Slovenia Wants Croatia to Suspend Court Proceedings against Slovenian Bank

By 29 March 2018

ZAGREB, March 29, 2018 - Slovenia sent a verbal note to Croatia on Wednesday protesting against rulings by Croatian courts against Slovenia's Nova Ljubljanska Banka (NLB) related to transferred foreign currency savings that Croatian citizens had in the now defunct Ljubljanska Banka's Zagreb branch at the time of the former Yugoslavia.

A press release from the Slovenian foreign ministry said that the continuation of proceedings in Croatian courts filed by Croatia's Privredna Banka Zagreb and Zagrebačka Banka against NLB, because they settled Ljubljanska Banka's debts to Croatian clients from public funds, represents a violation of the 2001 agreement of succession to the former Yugoslavia and a 2012 memorandum of agreement between the Croatian and Slovenian governments.

In its note, Slovenia expresses its expectation that Croatia will fulfil its international obligations from those agreements, ensure that court proceedings on transferred foreign currency savings are suspended until a solution is found through negotiations, and immediately stop violating internationally legal obligations.

The note further says that Ljubljana's stance is well known, that this issue should be resolved through succession negotiations or talks within the Bank for International Settlements in Basel. Slovenia claims the 2012 memorandum is an international agreement that enabled Croatia to join the EU and that, due to its international nature, it is above Croatian legislation, including the area of judiciary.

The issue over Yugoslav-era foreign currency savings came to the fore against in Slovenia a few weeks ago after the NLB approved some payments based on final court rulings in the cases by those two Croatian banks against Ljubljanska Banka.

The opposition has accused Miro Cerar's government of silently allowing that and has thus jeopardised national interests because it has potentially reduced NBL's selling price in a planned privatisation process. The opposition sponsored a special constitutional bill aimed at preventing NLB from executing payments for those savings as instructed by Croatian courts.

Cerar has said that in principle he agrees with protecting the NLB because, in his opinion, payments for Yugoslav-era savings were "unlawful," but the opposition's bill, which foresees sanctions against Croatia, needs to be further worked on so that it does not contradict Slovenia's constitution or EU law.