Monday, 29 August 2022

INA Case: Biggest Amount Frozen by Anti-Money Laundering Office Ever

ZAGREB, 29 August, 2022 - The freezing of HRK 813 million in the case involving the resale of the INA company's gas is the biggest one in the history of the Anti-Money Laundering Office, which was first informed of possible wrongdoing by banks, office director Ante Biluš said on Monday.

He told the press the amount was frozen in 16 accounts in eight commercial banks and in six open-end investment funds, adding that real estate was frozen too.

If the courts find the money was gained illegally, it will be possible to return it, he said.

Everything started with notifications from "more than one bank" and the money was blocked on Saturday, he said, adding that "the system responded on time."

Asked if he was shocked that money from gas transactions was ending up in the account of a pensioner, Biluš said "it seems a little unusual."

Speaking at the same press conference, Finance Minister Marko Primorac said the uncovering of the scam and the freezing of the money was a result of coordinated action by state bodies, which he said were professional and independent.

Asked about the responsibility of INA's management and supervisory boards, Primorac said he did not know "how these processes in INA work."

"From what I know, one person was agreeing lower prices. If some internal processes allowed that, then it's unusual," he added.

"I don't know how the decisions came to the supervisory board... Everything should be fully investigated and if there is accountability, it should be treated appropriately," the minister said.

In an operation launched on Saturday by the USKOK anti-corruption office and the police, five persons were arrested on suspicion of wrongdoing with INA's natural gas, which was sold below the market price. Allegedly, the company has been defrauded of over HRK 1 billion.

One of the suspects, INA executive Damir Škugor, told investigators he was not guilty and that the gas was sold in line with the company's business policy. Investigators say he paid the money from the contentious transactions into the bank account of his father Dane.

Monday, 29 August 2022

Cetina Spring Protection - Local Authorities, Ecologists Call for Action

August 29, 2022 - A problem escalated at Veliko Vrilo, the most beautiful river spring of Cetina. The location is not protected, but it has been used by many guests and excursionists this summer again, who keep swimming in the spring. The leader of the municipality of Civljane says that he is powerless, and ecologists appeal to the Government to protect such natural beauties.

As Poslovni writes, among the karst springs of Cetina, Glavaš or Veliko Vrilo is the most beautiful, largest, and deepest.

The shades of blue of the hundred-meter-deep abyss attract crowds of tourists to Civljane, the smallest municipality in Croatia.

However, swimming is prohibited here. At least it used to be.

Visitors couldn't even know. The prohibition sign was removed a few years ago, authority over the spring from the Public Institution Priroda was transferred to our youngest nature park - Dinara - which has not yet come to life, and this means that no one is currently taking care of the spring!

"For me, it is a national shame that people swim and sheep bathe inside the spring. A large part of our county is supplied with this water", says Miranda Mandarić from Split for HRT.

The mayor says that he is powerless, he wrote to whoever he could, but the problem has not been solved yet.

As for the already cloudy spring, if the local authorities were allowed to do so, they would have protected the area themselves.

Environmentalists started voicing their concern as well. They are asking for the urgent adoption of regulations that would finally properly protect these natural pearls.

"What is problematic is that we still do not have such documents for other nature parks and national parks, which means that for only 4 of the 20 protected areas regulations have been adopted, even though all the legal deadlines for their adoption have expired", says Zrinka Jakl of the Sunce Association for Nature, Environment, and Sustainable Development.

Someone will need to explain to curious tourists that, even though they behave politely, they are destroying the spring of an important river.

"We found out about it on Instagram, the spring is beautiful", emphasises Csaba, a tourist from Hungary.

And that way it should stay. The Ministry of Economy and Sustainable Development is on the move. There is still time until the rush of tourists next summer.

For more, make sure to check out our dedicated Lifestyle section.

Monday, 29 August 2022

Young Man Who Drew Swastika on Monument to Holocaust Victims Charged

ZAGREB, 29 August, 202 - The Varaždin police have filed a criminal complaint against a 24-year-old man who painted a swastika and the insignia of the German SS on the monument to the victims of the Holocaust in Varaždin, the police reported on Monday.

The police have completed a criminal investigation of the 24-year-old from Varaždin suspected of having painted the swastika and the symbol of the SS with silver spray on the monument to the victims of the Holocaust in Varaždin between 17 and 18 August, the police said in a press release.

After the investigation was completed, a report was filed against the suspect for the criminal offence of damaging property, the Varaždin police added.

Monday, 29 August 2022

Croatia Reports 59 COVID Cases, 15 Deaths

ZAGREB, 29 August, 2022 - In the last 24 hours, 59 coronavirus cases, out of 572 tests, and 15 related deaths have been registered in Croatia, the national COVID crisis management team said on Monday.

There are 4,967 active cases, including 569 hospitalised patients, 23 of whom are on ventilators, while 3,176 persons are isolating.

Croatia has registered 1,211,979 coronavirus cases to date, the death toll stands at 16,673, and 70.87% of adults have been vaccinated.

Monday, 29 August 2022

Gas Trading Scam Suspects Remanded in One Month's Custody

ZAGREB, 29 August, 2022 - One month's detention has been set for five persons arrested for wrongdoing with natural gas whom the USKOK anti-corruption office suspects of conspiracy, abuse of trust in doing businesses, aiding and abetting in that crime, and money laundering, the Zagreb County Court said on Sunday.

In an operation that USKOK and the police launched on Saturday, investigators suspect Damir Škugor, an executive in the INA energy company, Josip Šurjak, president of the Croatian Bar Association, Šurjak's business partner Goran Husić, with whom Šurjak co-owns the OMS Upravljanje company, Škugor's father Dane, and Marija Ratkić, Management Board president at the Plinara Istočne Slavonije gas distribution company.

It is suspected that INA has been defrauded of over HRK 1 billion, that the illegal gains of Škugor and his father amount to nearly HRK 500 million, that Husić made a profit of over HRK 90 million and Šurjak of HRK 68.9 million.

There is over HRK 200 million in illegal profit still in the account of Šurjak's OMS Ulaganje company.

Investigators believe that from June 2020 to 27 August this year, Škugor, head of INA's Gas and Power division and deputy chair of the Plinara Istočne Slavonije Supervisory Board, conspired with the other suspects to sell INA's gas at below-market prices.

As the mastermind of the scam, Škugor instructed the second accused to obtain, on behalf of the accused company, a permit from the HERA regulatory agency for the provision of gas trading services, which the second accused did, USKOK said.

Investigators suspect the accused and the accused company obtained at least HRK 848 million in illegal gains.

They said the suspects bought gas from INA for €19.5 and sold it for €28. During questioning, Škugor said he was not guilty and that the gas was sold in line with INA's business policy.

(€1 = HRK 7.5)

Monday, 29 August 2022

Economy Minister to Request Extraordinary Audit of INA's Gas Business

ZAGREB, 29 August, 2022 - Economy Minister Davor Filipović said on Monday he would request an extraordinary audit of the INA energy company's gas business in 2020, 2021, and part of this year.

He was speaking to the press ahead of a meeting he convened with INA's management at which, he said, he would ask for detailed explanations of the latest events.

In an operation launched on Saturday by the USKOK anti-corruption office and the police, five persons were arrested on suspicion of wrongdoing with INA's natural gas, which was sold below the market price. Allegedly, the company has been defrauded by over HRK 1 billion (over €133 million).

One of the suspects, INA executive Damir Škugor, told investigators he was not guilty and that the gas was sold in line with the company's business policy.

The audit will also examine the role of INA's internal audit, audit committee, external audit, and its management and supervisory boards, Filipović said.

He said it was "very important" for the audit to examine all contracts, gas procurement and sale prices, and the conditions under which business partners signed those contracts with INA.

The minister said he expected independent auditors to also give recommendations for internal control at INA.

He congratulated the Finance Ministry, the police, the State Attorney's Office, and everyone involved in uncovering this affair.

As for questions raised by some about his responsibility as a former member of INA's supervisory board, Filipović said he spent a little over four months in that position.

"The contentious contract with the OMS company was signed two months before I was appointed to INA's supervisory board, and all this happened from mid-2020 onwards," he said, adding that it is known who the presidents and members of the supervisory and management boards at that time were.

Filipović said he did not support adopting the minutes of a supervisory board meeting at which this year's business plans were adopted because he did not take part in those decisions.

Asked if he had talked with management board president Sandor Fasimon, he said he had talked with the Croatian members of the supervisory and management boards.

He said he asked the management board's Croatian members to convene an urgent meeting of the board, expected to be held on Wednesday, at which they would ask for additional explanations, analyses and documents to find out how something like this could happen.

Journalists noted that according to some reports, the Plinara Istočne Slavonije gas distribution company had warned the government about things not adding up and extra profits. Asked if he had any information about these events prior to Saturday's operation, the minister said he did not.

Filipović reiterated that the contentious contract was signed before his arrival in INA and said this concerned the fourth level of decision-making in the company.

"INA's management board has to give many answers as to what happened with internal control and the internal audit," he said, adding that the affair was uncovered and assets were blocked thanks to the Tax Administration's independent money laundering division.

"We see that the system is working, from the police to the Finance Ministry," Filipović said, adding that he has not spoken with his predecessor Tomislav Ćorić.

"I don't want to be his attorney, but minister Ćorić couldn't have known what the fourth management level in INA was doing," he said.

Monday, 29 August 2022

Baranja Paprika Harvest Begins, Customers Must Expect Higher Prices

August the 29th, 2022 - The Baranja paprika harvest has begun! For many, this is an absolute favourite and a ''must buy'' Croatian product, but buyers must expect higher prices.

As Poslovni Dnevnik writes, the Baranja paprika harvest has started somewhat earlier than usual, and due to the bad weather conditions that accompanied its cultivation, there will be less of it, but fortunately, what has managed to grow is of very good quality.

Due to the increase in production costs, the price of Baranja paprikas will rise significantly, with the price per kilogram now expected to reach up to 180 kuna. A small village which deals with the production of paprika, Lug, has seen many of its residents live on the Baranja paprika harvest for centuries now, according to a report from HRT.

"It's very difficult to find good paprika, you need to put in lot of effort and you do almost everything by hand," said Zuzana Jozef, a local resident who has been dealing with this for many years.

''The drought reduced the amount of crops we got, but thankfully we still do have crops. It won't be anywhere near the amount we managed to get year, but the quality is still very good. Baranja paprikas this year are of very good quality, they're fleshy and they're full of seeds, so I hope our customers will be satisfied anyway,'' said Borivoje Stojanovic.

The only thing is that its price will have to increase, but true fans of Baranja paprikas will certainly continue to buy it regardless.

"Everything went wrong, including with the raw materials, and we probably irrigated it twice as much as usual for it to succeed," added Jozef.

Those who love and use Baranja paprikas for various reasons in their food know just how important watering is for these crops, and the fact that there has been a drought could have spelled disaster very easily. Regardless of whether it is sweet or hot pepper that customerd want, there can be no top specialties, especially at this time of the year, without them.

For more, make sure to check out our dedicated lifestyle section.

Monday, 29 August 2022

SuperSport HNL Round 7: Rijeka Drops to Last Place, Osijek Takes 3 Points against Hajduk

August 29, 2022 - The 7th round of the SuperSport HNL was held from August 26 to 28, 2022. The most exciting match of this round was the Osijek-Hajduk derby at City Garden Stadium, in which Osijek took 3 points. A look at the SuperSport HNL round 7. 

Gorica v. Istra 1961 (0:2)

Gorica and Istra opened the 7th round in Velika Gorica on Friday, August 26, 2022. 

After a scoreless first half, Erceg's goal was disallowed in the 70th minute after consulting VAR. Erceg found the back of the net just 11 minutes later to put Istra in the lead with 0:1. Erceg scored again in the 4th minute of stoppage time for the final 0:2 for Istra. 

 

Gorica is currently in 9th place with 5 points and one game in hand, while Istra is in 6th place with 8 points. 

Lokomotiva v. Slaven Belupo (0:1)

Lokomotiva and Slaven Belupo met in Zagreb on Saturday, August 27, 2022. 

The first half was full of yellow cards as Belupo was shown three and Lokomotiva one, though the match went into halftime without goals. The match's only goal came in the 80th minute when Kocijan scored for 0:1, which was the final result. 

 

Lokomotiva is currently in 8th place with 6 points, while Belupo is impressively in 2nd with 14. 

Rijeka v. Varazdin (1:2)

Rijeka and Varazdin met at Rujevica Stadium on Saturday, August 27, 2022. 

Another scoreless first half was quickly changed at the start of the second when Djouahra put Rijeka ahead in the 47th minute. Pavlovic was shown his second yellow in the 73rd minute, forcing Rijeka to play with a man down for the rest of the match, and Teklic equalized a minute later from the penalty spot. Kolaric made it 1:2 for Varazdin in the 87th minute, and it could have been 1:3 if Peric's goal was not called offside in the 3rd minute of stoppage time. 

 

Rijeka has dropped to last place with 5 points and one game in hand, while Varazdin is in 4th place with 9 points. 

Sibenik v. Dinamo (1:2)

Sibenik and Dinamo met in Sibenik on Sunday, August 28, 2022. 

Ivanusec put Dinamo ahead in the 35th minute for 0:1. Mina equalized just two minutes later for 1:1 at the half. A penalty taken by Petkovic put Dinamo back in the lead in the 68th minute, which was the final score. 

 

Sibenik is currently in 7th place with 7 points, while Dinamo sits in first place with 19. 

Osijek v. Hajduk (2:1)

Osijek and Hajduk closed out the 7th round at City Garden Stadium on Sunday, August 28, 2022. 

It was an emotional game for Hajduk as Marko Livaja learned of his father's tragic passing early on Sunday morning. Leovac scored Osijek's first goal in the 23rd minute for 1:0, before Beljo scored a penalty for 2:0 just 4 minutes before halftime. Livaja scored a penalty for Hajduk to reduce the score to 2:1 in the 72nd minute. Mlakar's goal was called offside by VAR in the 83rd minute, and the match ended 2:1 for Osijek. 

 

Osijek is currently in 5th place with 8 points, while Hajduk is in 3rd place with 9 points and two games in hand. 

You can see the full HNL table HERE

To follow the latest sports news in Croatia, follow TCN's dedicated page.

Monday, 29 August 2022

Do Benefits of Croatian Eurozone Accession Outweigh Risks?

August the 29th, 2022 - Croatian Eurozone accession is just around the corner, with all requirements filled, all boxes ticked and the date for entry marked out for the 1st of January, 2023. The public is still divided on the issue, however, so what are some of the advantages and some of the risks and costs of Croatia finally becoming a Eurozone member?

As Poslovni Dnevnik/Marina Marovic writes, here is no alternative to joining the Eurozone for Croatia, as it was part of the referendum the country held on joining the bloc. It did so back in July 2013 and according to experts, all the benefits of Croatian Eurozone accession greatly exceed the potential costs and risks. The Croatian economy has an extremely high degree of euroisation despite still using the kuna as it is tied to the euro, and around 70% of people's savings in Croatia are in the bloc's single currency.

Therefore, kuna devaluation is simply not an option, because the balance effect would be significantly more difficult for the Croatian economy to handle than any gains on the export front.

The biggest advantages of Croatian Eurozone accession

This high rate of Croatian euroisation originates from the time of the former state of Yugoslavia when, due to hyperinflation, the German mark was the currency used to preserve the value of money in the country. This means that regardless of Croatia having its very own currency for less than three decades, this sense of illusory monetary sovereignty will not actually be lost, but the risks involved in everything financial will be greatly reduced.

The absolute biggest advantage of Croatian Eurozone accession on January the 1st, 2023 comes in the form of significantly lower risks and reduced borrowing costs. In addition to the reduction in interest rates, which also maintains a better investment rating, additional borrowing will be made much easier because joining the Eurozone frees up significant funds (about 160 billion kuna in total) currently tied up as minimum foreign currency claims. In addition to that, the country's banks will reduce currency risks and improve overall stability.

In addition to lower interest rates and borrowing costs, Croatia will become more attractive for both investors and tourists (75 percent of them come from the Eurozone, and tourism makes up 20 percent of the nation's economic activity). Additionally, conversion costs for capital transactions such as the sale of property and land, the prices of which have been expressed in euros for a long time now, will be reduced.

Aside from property and other forms of real estate, renting an apartment or buying a car is also usually expressed in euros. By joining the Eurozone, Croatia is merely formalising some of the existing conventions. An additional advantage is that Croatia will be able to count on ECB support in case of any liquidity problems.

Croatian banks will lose out when it comes to conversion fees (about a fifth of their profit, or 1.5 billion kuna), and have additional ATM costs (totalling about 900 million kuna). Exchange offices will largely be out of business. The one-time cost of introducing the euro in Croatia will cost the banks an enormous 100 million kuna, and the cost of the entire adjustment will be paid for by other sectors of the economy, especially retail and telecoms. The average cost for large retail chains will stand at around 30 million euros, for telecoms it is around 20 million euros, and for smaller companies the cost of introducing the euro isn't expected to exceed 10,000 euros.

Uncertain times...

Croatian Eurozone accession is finally occurring in incredibly uncertain times in which it is really difficult to comply with all the requirements for convergence - known as the Maastricht criteria - and yet all the basic indicators were assessed as positive and successful in the latest report and decision back on July the 12th, 2022 The biggest risk is in the galloping rate of inflation.

Back in April 2022, the annual average rate of HICP inflation in Croatia stood at 4.7%, which is below the reference value of 4.9% for the price stability criterion. This value was decisive for the final decision on Eurozone accession in 2023. That said, by the time June rolled around, inflation crossed over into the concerning land of double digits, and the last July value of 12.3% was significantly higher than the average inflation in the Eurozone of 8.6%. The Baltic countries, all of which are now members of the Eurozone, have already registered inflations of more than 20%.

Just joining the euro brings a one-time increase in prices, but on average such an increase amounts to about 0.3% and in the context of current inflation is negligible. The dual display of prices (in both kuna and euros) serves to reduce this risk, and in general, the preparation for the introduction of the euro in Croatia is systematic and thorough, so that these risks are minimal.

In the long term, one would expect convergence of both prices and real income, but in practice there are many other factors that influence whether this actually happens or not. In addition to inflation - foreign exchange markets have experienced tectonic shifts. Croatia is now joining the club of prestigious countries when the euro is at its worst so far - and is at parity with the dollar, which has not happened in the last 20 years. There are several reasons for a strong dollar and a weak euro, but the most important one lies in the fact that the ECB is reluctant to raise interest rates.

The reason for the ECB's lack of reaction is multifaceted, but the fact is that inflation in the EU hasn't been caused by an increase in demand, but rather by an increase in energy and food prices. On the other hand, inflation across the pond in the United States of America is more a consequence of the post-pandemic recovery of the economy than anything else.

For more, make sure to check out our dedicated politics section.

Monday, 29 August 2022

First Row to the Sea! Fiat Driver Parks in Shallows on Murter Beach

August the 29th, 2022 - We all want to be as close to the sea as possible when summer arrives in Croatia and the temperatures become, frankly, intolerable. Some people take this to the absolute extreme, however, parking their cars quite literally on the beach, with the shallows of the sparkling, refreshing Adriatic Sea lapping at their alloys. One Murter beach was recently a victim of such parking.

As Morski writes, an unfortunate lack of intelligence and an even more lack when it comes to adequate punishments for people parking all over the place during the summer months have led to an increasing number of bizarre incidents all along the Adriatic coast. One Murter beach which should have been full of swimmers, those keen to get a bit of a tan and those seeking to relax with a good book under a parasol was visited by a car.

On Facebook page called ''Live from Slavonia's roads'' recently published photos from one Murter beach where a tourist took the expression "first row to the sea" a little too literally, parking his Fiat Grande Punto car literally in the shallows on the beach. It seems that some people will quite literally stop at nothing to get in the crystal clear waters of the Croatian Adriatic Sea, and why would you bother clambering over rocks and getting yourself overheated when you can quite simply drive directly into the sea?

"Greetings... this isn't somewhere in Slavonia, it's Murter... I couldn't resist not sending this picture to someone... So that everyone can see how rude and arrogant people have become...'' the post which contained the photos read, with an array of comments echoing the sentiments of just how pompous some people can be, especially when it's every man for himself when it comes to getting a good spot on the beach!

For more, make sure to check out our dedicated lifestyle section.

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