty six months earlier all gyro-account were blocked and the financial police and MUP inspectors were investigating its operations for economic crimes. According to him, out of 193 storehouses owned by the Directorate, only 23 were registered and their inventories taken, while 56 were registered but without taken inventory and 114 were not even registered (with some DM 4.5 million worth goods). "After the additional stock-taking carried out this April and drafting of the annual financial report for 2000, which was submitted in late April, we found out that the total deficit in the mentioned storehouses amounted to KM 9.5 million, which is 51 percent of the actual stocks" said Jovic.

Inspectors of the Financial Police, Pero Lazic and Mile Ostojic investigated financial operations of the Directorate for Commodity Reserves even three times - in 1998, 200 and again in 2001. The result: On account of unpaid taxes and other dues, the Directorate for Commodity Reserves damaged the RS for some DM 104 million. "During the period under control, the Directorate for Commodity Reserves engaged in wholesale trade although it was not registered for that activity with the competent court", said Lazic. The Directorate mostly did business with enterprises from the B&H Federation. Judging by papers and discovered documents, the most dubious deals were concluded with a private Sarajevo firm "Itermarket" and Alija Delimustafic, a businessman whom law enforcement authorities of the B&H Federation suspect of various fraudulent activities. "Itermarket" got from the Directorate for Commodity Reserves goods in the value of DM 1.2 million, which were never paid for. According to inspector Lazic, new control carried out in 2001 revealed that, apart from not paying this sum, "Itermarket" transferred this debt through papers and by other transactions to a firm "Svel" from Sarajevo.

The Financial Police also controlled the sale and delivery of oil and its derivatives from the Republican commodity reserves. After checking several users to which the oil should have been delivered, the police determined that it never reached its destination. There are many such examples. Investigation of its business transactions with the Commune of Novi Grad, revealed that 3 oil shipments, in the total value of KM 60,900 had never been registered in the communal accounting records. Similar was the case with the Commune of Laktasi: oil worth KM 28,200 was never entered in its books. Examination of the documents of the "Heating Plant" in Gradiska also showed that it never received 30,000 litres of diesel oil.

Commodity Reserves also appeared as a seller of oil on the market of B&H Federation. This turnover was registered on the basis of invoices issued for buyers that did not exist at given addresses. "We found this out in cooperation with the Federation Tax Service, which informed us that buyers such as "Beton Sarajevo", Braca Pehlic" and "Videni" from Velika Kladusa were not registered on the Federation's territory", explained Lazic. Director of Commodity Reserves Jovic said that the Directorate realised KM 11.893 million worth turnover of oil derivatives with a fictitious firm "Beton Sarajevo". Taxes were never paid because the firm was non-existent and the RS budget suffered damages in the value of KM 2.646 million.

Judging by inspectors' findings, the Directorate also sold various cigarettes that had been confiscated in customs or some other proceedings, but at much lower prices so that it damaged the budget for another KM 3,6 million. Proceeds from this sale should have been channelled to the financing of the closing down of reception centres in RS, but Jovic claimed that out of the total amount only DM 1.9 million or 31 percent had been paid and that the remainder never reached its destination.

Frozen chicken and beef were also on the list of numerous illegal dealings of the Directorate for Commodity Reserves. Commodity Reserves procured meat (without paying import taxes) under a pretext that the imported chicken meat and beef would be used for the replenishment of reserves. According to the findings of the Financial Police, the Directorate did not use the imported meat for these purposes but sold them in transit to various buyers from the Federation and thus (on account of unpaid taxes) damaged the RS budget for additional KM 814 thousand.

Former Director Mirko Nozica still claims that he is innocent. As instructed by his attorney, he refused to say anything to the press. He spoke of his deals only once when he said that at the beginning it had been his wish to keep the Directorate's operation within the legally prescribed limits, but that he changed his mind when he saw "the conditions under which we are forced to live and work". According to him the Directorate was just one lever of Milorad Dodik's Government for implementing the economic policy.

The inspectors have announced that the auditing of Directorate's business operations would last till the end of the year. The present management admitted that this state institution has been operating unlawfully ever since its foundation in 1992. No one is able nor wishes to precisely determine the scope of these dealings. It will be good if the new authorities do not continue with this practice.

Sanela Zivkovic

(AIM)