A costly enterprise

Insider is a popular Serbian investigative documentary TV programme produced by brave young journalists committed to seeking the truth. Over the past several years, Insider has managed to discover numerous unlawful activities, including serious instances of organized crime and high-level corruption, many of which involve prominent domestic politicians. In some cases Insider‘s revelations led to police investigations, but few have resulted in official verdicts due to the inefficiency of Serbia’s judicial system.  After a series on criminal activities of Serbian football hooligans, the interior ministry immediately gave Brankica Stanković, the producer of Insider, 24/7 police protection.

The latest serial by Insider, called “Patriotic Pillage,” deals with financial damage to Serbia’s budget as a consequence of its Kosovo policy. In four episodes broadcast so far, viewers have seen how Serbia is losing millions of euros through tax evasion and other fraud. Insider has brought to light evidence of what was already long suspected.

It began in 2005, when the Serbian government under then prime minister Vojislav Koštunica exempted domestic companies from paying value-added tax for the commodities sold on the territory of Kosovo. Officially, the intention was to ease the life of Kosovo Serbs by allowing them to buy goods at lower prices. In practice, the government’s decision has given rise to enormous malversations.

The way it works is simple. A company from Serbia receives a purchase order from its partner company in Kosovo.  Sometimes, the owner of the company based in Serbia would open another company in Kosovo, which then orders commodities from the original company only to secure the documents needed for VAT deduction.  That way one is virtually selling one’s own goods to oneself.  The company’s truck is then dispatched to a customs checkpoint at the boundary/border with Kosovo, where it gets the certificate necessary for exemption from VAT. But instead of proceeding to Kosovo, the truck turns back to Serbia and the goods supposed to be sold in Kosovo at a lower price are eventually sold in Serbia at the full price. The company thus appropriates the amount of the VAT as hidden extra profit.

In some cases, though, a portion of the load is smuggled into the northern – Serb-dominated – part of Kosovo via so-called “alternative roads.” The Insider team managed to covertly film transshipment from bigger trucks to smaller ones, as well as a Serbian police vehicle escorting a convoy of trucks down an alternative route all the way to the boundary/border.  In cooperation with their Albanian counterparts, Serb businessmen from the North have also developed a smuggling network through which goods from Serbia are being smuggled into the territory south of the Ibar river, which is under Priština’s authority.

Another form of malversation concerns Serbia’s budget expenditure for Kosovo. The Insider team has calculated that since Serbia lost sovereignty over Kosovo in 1999, the country has, on average, been spending on its former province around 650 thousand euros per day. This is a large amount of money in Serbian terms:  over 230 million euros per year.  Rather than being transferred to people in need, the bulk of this money has ended up in private pockets of politically favored individuals. Many of them are receiving salaries from both Belgrade and Priština, and some do not even live in Kosovo anymore.

Most political leaders of the Serbs from northern Kosovo – particularly members of Koštunica’s Democratic Party of Serbia (DSS) – have repeatedly refused Insider‘s request to tell their version of the story. Instead, they continue to condemn the Insider team as “anti-Serb propagandists who only want to divide Serbs, pitting them against one another.” Such rhetoric is strikingly reminiscent of how the Milošević regime demonized its political opponents in the 1990s.

Members of the Insider team were not allowed to attend a recent joint session of Serb delegates from northern Kosovo municipalities, even though it was formally open to the public. A group of men, who appeared to be engaged as private security personnel, prevented Insider‘s journalist from entering the building where the meeting was held. Journalists from other media were allowed in. The only politician who has meanwhile apologized to the Insider team for the incident is Krstimir Pantić, the Mayor of Northern Mitrovica.

Unlike Serb politicians from northern Kosovo, some former Serbian government officials agreed to appear in the series. While they did not try to deny the evidence presented to them – since it entirely consists of official documents issued by Serbian authorities – their reaction generally came down to a shrug.  They claimed they had no instruments to control how money was used once it had reached Serb-governed institutions in Kosovo.

In response to the “Patriotic Pillage,” the government in Belgrade has announced that those receiving double salaries – i.e. from both Belgrade and Priština – will soon have relinquish one of them. Deputy prime minister Aleksandar Vučić, who is also the coordinator of all security and intelligence services, has promised a thorough investigation into the practices discovered by Insider. But there are loopholes in the legislation that may make legal what would normally be considered illegal. People are generally inclined to believe those loopholes were created deliberately, which points to their deep mistrust of the country’s institutions.

Whatever the outcome, the “Patriotic Pillage” serial has demonstrated that excessive “patriotism” can sometimes prove a costly enterprise.  The price of not recognizing the Kosovo reality is not only political but also economic.