USIA - Text: U.S. Statement on Yugoslav State Succession, 97-09-29
From: The United States Information Agency (USIA) Home Page at <http://www.usia.gov>
TEXT: U.S. STATEMENT ON YUGOSLAV STATE SUCCESSION
(U.S. rejects "FRY" claim of being sole successor) (980)
Washington -- Deputy State Department spokesman James B. Foley said the
United States "unequivocally rejects" the assertion of the "Federal
Republic of Yugoslavia" (the "FRY") that it is "the sole successor state to,
or the sovereign continuation of, the former Socialist Federal Republic of
Yugoslavia (SFRY)."
In accordance with international law, the U.S. government considers that
all five successor states -- Bosnia and Herzegovina, Croatia, the Former
Yugoslav Republic of Macedonia, Slovenia and the "FRY" -- are equal
successors to the SFRY, Foley said September 29.
He further said that the outer wall of sanctions against Serbia and
Montenegro remain fully in force. "Progress on succession issues continues
to be a central element of the outer wall of sanctions. Belgrade continues
to be the main impediment to progress towards a resolution on this
issue."
As part of the U.S. policy of furthering progress on succession issues and
protecting successor state assets, Foley said, "today the United States
filed, at the request of the U.S. District court in New York, statements of
interest in two cases ... [that] involve claims by 'Federal Republic of
Yugoslavia' (FRY) banks against commercial entities of two other successor
republics of the former Yugoslavia (SFRY) regarding defaulted loans."
He said the United States "is facilitating reconstitution of bank records
from 'FRY' banks in order to establish what assets are legally valid and
extant." However, "FRY" banks will not be allowed to resume operations in
the United States.
Negotiations to resolve the question of the allocation of SFRY assets are
currently under way in Brussels under the authority of High Representative
Carl Westendorp and conducted by Special Negotiator Sir Arthur Watts.
Following is the text of Foley's statement:
(Begin text)
STATEMENT BY JAMES B. FOLEY, DEPUTY SPOKESMAN ON YUGOSLAV STATE SUCCESSION
U.S. Department of State
Office of the Spokesman
September 29, 1997
The U.S. government reiterates that it unequivocally rejects the assertion
of the "Federal Republic of Yugoslavia" (the "FRY") that it is the sole
successor state to, or the sovereign continuation of, the former socialist
Federal Republic of Yugoslavia (SFRY). Consistent with customary international
law, the United States considers that all five successor states, Bosnia and
Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Slovenia
and the "FRY" are equal successors to the SFRY. The United States is joined
in this view by the international community.
The outer wall of sanctions against Serbia and Montenegro remains fully in
force. These sanctions include a prohibition on membership in international
organizations such as the U.N. and the OSCE (Organization for Security and
Cooperation in Europe) and access to international financial institutions
as well as normalization of relations with the United States.
Progress on succession issues continues to be a central element of the
outer wall of sanctions. Belgrade continues to be the main impediment to
progress towards a resolution on this issue. Belgrade's record in other
areas has also fallen far short of acceptable, including cooperation with
the International Criminal Tribunal for the former Yugoslavia, resolving
the problems in Kosovo, and real progress on democratization.
In keeping with our policy on furthering progress on state succession
issues, and our continuing efforts to protect successor state assets, today
the United States filed, at the request of the U.S. District court in New
York, statements of interest in two cases, Beogradska Banka v. Interenergo
and Jugobanka v. U.C.F. International and Slovenijales. These two cases
involve claims by "Federal Republic of Yugoslavia" (FRY) banks against
commercial entities of two other successor republics of the former
Yugoslavia (SFRY) regarding defaulted loans.
The U.S. government will support the adjudication of these claims in order
to protect former SFRY financial assets. Allowing these cases to go forward
fulfills our responsibility to help protect former Yugoslav assets for the
benefit of all the successor states until they reach an agreement on their
allocation. Failure to permit timely adjudication of these claims could
seriously risk diminution of the value of the assets involved. For example,
over time, there is a risk that applicable statutes of limitation will
lapse, that evidence will be lost, and that the debtors could fall into
bankruptcy or otherwise become unable to repay the valid debts.
Any payments in favor of the plaintiff banks in these cases must, under
U.S. law, be paid only into escrow or otherwise blocked accounts pending
resolution of the succession and asset allocation issues among the five
successor states. It is the view of the U.S. government that going forward
with adjudication of the plaintiff's cases will not prejudice any successor
state claims against the assets of the SFRY and does not imply nor would it
result in the allocation of any SFRY assets.
As part of the United States' continuing efforts to protect successor state
assets, the U.S. government intends to facilitate the reconstitution of
bank records from "FRY" banks in order to establish what assets and
liabilities are legally valid and extant. However, the U.S. government will
not authorize "FRY" banks to resume operations in the United States.
The allocation of SFRY assets remains unresolved pending the conclusion of
an agreement among the five successor states. At present, negotiations
towards this end are under way in Brussels under the authority of the High
Representative Carlos Westendorp, and conducted by the Special Negotiator,
Sir Arthur Watts. In an effort to lend support to these negotiations and to
promote a prompt and successful outcome, the United States will explore
ways to assist the special negotiator in resolving outstanding succession
issues among the successor states.
The United States calls on all the successor states to the SFRY, and in
particular the "FRYs", to cooperate with Sir Arthur Watts in resolving
these outstanding issues.
(End text)
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