Published in Nacional number 449, 2004-06-22
THE DARK SIDE OF SUCCESSION
Croatia to hand over Serbian villas to phantom Czech agency
Due to property seizures based on the 1991 state decree, Croatia now owes companies from the former Yugoslav republics a total of one billion euro.
By signing the Agreement on Succession of the former common states, Croatia will soon lose much more than it could ever gain, as after 14 years the property and legal relations among the former Yugoslav republics will have to resolved, including Croatia’s obligation to pay many millions in compensation for thousands of properties that were confiscated in the early 1990s, primarily from Serbian companies.
The problem Croatia is facing stems primarily from the Decree on the “ban of handling property in the territory of the Republic of Croatia,” which the government at the time passed on 17 July 1991. This decree banned all handling and liens against property in the territory of the Republic of Croatia under the ownership of institutions, republics, companies and other legal persons from Serbia, Montenegro, Bosnia Herzegovina, Macedonia and Slovenia. As a result, many properties, whose owners were companies or other legal persons from other Yugoslav republics, were declared the state ownership of the Republic of Croatia, and quickly afterwards, the Croatian Privatization Fund included them in its catalogue of property for sale. Through this fund, the state quickly sold off the majority of these properties, including the most attractive ones on the Adriatic coast, likely not considering that the war situation would not last forever and sooner or later the time would come to settle accounts among all the sides at war.
The Serbian companies did not lose hope that their property would one day be returned to them. Over the years, many of the former owners began to believe that such a turn of events could ever take place, and then the mysterious middlemen came onto the scene. As Nacional has exclusively learned, several Czech agencies seated in Prague have purchased the rights to property in Croatia from the Serbian companies for a cost several times less than the actual cost, and those companies were happy to have gotten anything out of the deal. Nacional’s foreign source confirmed that the Czech companies who bought the rights to thousands of attractive properties along the Adriatic Sea have been waiting patiently for years for the former Yugoslav republics to sign the Succession Agreement, for that Agreement to come into effect and for the courts in Croatia to sign hundreds of compensation claims seeking the return of seized property from the state, as well as compensation which in certain cases amounts to several million Euros.
The Czech agencies have also hired local people who know best which properties are valuable and interesting for buyers, and with the help of an associate of one of the Czech companies, Nacional has received insight in the past days into a long list, revealing these attractive locations on the Adriatic Sea. Over the past ten years, over two thousand properties have been sold in this way, varying by type and location. The list includes land, houses, villas, resorts, flats, commercial space and other types of property along the entire coast and on the islands, from Dubrovnik, Hvar, Makarska, Split, Zadar, Šibenik, Rijeka, Opatija, Lovran, Pula, Rovinj and Novigrad all the way to Motovun. The example on the island of Hvar best illustrates how signing the Succession Agreement will have wide-reaching financial and political implications. The citizens of Stari Grad on that island have in recent days been debating about the elderly rest home which was once the holiday resort “Rest and Relaxation for the workers of Zemun”.
On 16 August 2001, the city of Stari Grad signed a gift contract with the Croatian Privatization Fund which permitted the rest home to be opened. However, this gift contract signed by then head of the CPF Hrvoje Vojković also contained an interesting clause protecting the CPF from any possible problems in the future, and which states that the city of Stari Grad takes on all obligations towards Serbia and Montenegro which may stem from succession. Considering that all of the responsibility has been shifted to the city, the citizens already fear a potentially exaggerated compensation claim which could arrive soon, as this resort is valued at about 2 million euro. A payment this size could through the city into bankruptcy.
One of the greatest problems with the Serbian claims in Croatia is the embarrassing fact that there is absolutely no one in Croatia responsible for this issue, as though it did not exist. As such, it is impossible to find a state representative who is adequately informed in this issue which could cost Croatia up to a billion euro, not to mention the lack of preparation or response. This lack of a position by the Croatian authorities is even more surprising considering the fact that Croatian companies have claims on seized property in Serbia, and therefore it should be of interest for our country to take action on this issue. However, those companies who once had their branch offices and other property in Serbia have been left to their own devices in the battle to get their property back, and many of them have lost all hope that their property in Serbia will ever be returned.
Some companies, such as Croatia Insurance and Dunav Insurance have succeeded in exchanging commercial space, which in this state of complete hopelessness many consider to be exceptional success. Other companies have already come to terms with the fact that they will never get their property in the other Yugoslav republics back. However, on both sides of the border, businessmen stress that the entire situation could be resolved soon, but only after the governments of Croatia and Serbia come to an agreement of the legal framework on how to return the property. To date though, not a single government representative has made any efforts to come to a quick resolution of the situation. Bozo Marendić, the head of the government office for succession, sent a request to Premier Sanader several months ago that he be removed from the post, however, the government did not do so, nor did it offer to resolve the situation in which only two people in the government are responsible for the entire issue of succession – Marendić and one expert associate.
PROPERTY OWNED BY NEIGHBOURING COUNTRIES
It has been estimated that there is a total of about 200 properties in the Dubrovnik-Neretva County, particularly in the area surrounding Dubrovnik, on the island of Korcula and the Pelješac peninsula that were once or are still under the ownership of Bosnia Herzegovina, Serbia and Montenegro and Macedonia. Ownership over a certain number of villas and resorts has not changed hands. However, a large number of attractive properties along the coast have become state property, registered to the Republic of Croatia.
EXAMPLE: VILLA AURORA
Villa Aurora is situated on the seaside in Trsteno, some 30 kilometres west of Dubrovnik, only 200 metres from the 500 year old Arboretum, a natural tree reserve where trees from all over the world have been planted. The villa was registered in 1981 as the property of the Socialist Republic of Bosnia Herzegovina in the land registry in the Dubrovnik Municipal Court since 1981, with the right of use registered to the Executive Council of the Assembly of the then socialist republic. The true heir and owner of Aurora, which was build as a country house in 1906 by the Dubrovnik noble Vito Basegli-Gozze for his family and guests, is today the BiH Council of Ministers or the BiH government. In recent weeks, this villa has come into the public eye, as the American actor of Croatian descent, John Malkovich submitted his offer to both the Finance Ministry and the BiH Council of Ministers to buy, renovate and restore the exclusive villa in Trsteno. Though the property is located in the property of Croatia, ownership of this villa was never contested and it was never included in the catalogue of state properties offered for sale by the CPF. In as much the actor sent his offer to the right address.
Malkovich, whose ancestors left Croatia for the US in the 19th century, visited the Adriatic Sea on his yacht for the first time in summer 2003. He was thrilled by the Croatian coast, and in particular with Trsteno. Malkovich was delighted by the peace and quiet available in Trsteno, the feeling of freedom and distance from the paparazzi offered by Aurora on its 2000 square metres of land, its private hidden beach and the view the villa offers of the islands of Lopud and Šipan. Aurora is a complex made up of the central family villa and four country houses for guests and servants, and was once the summer residence for the BiH communist officials. From 1907 to date, the villa has changed owners several times. It was bought from Vito Baseglia-Gozze by Niko Nardelli, and in 1924, it was registered as the property of wealth Milorad Dimitrijević. In 1955, the communist government confiscated Dimitrijević’s property on a ruling by the Kotar court in Dubrovnik and the villa began the property of the general public and put under the management of the Dubrovnik municipality. One year later, the Dubrovnik municipality gave the villa to the Executive Council of NR BiH in Sarajevo. In February 1971, the Supreme Court of the Republic of Croatia transferred the right of registration and use of the villa to the company ‘Vis’, climatic health resort Dubrovnik. Ten years later, the hotel company ‘Vis’ accepted the contract on the voluntary execution of the ruling by the County Commercial Court in Sarajevo from 1976 which transferred the ownership and right of use of the villa onto SR BiH and its Executive Council. The Aurora was the subject of an inter-republic lawsuit.
In the Patriotic War, the Aurora, a protected cultural monument, was devastated and plundered in the aggression by the Yugoslav army in the Dubrovnik area. Nor were the HV soldiers, staying in the villa as a base for the liberation operations, very gentle. The walls still show graffiti written in the war years. The Aurora has been falling apart for years, as BiH does not have the money to bring it back to its former glory. John Malkovich, the 52 year old actor who lives in France, wants to turn the Aurora into an exclusive Adriatic residence and return its old shine. Croatian and foreign agencies have estimated that the Aurora is worth 3 million pounds or about 4.5 million Euro. Malkovich did not state the amount he is willing to pay for the villa. However, he has still not received any response from Sarajevo. The BiH Council of Ministers has considered the neglected state of the villa, Malkovich’s interest and the fact that the BiH budget lacks the resources for the repairs and restoration of Villa Aurora. The decision on whether or not to sell the villa is expected to come before the BiH parliament soon.
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