TRAJKOVSKI v. "THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA"
Inadmissible
Georg Ress
The applicant, Mr Strezo Trajkovski, is a national of the Former Yugoslav Republic of Macedonia, who was born in 1926 and lives in Skopje. He was represented before the Court by Mr Saško Dukoski, a lawyer practising in Skopje. The facts of the case, as submitted by the parties, may be summarised as follows. Under the relevant legislation of the Socialist Federal Republic of Yugoslavia (SFRY) at the material time the banks were under a duty to deposit foreign currency funds in the SFRY National Bank. The applicant had savings in foreign currency in a State owned bank - Komercijalna Banka-Skopje before the dissolution of the SFRY. In 1989 Komercijalna Banka paid an average monthly interest of 2.2 for savings in Deutschmarks (DEM). The same year it paid an average monthly interest of 6.9 for savings in United States dollars (US$). In 1991 the SFRY Council of Ministers passed a decision to the effect that the withdrawal of funds from foreign currency savings accounts was possible only in instalments (see relevant domestic law). The decision was repealed in 1992. On 8 September 1991 the Former Yugoslav Republic of Macedonia declared its independence. On 17 November 1991 the Former Yugoslav Republic of Macedonia adopted its Constitution and the Constitutional Law for the Implementation of the Constitution under which the laws from the SFRY remained in force except for the laws regulating the organisation and the competence of the SFRY institutions. On an unspecified date in 1991 the applicant’s bank refused his request to allow him to withdraw his savings in foreign currency on the basis of the aforementioned decisions of the SFRY Government. On 26 February 1992 the applicant’s funds were transferred to a new account in the same bank which was also frozen. The applicant had DEM 5,593.49 and US$ 499.91 in his new bank account; and 646 French Francs (FRF) and small amount of Swiss Francs (CHF), pounds sterling (GBP) and Austrian Schillings (ATS) in his old bank account. Both bank accounts bore the same number. On 24 April 1992 the Former Yugoslav Republic of Macedonia introduced its own currency. The State reserves in foreign currency were US $ 3.000.000. There were 1, 284,616 frozen bank accounts. The debt towards the holders of the accounts amounted to DEM 1.6 billion. On 26 April 1992 the Parliament of the Former Yugoslav Republic of Macedonia adopted the Act on Undertaking the Citizens’ Foreign Currency Deposits (hereinafter referred to as the 1992 Act) concerning the personal funds put on foreign currency bank accounts which had been deposited in the SFRY National Bank. Under the Act the Government undertook the obligation to pay back the respective funds provided that they had been put in savings accounts in the banks with headquarters on its territory. The citizens were entitled to draw a limited amount out of their savings accounts. Government bonds were to be issued for the remaining sum. On 27 July 1992 the applicant lodged a civil claim with the Skopje Municipal Court against the bank claiming back his money with the penalty interest. On 24 February 1993 his civil claim was dismissed on the grounds that under the relevant SFRY regulation the banks were obliged to deposit the natural persons’ funds in foreign currency in the Federal National Bank, and that the withdrawal of the funds from the savings accounts was possible only for the purchase of apartments, or business premises. On 20 May 1993 the Macedonian Parliament adopted the Act on the Guarantee by the Republic of Macedonia of Foreign Currency Savings and on the Funds and Means of Repayment of Foreign Currency Savings Deposited in 1993 and 1994 (hereinafter referred to as the 1993 Act) which repealed the 1992 Act. The 1993 Act provided that the withdrawal of funds from the frozen foreign currency savings accounts was only possible for the purposes set forth in law (see relevant domestic law). On 2 November 1993 the applicant appealed to the Appellate Court. He complained, inter alia, that funds put on frozen savings account should have borne the same interest, as thought they were put on a notice account, i.e., deposited on a contractual basis without the right to withdraw for a certain period of time. On 13 January 1994 the Skopje Appellate Court quashed the Skopje Municipal Court’s judgment, as it found, inter alia, that the court had not based its decision on the legislation adopted by the Former Yugoslav Republic of Macedonia and had not replied to the applicant’s arguments in respect of the payable interest rate. The applicant’s case was remitted for examination to the Skopje Municipal Court. On 20 December 1995 the Skopje Municipal Court found that all savings accounts in foreign currency had been frozen by the relevant decisions of the SFRY Council of Ministers. The claims of the holders of the frozen savings accounts had been regulated by the 1993 Act of the Former Yugoslav Republic of Macedonia because the country was facing a difficult economic situation. The court rejected the applicant’s claim on the ground that he had not wished to withdraw funds from his savings account in order to purchase an apartment, business premises, or for other purposes set out by law. As regards the interest rate, the court held that since the applicant had not concluded a contract with the bank for putting funds in a notice account he could not have received the same interest payable to the holders of such accounts. On 6 March 1997 the Appellate Court dismissed the applicant’s appeal. It held, inter alia, that the applicant’s allegations that the bank should have paid penalty interest were ill-founded, as the accounts had been frozen by virtue of law. On 18 March 1999 the Supreme Court upheld the lower courts’ decisions. It held that the applicable law in the applicant’s case had been the 1993 Act with its amendments. Finally, it concluded that the lower courts had rightly rejected the applicant’s action since his request to withdraw money was not made for one of the purposes provided by the Act. In 2000 the State reserves in foreign currency had been US $ 714,000,000, whereas the debt towards the account holders had decreased by DEM 508,100,000. On 21 April 2000 the Parliament adopted the Act on the Manner of the Re-payment of the Citizens’ Foreign Currency Deposits for which the [Former Yugoslav] Republic of Macedonia is Guarantor (hereinafter referred to as the 2000 Act) (see relevant domestic law) which repealed the 1993 Act. Under the 2000 Act the applicant’s funds on his account were converted into euros. Their amount was 4,168.10 euros. On 8 August 2000 the applicant withdrew 125.25 euros from his account. He was given Government bonds for the remaining sum. Following the Government’s decision of 12 December 2000 on the early buy out of the bonds which were mature in 2002, the applicant received 256.21 euros. Section 1035 provided as follows: “1. A contract on a monetary deposit is concluded when the bank obliges itself to accept and the depositor obliges himself or herself to deposit in the bank a certain amount of money. 2. By this contract the bank has the right to dispose of the deposited money and the obligation to return it in accordance with conditions determined in the contract.” Section 1038, as far as relevant, provided as follows: “Unless otherwise agreed, ... the depositor has the right to dispose of the whole or a part of the balance of the deposit at any moment.” Section 14, as far as relevant, provided as follows: “1. Domestic natural and legal persons may keep foreign currency on a foreign currency savings account or foreign currency savings deposit at an authorised bank and use it for making payments abroad, in accordance with the provisions of this Law. ... 3. The foreign currency on foreign currency savings accounts or foreign currency savings deposits are guaranteed for by the SFRY.” Section 71, as far as relevant, provided as follows: “1. Domestic natural persons may sell convertible currencies to an authorised bank or other authorised exchange office or they may deposit them in a foreign currency savings account or foreign currency savings deposit with an authorised bank. 2. Foreign currency kept in a foreign currency savings account or a foreign currency savings deposit may be used by domestic natural persons for payment of imported goods or services for his or her personal needs and the needs of close family members in accordance with the federal law governing foreign trade operations. ... 4. Foreign currency referred to in paragraph 2 of this Article may be used by domestic natural persons for the purchase of convertible bonds, for endowments for scientific and humanitarian purposes in Yugoslavia and for payment of a life insurance with an insurance company in Yugoslavia. 5. The National Bank of Yugoslavia shall regulate the operation of foreign currency savings accounts and foreign currency savings deposits of domestic and foreign natural persons.” Section 103, as far as relevant, provided as follows: “1. The National Bank of Yugoslavia is obliged, following a request of an authorised bank, to receive into deposit foreign currency funds which has effectively been deposited by domestic and foreign natural persons in foreign currency savings accounts or foreign currency savings deposits after the entry into force of this Law. 2. The methods and conditions for the deposition and withdrawal of foreign currency at the deposit of the National Bank of Yugoslavia shall be regulated by the Federal Executive Council on the proposal of the National Bank of Yugoslavia.” “1. On the basis of the deposited foreign currency ... the national banks shall authorise credits to banks in dinars in an amount equal to the deposited foreign currency, which shall be established on the basis of the average daily exchange rate applicable at the end of the respective month when the foreign currency is deposited. 2. When withdrawing foreign currency from the deposit, the bank is obliged to repay the national bank the used dinar credit in an amount equal to the amount of foreign currency withdrawn from the deposit, which shall be established on the basis of the exchange rate as applied when the same foreign currency was deposited.” Paragraph 8 of the Decision confirmed the purposes for which foreign currency could be used, as prescribed in the amended Article 71. Paragraph 10 stated as follows: “Domestic natural persons may withdraw from their accounts foreign money, cheques and letters of credit for travelling to a foreign country in accordance with applicable regulations.” The 1991 Decision was amended on 25 April and 16 May 1991 (OG SFRY nos. 30/91 and 36/91) by the addition of certain provisions, of which paragraph 17c established the following rules on advance announcement of withdrawals: “Authorised banks shall execute orders to pay to domestic natural persons foreign currency deposited in their foreign currency accounts ... if such persons previously announced to the authorised banks, within the following time-limits, that they will use foreign currency in the following amounts: an amount not exceeding DEM 500: within 15 days for the first withdrawal ... and within 30 days for any subsequent withdrawal...; an amount not exceeding DEM 1,000: within 30 days for the first withdrawal ... and within 45 days for any subsequent withdrawal ...; an amount not exceeding DEM 3,000: within 90 days; and an amount not exceeding DEM 8,000: within 180 days.” Section 1, as far as relevant, provided as follows: “A bank is an independent self-governing financial institution, which administers deposits, credits and other banking business in accordance with the law.” Section 2 stated as follows: “1. A bank conducts its activities independently with a view to making profit based on the principles of liquidity, security and profitability. 2. Banks and other financial institutions are holders of all rights, obligations and responsibilities in legal payment operations with respect to both social and other funds at their disposal which they use in accordance with the nature and purpose of financial funds. 3. Banks and other financial institutions decide independently on the manner and form of organisation and association as well as on their activities in accordance with market conditions and profit-making, pursuant to the provisions of this and other laws.” Section 61, as far as relevant, provided as follows: “The liability of banks shall be settled out of the bankruptcy estate in the following order: claims of individuals; claims of the National Bank of Yugoslavia, the SFRY and other creditors who are not the founders of the bank; claims of the founders of the bank.” Article 30, as far as relevant, provides as follows: “... 3. No person may be deprived of his property or property rights, save [for the protection of] public interest as determined by law. 4. If property is expropriated, or the property rights are restricted a just compensation not lower than the property’s market value is guaranteed...” Article 52 § 4 provides as follows: “... Laws and other regulations may not have a retroactive effect, save if they are more favourable to the citizens.” Article 5 §§ 1 and 4 provides that the existing federal laws of the former Yugoslavia shall be in force in the Former Yugoslav Republic of Macedonia with the exception of laws regulating the organisation and competence of the Yugoslav federal organs. Article 6 provides that all federal laws which are inconsistent with the Macedonian Constitution shall be amended accordingly within one year from the day the Constitution has been promulgated. Under section 1 the Former Yugoslav Republic of Macedonia was the guarantor for the payment of domestic and foreign currency bank savings and was under a duty to provide funds. Under section 2 the Former Yugoslav Republic of Macedonia was guarantor for the payment of funds put on foreign currency savings accounts on its territory which had been transferred to the National Bank of the SFRY by 27 April 1992. Under section 3 the banks were not allowed to convert funds from the frozen savings accounts in another currency. The funds yielded the interest, as determined by the National Bank. Under section 4 in order to insure the liquidity of the State funds all foreign currency savings accounts were frozen and the funds could be withdrawn, or spent only for the purposes set out by law. Under sections 5 and 6 the State was to provide funds for the re-payment of the debt. Under section 7 the account holders were allowed to withdraw the equivalent in domestic currency of DEM 100 per month from their frozen savings accounts provided that they had not had sufficient funds to meet their monthly needs. Under section 8 account holders were allowed to withdraw some funds from their savings accounts in foreign currency to meet medical, wedding, funerary and school expenses, or to re-pay long-term bank credits, to pay taxes, custom duties, taxes concerning the transfer of shares, to purchase State-owned agricultural land, machines for agriculture and for other purposes set out by law. Under section 10 account holders were allowed to withdraw some funds from the frozen savings accounts in order to meet their medical and school expenses overseas, or purchase plane tickets. Under section 11 in accordance with the Government’s decision the State would advance a credit of 50% of the amount paid by the banks to the holders of the frozen accounts. In 1997 and 1998 the payable interest rate for the frozen savings in DEM was 1.50, and in 1999 and 2000 it was 1.90. In 1997 the payable interest rate for the frozen savings in US$ was 3.90; in 1998 it was 4.30; in 1999 it was 3.60 and in 2000 it was 4.30. Section 8 provides, inter alia, that the communal apartments may be purchased by denars received from the buy out of the funds from the frozen savings accounts. It was possible to sell funds from the frozen savings accounts to persons who wished to purchase communal apartments or business premises. Their price (not lower than 50%) was determined in accordance with the market demand. Section 13 provides that the state-owned shares in companies, banks and other state-owned securities may be purchased with funds drawn from the frozen foreign currency savings accounts. Section 1 provides that the law shall set out the manner and the procedure for the payment of funds put on foreign currency savings accounts which were frozen and for which the guarantor is the State. Under section 3 the banks shall convert funds from the frozen foreign currency savings accounts into euros in accordance with the National Bank’s exchange rate. Under section 4 the holders of the foreign currency savings accounts may withdraw 3% of funds from each of their savings accounts as from 1 July 2000 provided that the amount of their funds exceeds 50 euros. Under section 10 the bonds are negotiable and their value is expressed in euros. Under sections 11, 12 and 13 the bonds shall be bought out in national currency twice a year within a ten year period of time, as from 1 April 2002. The interest shall be paid off twice a year, as from 1 April 2001. The applicable exchange rate shall be the average exchange rate of the National Bank’s exchange list published on the day of payment, or within thirty days from the day the bond becomes mature. Under section 17 the bonds may be used to pay off securities and concessions, to obtain shares in State-owned companies, to pay long-term rents, to purchase communal apartments, agricultural and construction land and to obtain shares in accordance with the Reconstruction of the Banks’ Act. Under section 21 the State may buy out the bonds at any time in accordance with the Government’s decision.