Serbia makes progress in privatisation corruption probe

15/01/2014

The Serbian Prosecutor's Office for Organised Crime has completed its preliminary investigation of 24 privatisations.

By Biljana Pekusic for Southeast European Times in Belgrade -- 15/01/14

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The Luka Beograd privatisation is among those being investigated. [Nikola Barbutov/SETimes]

The Serbian Prosecutor's Office for Organised Crime has brought charges against 63 people after completing a preliminary investigation into the country's privatisations. The investigation took place last year at the EU's behest.

In 2011, the European Commission deemed the privatisation of 24 Serbian enterprises as controversial and requested that police investigate the processes. Questions surrounding the privatisation process in Serbia have created a roadblock to the country's EU accession.

Serbia's privatisation law, which was adopted in 2001, was designed with a loophole: Buyers are not required to fully disclose their identities.

That led to hundreds of tenders where buyers appeared to be foreign investors, but were really Serbs using front companies to buy state enterprises and use their assets for large profits, according to investigative reports by the country's Anti-Corruption Council.

Almost 2,000 of the 3,017 state-owned enterprises that were privatised between 2001 and 2011 have ceased operation or have gone into bankruptcy, according to the Social and Economic Council of Serbia.

In the latest investigation, charges were filed in the privatisation processes of several companies, including Jugoremedija, Mobtel, Luka Beograd, Sartid, Tehnohemija, Azotara, Srbolek, Šinvoz, Zastava elektro and Nubainvest.

"We have launched an investigation against 93 suspects, including three former ministers, the director of the privatisation agency, the director of the action fund and other people from government agencies," said Miljko Radisavljević, the chief prosecutor for organised crime.

Radisavljevic said his office has completed investigations into 66 people and filed charges against 63. Among the offences are bribery, falsification of official documents and the illegal use of power in state-owned enterprises and civil service.

Judgments for the individuals are expected by the end of the year, Radisavljević said, adding that he estimates the amount of damages suffered by the state is more than 100 million euros.

First Deputy Prime Minister Aleksandar Vucic, who is charge of the country's anti-corruption efforts, said the cases now rest with the Serbian judiciary. He said the cases will serve as a test to see if the courts in Serbia are ready for the fight against corruption and crime.

"What we expect is to show is that our courts act independently, judge fairly and effectively. That we are not waiting 10 or 15 years for justice," Vucic said.

The investigation also found that illegal actions took place in the judicial system during the privatisation process.

"We recently dismissed a deputy prosecutor who is facing criminal proceedings," Serbian Public Prosecutor Zagorka Dolovac said.

In addition, criminal charges have been filed against former Commercial Court President Goran Kljajević and Commercial Court Judge Dusan Marcicev on suspicion of illegal actions during the privatisation of steel factory Sartid, which was purchased in 2002 by US Steel.

According to Branko Pavlovic, a lawyer who was engaged as a legal representative for some of the companies in Serbia that are being investigated, the country has a long way to go in its anti-corruption efforts.

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"Serbia is still unprepared to effectively fight corruption because there is no opportunity for the judicial sector to finish what police and prosecutors do," Pavlovic told SETimes.

He said he does not think illegal privatisation issues can be resolved to European standards because Serbia does not have enough qualified judges and prosecutors to finalise enough cases of corruption in the economy.

"Such cases have 100,000 pages of court documents. A judge may [be successful in completing] one such case, but judges have several of these cases," Pavlovic said.

What steps can Serbia take to make sure that its future privatisation process is transparent? Share your thoughts below.

This content was commissioned for SETimes.com.
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