Yugoslavia seeks missing millions

The Milosevic regime is implicated in large-scale corruption

The central bank in Yugoslavia has begun moves to recover billions of dollars in state funds which it says were sent out of the country under the former president, Slobodan Milosevic.

A special bank commission is trying to trace what reports say could be up to $4bn sent abroad during the early 1990s.

The governor of the new National Bank of Yugoslavia, Mladjan Dinkic, told the Politika newspaper in Belgrade that the money was despatched by the sackload at a time of hyper-inflation. Some has been returned, but some was apparently left in private accounts abroad.

Cyprus is a tax haven and major offshore business centre

Last week US Treasury investigators offered to help recover $1bn worth of funds identified as having gone to Cyprus, Mr Dinkic said. But the financial authorities there say they have no knowledge of the US findings.

"Bags marked as foreign currency savings somehow got through customs borders and reached Cyprus, to be transferred elsewhere," he said.

Officials in Switzerland and Cyprus have pledged to help the new Yugoslav authorities track down the missing funds.

The former Yugoslav government used international sanctions as a justification for moving funds overseas.

Hard search

Economists in Belgrade say the hunt for the missing millions will be fraught with difficulties. They say much of the money passed through Cyprus on its way to Israel and South Africa, where it is being held in private accounts and under the names of dummy companies.

The BBC's Belgrade correspondent, Jacky Rowland, says it is unlikely that all of the funds will ever be retrieved.

"Some of that money has been spent, a part has been returned, but some of it is still on private accounts. Members of the (former) establishment have no intention of giving it back," Mr Dinkic said.

Mr Dinkic, a 36-year-old economist, was elected central bank governor by the Yugoslav parliament on 28 November, after approval from the reformist President Vojislav Kostunica.