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The recent arrest of Miroslav Miskovic in Serbia is an example of how a politically popular war on corruption is waged at the cost of ignoring the rule of law. On December 12, Miskovic, the President of Delta Holding, Serbia’s largest privately-owned company, and his son Marko, were arrested for allegedly engaging in improper financial transactions. The case, if it can be called that, is based on a loan made by a company Miskovic owned, Hemslade Trading Ltd. Consistent with Serbian law, the loan agreement was approved by the National Bank of Serbia before the funds were disbursed. Yet after the loan was repaid, Serbian law enforcement authorities claimed it resulted in an unlawful gain to Miskovic. As a result, he has been accused of violating Serbia’s law prohibiting “abuse of office.” For decades, this law, a relic of communist Yugoslavia, was applied to “accountable persons,” meaning owners and manager of state-owned companies. In fact, the Group of States against Corruption, known as GRECO, recommended that this law be changed to limit its application to government officials only, in order to conform Serbian law to EU standards.
Miskovic has been accused under an archaic law that makes no sense in a market economy, a law that is so vaguely worded as to give prosecutors enough discretion to charge anyone they want. Perhaps most chilling is the presumption of guilt in this case — Miskovic was arrested and put in jail before the investigators had any evidence of a crime.
Why should Congress and the EU care about the arrest of a wealthy businessman and his son in Serbia? After all, as Rick said in Casablanca, the problems of two people don’t amount to a “hill of beans in this crazy, mixed up world.” But they do. If the rule of law can be ignored by a government at its whim, we all suffer. Today the victim might be a wealthy man, but the next it could be a political protestor, or a member of an opposition party. One only has to look at Putin’s Russia to see where this may be headed. If members of Congress show interest in the direction of Serbian legal reforms now, they can help ensure a different result.
The EU/OECD Report stated that the business community and civil society organizations may be reform drivers in Serbia. The EU should lead that reform effort, rather than ignore the warning signals.
Daniel Schneider is an assistant professor at American University’s School of International Service. Previously he served as a trial attorney in the Criminal Division of the U.S. Department of Justice.