BOSNIA - OHR URGES ACTION ON POST-OHR IMMUNITY

C O N F I D E N T I A L SARAJEVO 001867

SIPDIS

DEPARTMENT FOR EUR(JONES),EUR/SCE(FOOKS/STINCHCOMB),L,
S/CRS

E.O. 12958: DECL: CLOSURE OF OHR
TAGS: PGOV PREL UN BK
SUBJECT: BOSNIA - OHR URGES ACTION ON POST-OHR IMMUNITY

Classified By: Ambassador Charles English. Reason 1.4(b) and (d).


1. (C) On December 11 the HighRep and Deputy HighRep provided
Quint Ambassadors with a non-paper outlining the need for OHR
immunity following OHR's closure. The paper, which is
contained in paragraph two below, describes the urgency of
the problem and proposes several ways of addressing it;
though it seemed to us from the conversation that the
HighRep's preference was for a UN resolution. We share OHR's
concerns about failing to address the immunity issue, and we
believe that it is likely to emerge as an important component
to discussion within the Quint (and the Peace Implementation
Council) about OHR closure. With this is in mind, we would
encourage early discussions among political and legal experts
on a way forward.


2. (C) BEGIN TEXT:

NON-PAPER: OHR IMMUNITY FOLLOWING CLOSURE

THE TERRITORIAL LIMITS OF OHR'S CURRENT IMMUNITIES: The terms
of Annex 10 to the General Framework Agreement for Peace
(GFAP) grant the High Representative, his office (OHR),and
staff the same privileges and immunities as those granted to
diplomatic agents and missions by the Vienna Convention on
Diplomatic Relations. This grant of immunity is
geographically limited to the territories of the GFAP
signatories, BIH, Croatia, Serbia, and Montenegro (Serbia and
Montenegro as successor states to the Federal Republic of
Yugoslavia, which was the original signatory.)

THE HIGH REPRESENTATIVE'S UNIQUE, EXECUTIVE POWERS: Annex 10
also grants extraordinary executive powers (commonly referred
to as the Bonn Powers) to the High Representative. Over the
past 13 years, the six High Representatives from six
different European countries have used those powers to
sanction individuals and businesses that have threatened to
obstruct the peace implementations process. Bank accounts
have been frozen, the ability to travel has been restricted,
business assets have been seized, individuals have been
denied the right to run for political office, other
individuals have been removed from elected and appointed
political offices, and still others have been removed from
positions within state-owned companies, police forces, and
other public institutions.

All actions of the High Representative have been taken under
the authority of Annex 10 of the GFAP with the approval of
the Peace Implementation Council. The UNSC regularly
endorses, under Chapter VII of the UN Charter, the reports of
the High Representative and reaffirms that the High
Representative can make binding decisions on issues as
elaborated by the PIC.

THE THREAT TO THIRTEEN YEARS OF PEACE IMPLEMENTATION:

-- A. Recent legal challenges to OHR's authority: Dodik's
recent threats to initiate legal proceedings against the
Principal Deputy High Representative and the RS government's
hiring of a U.S. based law firm to "advise and represent (the
RS) with respect to (...) implementation of the Dayton Peace
Accords and activities of the High Representatives" are only
the most recent manifestations of the potential threat to 13
years of peace implementation.

-- B. Current litigation involving OHR: There is an active
case in the U.S., which also illustrates the threat. In that
case, a Serbian businessman has sued an NGO for defamation
and he is pursuing a court order that would force former OHR
staff to give testimony concerning work performed while they
were employed in the Anti-Fraud Department of OHR. These
former staff members had access to highly confidential
information, some of which was provided by government
security services, anonymous sources, and military
intelligence. The businessman is allegedly linked with
Serbian organized crime and the criminal networks that
continue to support individuals under indictment for war
crimes. OHR and the boarder International Community have an
interest in protecting the confidentiality of that
information. These specific, former OHR staff, and others
similarly situated, will be left unprotected once OHR closes.


-- C. Past Threats: There have been other explicit threats
of litigation outside of the GFAP countries. A business
based in London threatened suit against HR Ashdown over
audits that he commissioned and allegations of fraud and
corruption against the company that resulted from those
audits. There is an ongoing fraud investigation in the U.K.,
which is looking into that company's business transactions in
BiH, Serbia and Montenegro.

HR Petritsch was threatened with legal action by account
holders after he ordered the seizure of the Hercegovacka Bank
and the Appointment of an international administrator. The
bank was seized because it was involved in money laundering
and other activities that threatened to undermine the GFAP.
The seizure and liquidations of the banks' assets affected
account-holders in the U.S. and Europe.

-- D. Ongoing OHR Activities That Create Legal Risks: Legal
threats may also arise from current or ongoing activities.
An hew analysis cell has recently been created within OHR for
the purpose of tracking and preventing the funding of
organized crime, particularly crime that financially supports
persons indicated for war crimes and terrorist networks. In
addition, many of the orders that froze bank accounts,
restricted travel, or prohibited individuals from holding
certain positions in government institutions remain in force
and will continue to remain in force at least until OHR
closure. Some of these ongoing efforts, and the continuing
sanctions, could give rise to legal claims outside of the
GFAP countries.

In addition to the legal threats that might arise from the
High Representative's use of his Bonn Powers, there are more
mundane legal issues that may arise after closure of OHR. In
the past, two international employees have had their
contracts terminated and both have threatened suit against
the individuals involved in their termination. One of those
employees has recently carried through on his threat by
filing a wrongful termination lawsuit in the United States.
OHR has retained U.S. counsel and has been forced to spend
significant resources defending that claim.

Once OHR closes, most members of the OHR's staff who have
worked on issues that resulted in sanctions against
individuals or business or that adversely affected someone
financially will leave the territorial protections of the
GFAP immunity. They will be legally vulnerable and without
the political and financial protections of the PIC.

CURRENT PLANNING TO APPOINT AN INTEREST REPRESENTATIVE AND
ITS LIMITATIONS: As part of its planning for closure, OHR has
been developing a plan to appoint an Interest Representative
for purposes of maintaining and protecting OHR's confidential
archive and asserting immunity within the territory of the
GFAP signatories on behalf of former OHR staff. That
planning has progressed to the point where it could be
finalized in a relatively short period of time, assuming the
cooperation of the GFAP signatories. However, the interest
representative scheme would leave OHR staff exposed to legal
actions brought outside of the GFAP territories.

SEEKING A BROADER GRANT OF IMMUNITY: There is no clear, easy
solution to this problem. But three possible options have
emerged. All will require further discussions among PIC
Steering Board members, the U.N. Secretariat, and UNSC
members.

-- 1. A direct Grant of Immunity from the UNSC: The OHR
Legal Department has begun consultations with some members of
the UNSC, at a working level, to discuss the possibility of a
grant of immunity for OHR in a UNSC resolution. UNSC
Resolution 1483 provides a precedent. Although UNSCR 1483
grants immunity to property interest, the concept is the
same- a directive to all member States to "take any steps
that may be necessary under their respective domestic legal
system to assure" the immunities deemed necessary to protect
international peace and security. In the case of OHR, it
would be a grant of immunity from legal process for the
purpose of protecting the accomplishments of the High
Representative and his staff in implementing the civilian
aspects of the GFAP, as endorsed by the UNSC under Chapter
VII of the UN Chapter.

-- 2. A grant of Immunity through Application of the
Convention on Privileges and Immunities of the United
Nations: It should be possible for the UNSC to bring OHR
staff within the terms of the Convention of Privileges and
Immunities of the Untied Nations. For Instance, OHRprofessional staff might explicitly be designated s "Experts
on Mission" within the meaning of Article VI of the
Convention thereby granting those employees functional
immunity for work performed on behalf of OHR.

-- 3. PIC Commitment to Immunity for OHR: Another
possibility is to ask all PIC, or PIC Steering Board, members
to grant OHR immunity through domestic legislation.
Obviously, that option would not have the legal force of a
UNSC resolution issued under Chapter VII. It would be purely
voluntary and it would be extremely difficult to know which
members actually followed through on their commitment. OHR
would close with a great deal of uncertainty about how and
where immunities might apply throughout the world.

CONCLUSION: During initial conversations with embassies and
foreign offices, several questions and concerns have been
raised about the options outlined above. No doubt, there are
novel and complex legal issues involved. However, no
insurmountable obstacle has been identified that would
prevent a resolution of this problem. If there is
recognition of the threat and the political will to confront
it, then an appropriate legal framework can be found.

Notes:

-- The Interest Representative would be appointed pursuant to
the provisions of article 45 of the Vienna Convention on
Diplomatic Relations.
-- UNSC 1483 granted immunity to "petroleum, petroleum
products, and natural gas originating in Iraq (...) as well
as the Development Fund for Iraq."
-- Specifically, immunity for OHR staff "from legal process
in respect of words spoken or written and all acts performed
by them in their official capacity." See, Convention on
Privileges and immunities of the Untied Nations, Article V,
Section 18 (a).

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