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The High Representative issued a Decision on 5 April 2001 to establish the provisional administration of the Hercegovacka Banka. This Decision is effective as of today, 6 April 2001. The Decision was issued under the authority granted to the High Representative under Articles II and V of Annex 10 (Agreement on Civilian Implementation of the Peace Settlement) of the General Framework Agreement for Peace.
The reason for issuing this Decision reflects the repeated concern expressed by the Peace Implementation Council regarding the continued corruption that hinders the economic reform of Bosnia and Herzegovina. Furthermore, such corruption is a threat to democratic governance, and wastes public resources. This is of particular concern where the maintenance of illegal parallel institutions is concerned. The High Representative is deeply concerned by the ownership and operations of the Hercegovacka Banka. Serious questions have arisen in regard to the non-transparent ownership of the Bank through various private companies. This lack of transparency is not in the interests of the general public. There are approximately fifty sub accounts held by the HVO in this bank. Records show that large deposits have been made into these accounts, but fail to reveal where the monies are now held, nor how or where they have been disbursed from the accounts. The latest reports indicate that significant sums of money have recently been withdrawn from accounts at the Bank. The measures taken today are therefore essential to steps to help stabilise the Bank. The High Representative is convinced that the appointment of a Provisional Administrator is essential to the interest of public confidence and the credibility of the banking system in Bosnia and Herzegovina. This is especially important given the key requirement to ensure that all monies raised through Federation institutions are properly accounted for, and that the interests of those who hold accounts in the bank are properly protected. The High Representative requests the understanding and co-operation of all the citizens affected by this Decision in order to help the Provisional Administrator to be able to protect the interests of both the public and private account holders.
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