Association: If state loses arbitration case to banks, it should tax their assets

The chief coordinator of the Franak association, Goran Aleksic, has said that Croatia could have avoided a complaint filed by banks with an arbitration court in Washington had state officials talked to banks in time and threatened them with introducing taxes on bank assets, noting that this was still an option if the arbitration court decided that the state had to compensate banks.

The Jutarnji List daily said on Wednesday that Intesa Bank and Unicredit, and probably Erste Bank and Raiffeisen Bank, had reported Croatia to the International Court for Settlement of Investment Disputes (ICSID) in Washington for violation of their legal personality and profit loss. The case has to do with a law on the conversion of loans pegged to the Swiss franc to euro-indexed loans, adopted by the previous, SDP-led government, which caused a cost of around eight billion kuna for banks operating in Croatia.

Aleksic, whose association represents holders of loans indexed in the Swiss franc, said that banks had not filed a lawsuit but rather wanted the court to establish if Croatia had had the right to pass such a law. Croatia, he added, is a signatory to an agreement obligating it to respect the outcome of the arbitration.

"State officials failed in recent months to sit at the table with bankers and tell them that their assets would be taxed if they requested arbitration. However, if it is established in the arbitration that the state should not have adopted the loan conversion law and that Croatia should return money to the banks, it still won't be late to introduce taxes on bank assets," Aleksic said, explaining that in that case, banks would not be given back the money they were claiming because the situation would be even.

Last update: Wed, 23/03/2016 - 11:53

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