Serbia: Hitting Criminals Where It Hurts
http://www.tol.cz/look/TOL/article.tpl?IdLanguage=1&IdPublication=4&NrIssue=326&NrSection=1&NrArticle=20645
by Dorotea Carnic and Milos Djorelijevski for Transitions Onine - June 17, 2009
Serbian police believe they finally have an effective tool against criminal groups that long have operated with impunity.
BELGRADE | In developed countries that have been facing the problem of organized crime for decades, it was rightly concluded that confiscation of illegally acquired assets is, in most cases, a far more effective deterrent than imposing prison sentences. Offenders generally are quite ready to do time behind bars if they know that once released from prison, their ill-gotten gains – houses, luxury cars, businesses, and money – will be waiting for them. But when stripped of all assets they are unable to prove were acquired legally, mobsters suffer a greater loss than simply time spent in a prison cell.
Italy is one country where this deterrent has been implemented successfully; last year alone, asset seizures from criminal groups amounted to 4 billion euros. Serbia, where high-ranking officials describe the level of organized crime as “unbearable,” has decided to follow Italy’s example. After initial announcements in October, the Serbian Parliament passed a law based on the Italian model. Prosecutors began using the new legal tool on 1 March.
Serbian State Prosecutor Slobodan Radovanovic said that investigations had been launched against 280 people as of the end of May, and the law had “seriously shaken Serbia’s criminal circles.” Experts say that the new power of asset forfeiture is crucial in the fight against organized crime. The most important aspect of the law is the reversal of the burden of proof from the prosecutors to the prosecuted; it is the defendants who must prove they acquired their assets legally and by way of taxable income. Otherwise, all property for which such proof is lacking will be frozen, and – after sentencing – irrevocably taken away. This concerns not only illegally obtained property, but all other assets out of proportion to a defendant’s legal income.
“Money, movables, jewelry, stocks, bonds and other securities will be taken away, including real estate – houses, apartments, office space and buildings, land, income, and other forms of crime-related profit,” Special Prosecutor for Organized Crime Miljko Radisavljevic said of the types of assets subject to seizure. “I believe that real estate is what will be confiscated in most cases.”
CRIME BOSSES AND BUSINESS MAGNATES
The first to come under the scrutiny of the new law was Milorad Ulemek, the former secret police colonel also known as “Legija,” who is serving four consecutive 40-year terms for his role in four separate cases. These include the assassination of Serbian Prime Minister Zoran Djindjic and the murder of communist-era Serbian President Ivan Stambolic. Although the Special Court for Organized Crime has managed to prohibit Ulemek from selling or otherwise profiting from his share of a house in Belgrade, to date there has been no action announced regarding the fortune Ulemek is alleged to have amassed through kidnapping and drug dealing.
Also under investigation are Sreten Jocic, a.k.a. “Joca Amsterdam,” who is suspected of involvement in the murder of Ivo Pukanic, owner of the Croatian weekly magazine Nacional, and Stanko “Cane” Subotic, who fled to Switzerland and is being tried in absentia for having organized the smuggling of enormous quantities of cigarettes while Slobodan Milosevic was in power in Serbia. Milosevic’s widow, Mirjana Markovic, and his son, Marko, also reportedly have investigations pending against them for involvement in cigarette smuggling.
Some members of the so-called Zemun Gang, the criminal group led by Ulemek and Dusan Spasojevic and named after the Belgrade suburb from where they operated, are also being investigated, according to media reports.
But the most interesting case may be that of Subotic, whose assets are estimated at over 500 million euros, although he only has a single apartment in Belgrade to his name. Subotic has been unofficially linked to a number of very successful companies, in part through the Danish-registered holding company EMI Group. Among his reputed assets are Futura Plus, which controls the distribution of 40 percent of all print media in Serbia; wineries and vineyards in France; and a distributor of soft drinks and sports equipment in Greece. Subotic is also said to be the biggest importer of alcoholic beverages into neighboring Montenegro, whose president, Milo Djukanovic, is a close friend.
DEVIL IN THE DETAILS
Belgrade University law professor Goran Ilic says that authorities have the legal power to seek the temporary seizure of property belonging to people residing abroad but facing trial at home. In other words, Serbia may request that Switzerland freeze Subotic’s assets in that country. Sources close to the financial investigation of Jocic, however, say it is naïve to believe the criminals’ secret caches and bank accounts will be found and that organized-crime and financial-crime investigators will have a hard time trying to track criminal assets.
Jocic, for example, also has no official assets in Serbia, and neither do his closest relatives. During his recent trial, he said his monthly income was 600 euros, which he claimed covered his costs of living in Belgrade’s plush Dedinje district – in a villa that Jocic had been renting from the family of the late Serbian President Milosevic until his arrest in late April.
Still, Justice Ministry officials have stated publicly they believe as much as 2 billion euros will flow to the state treasury through asset seizures. Justice Minister Snezana Malovic said the law has already yielded good results and that, judging by the threats she is getting, the mob is worried about the future of its assets. For his part, Special Prosecutor Radisavljevic says not to expect quick and easy results because registers and databases of citizens’ property – maintained by state institutions, public companies, and other organizations – are mostly not up to date. He added that “a lot of classical police work will be needed to uncover the necessary information.”
Experts also caution that the lack of a centralized database could lead to selective implementation of the law. In order to determine whether an accused person has any property in Serbia, inquiries must be made in all 168 municipalities. Skeptics wonder just how enthusiastically underpaid municipal clerks will embrace this additional task. It is also very likely that many might simply disregard the request, or even enter small “corrections” presenting the accused as quite destitute, especially if someone turns up making the clerk an offer he can’t refuse.
Special financial investigations resulting in criminal asset confiscation are, according to the law, launched by prosecutors in the event there is reasonable doubt that the accused’s property was acquired illegally. Prosecutors are formally in charge of such inquiries, although the actual fieldwork is performed by a specialized police unit. The goal is to gather evidence concerning the assets, legal income, and living expenses of a defendant, witness-collaborator, or benefactor. Investigators will also look for proof of property inherited and of payment of fees for transferring property to another person.
A special office will administer all seized property. Temporary property seizure can be applied at any stage of a proceeding, which is also the case with financial investigations. Asset seizures will become irrevocable once a criminal sentence is passed down.
The law will not apply, however, to witness-collaborators (suspects who turned state’s evidence) that acquired such status before the law took effect. Thus, for example, Ljubisa “Cume” Buha, a gangster who testified against former fellow members of the Zemun Gang, will be able to continue enjoying his riches, some of which derive from the gravest of crimes.
The law was loudly heralded by the most influential Serbian media outlets in a blitz rivaling a Coca Cola campaign. The latest propaganda effort by the Serbian authorities might lead the uninformed to believe that criminals in Serbia would be put in their proper place in a matter of days, transformed from arrogant, jeep-driving thugs into street vendors of used faucets and shoes.
Serbian police head Milorad Veljovic stressed that implementation of the law will be “a test of the state’s resolve to confront crime.” Veljovic described the financial investigation unit formed at the same time as the law as “the state’s strongest tool” in the showdown with organized crime, adding that it “needs to be supported by all state bodies, the whole state. Otherwise, its formation will be purposeless.”
