GORVERNMENT OF THE FEDERATION "COVERNING UP" SMUGGLING

Illegal Dealings of "Moonlight Company"

AIM Sarajevo, 8 November, 1997

Due to certain doubts which had appeared concerning illegal business dealings of Sarajevo Moonlight Company, Bihac Branch Office, the Government of B&H Federation demanded financial auditing in August. It was carried out, and financial police submitted its findings a month ago to members of the government of B&H Federation. Of course, the public had known nothing about the findings until the CAFAO commission started to unravel the tangle of illegal use of the money from the budget and smuggling. It is interesting that although the findings of the financial police determined large tax evasion, the mentioned findings have never reached CAFAO commission and their report. That is how the document appeared in public which testifies that financial police, based on auditing of business dealings of the consignment warehouse and customs office of the mentioned company in Bihac determined tax evasion amounting to 35,028,185.20 German marks out of which the main debt is 28,746,838.10 German marks, and the rest is interest.

The Moonlight Company lodged a complaint against these findings which was rejected in full by the decision of the financial police, department in Sarajevo.

It was established by auditing that, in delivery of high-tariff commodities in the customs duty free shop at road border crossing Izacic, this company failed to charge or pay the special tax on tobacco products, special tax on alcohol bevarages, beer, and non-alcoholic beverages. That is why the special tax was calculated to amount to 24,893.00 marks for tobacco, 33,193.40 marks for alcoholic beverages, 4,317.20 marks for beer, and 304.10 German marks for non-alcoholic beverages. The charged interest for that was 5,194,505.80 German marks.

By an insight in the books, it was established that from the beginning of operation of the company on 16 August, 1996 till the beginning of auditing on 12 August, 1997, the company purchased-imported 17,467,500 packages of various cigarettes, but after inspection 3,430,700 pachages were found. In other words, 14,036,800 pachages were sold wiithout prescribed surveillance labels.

By control of documantation, it was established that Moonlight Company signed a contract on consignment with "Semerkand gida ithalat ihracet ve ticaret limited cirketi" from Mersin, Turkey. However, it was revealed that the commodities were purchased from other foreign suppliers (B.A.T. from Hamburg, Depaul from Cyprus, Tobacna from Ljubljana) with which it had no contracts on consignment warehouses.

By auditing it was also determined that the company deposited on the account opened with the accountancy service of B&H Federation the total of 8,920,556.00 German marks, and in the beginning of work, on its account opened with the Universal Bank, Bihac branch office, it had deposited 484,930.63 German marks in cash. The turn-over which was not deposited, at prices from the customs duty free shop amounts to 5,854,285.00 German marks. It was also determined that payments abroad were made through Universal and Promdei banks in Bihac, but not to actual suppliers. They were paid to Semerkand which issued invoices without foundation at higher prices from the invoice prices of the actual foreign suppliers. It was also determined that Semerkand had issued invoices for commodities in the warehouse, and not only for those which were sold, and on account of that, by 30 June, 1997, it issued invoices for the total ammount of 9,227,929.20 German marks. Until the beginning of auditing, according to the invoices and orders of Semerkand, through commerical banks, payments amounting to the total of 9,162,311.30 German marks were made in favour of Semerkand in Mersina, that is, its account opened in Turkey Vakif Bank, Allied Business Bank in Beirut, Dresden Bank in Hamburg, Nova Ljubljanska banka in Ljubljana and Schweizerische Bank Gesellschaft, Bellevue Zurich branch ofice, in the name of Mello Trading Company.

    From the beginning of work of the consignment

warehouse in Bihac, as well as from the beginning of work of the customs duty free shop in Izacic, the company has not kept records as prescribed by law, so due to a lack of evidence that the mentioned goods were sold in the duty free shop, customs duty and other importing dues were charged, as well as the sales tax for tobacco, based on sold products at prices presented in balance sheet.

The audit also determined that the company employed between 8 and 18 workers, out of whom only Nedzad Camo, employed in Sarajevo, was registered at the pension and disability insurance fund and all the obligations for his salary of only 85.00 marks were met. No worker has been registered in Bihac.

Based on the findings of the financial police, the mentioned consignment warehouses and the duty free shop have been temporarily closed.

Mirjana Micevska

(AIM, Sarajevo)